Many of us will experience financial problems at some point in our lifetimes. In addition, financial difficulties can affect anyone, including gainfully-employed people who have regular incomes. Perhaps you are having trouble keeping up with your mortgage payments due to a variable interest rate, or you have overutilized your credit cards and can’t keep up with their outrageous interest rates. Whatever the case may be, if you are in debt and make a regular income, Chapter 13 bankruptcy may be able to help.
Our Bellevue Chapter 13 lawyers are available to review your financial situation and help you decide if filing for bankruptcy is right for you. Call our office today to schedule a consultation with an experienced lawyer.
Chapter 13 Basics
Chapter 13 bankruptcy is also known as a “reorganization bankruptcy” or “wage earner’s plan.” This is because it allows people who make regular income to reorganize their debts and enter into a judicially-approved payment plan that will last from three to five years. If your income is under the state median, the plan will usually last for three years unless the court approves a longer plan. If your income is over the state median, the plan will typically last for five years.
During the course of your payment plan, your debtors are prohibited from engaging in any collection efforts. This means that you are protected from collection efforts like the repossession of property, wage garnishment, and foreclosure.
The Advantages of Chapter 13 Bankruptcy
Keeping Your Assets
When most people think of consumer bankruptcy, they think of Chapter 7. In a Chapter 7 bankruptcy, a debtor’s nonexempt assets are sold off in order to pay back creditors. Chapter 13 bankruptcy provides the significant advantage of being able to keep your assets while you are paying back your debts.
Stopping Foreclosure with Chapter 13 Bankruptcy
Many consumers use Chapter 13 bankruptcy to save their homes from foreclosure. When you file for Chapter 13, it stops any foreclosure attempts by your mortgage lender. In addition, it allows you to include your past-due mortgage payments (often referred to as arrears) and wrap them up into your repayment plan. In this way, you can give yourself three to five years to catch up on your mortgage payments and stay in your home. Importantly, however, you will need to stay current on your mortgage payment after you file for bankruptcy. If you do not, your lender can seek the court’s approval to restart foreclosure proceedings.
Lower Payments through Chapter 13
Another advantage of Chapter 13 bankruptcy is that it allows you to reschedule your secured debts over the course of your repayment plan. In many cases, this allows debtors to lower their total monthly payments.
One Payment to the Bankruptcy Trustee
One of the most time-consuming and stressful parts of being in debt is dealing with your creditors and making several payments to various parties. When you file for Chapter 13, you will only make one payment to the bankruptcy trustee, who will then distribute the funds among your creditors. In addition, you will not have to deal with your creditors directly while you are in your repayment plan period.
Do You Need a Lawyer to File for Chapter 13 Bankruptcy?
If you are considering filing for Chapter 13 or any other type of bankruptcy, there is a good chance that you are experiencing financial problems. In these circumstances, it is likely that you do not want to take on any other unnecessary expenses like legal fees.
It is highly advisable to retain an attorney when filing for Chapter 13 bankruptcy. In fact, on the U.S. Courts website, they state that it is strongly recommended that you seek the advice of an attorney due to the long-term financial and legal outcomes associated with filing. Some of the ways that a Chapter 13 bankruptcy attorney can help you include:
- Determining whether you are eligible to file for Chapter 13.
- Organizing all of the documentation you need to file your bankruptcy petition. This documentation includes a list of all of your debtors and their claims, detailed information about your income, a list of your property, and a list of your monthly living expenses.
- Filing your bankruptcy petition with the appropriate court.
- Handling communications with the trustee assigned to administer your case.
- Representing you in your 341 Meeting of Creditors
- Responding to any issues that may arise with your case
Schedule a Consultation with Bellevue Chapter 13 Lawyer Today
If you are having trouble keeping up with your bills despite having a regular income, Chapter 13 bankruptcy may be right for you. In many cases, Chapter 13 bankruptcy can immediately improve your financial situation and wrap your debts into a manageable payment plan. To learn more and to discuss your situation with an experienced attorney, call our office today at 206-790-6430 or send us an email through our online contact form.