Chapter 13 Bankruptcy
A Chapter 13 bankruptcy allows a debtor to discharge their debts after paying on a repayment plan over a 3 to 5 year period. Debtors can typically protect all of their property through state law exemptions as in a Chapter 7 bankruptcy. The payment is generally based on what the debtor can afford after considering all allowable monthly expenses and the creditors are required to accept that amount. Typically, a debtor is only required to pay back a portion of their total debt. After the repayment plan is concluded the remaining unsecured debt is discharged.
Process of Chapter 13 Bankruptcy
- Initial Comprehensive Consultation
- Retain Attorney
- Pay Attorneys Fees
- Complete Pre-Filing Credit Counseling Course, required by law (available online)
- Attorney Completes Bankruptcy Petition
- Attorney Reviews Bankruptcy Petition with Client
- Client Signs the Bankruptcy Petition and Petition is Filed with the Court
- Complete Post-Filing Credit Counseling Course, required by law (available online)
- Attend 341(a) Meeting with Attorney Present
- Confirmation Hearing For Determining Monthly Payment
Benefits of a Chapter 13
Payback Arrearages/ Save Your Home
If you are behind on your mortgage payments a Chapter 13 bankruptcy can force creditors to accept payback of your arrearages tendered in monthly payments over a maximum of 60 months. This provides you with the opportunity to get back on your feet and pay back only a small portion of your delinquent payments over an extended period of time.
Lien Strip
As part of a Chapter 13 bankruptcy a debtor may be able to strip off a second or third mortgage upon completion of the Chapter 13 plan. This means that after you receive a discharge in a Chapter 13 bankruptcy you will never have to pay on your second or third mortgage ever again. This is a powerful tool allowing possible savings of hundreds of thousands of dollars. A qualified attorney at the Leibowitz Law Group will determine if you qualify for a lien strip.