Chapter 13 Bankruptcy
Washington State Chapter 13 Bankruptcy lawyers fighting to protect you and help you save your house for being sold at a foreclosure auction.
There are many advantages to filing a Chapter 13 bankruptcy. One of the most important is the ability to save your home for being sold at a foreclosure auction. Unfortunately, home foreclosure clients often call us at the last minute when their home is literally about to be auctioned. If you are behind in your mortgage payments and have received a notice of foreclosure, it's important to speak with a bankruptcy attorneys right away.
Chapter 13 provides a way for homeowners to get caught up on their mortgage arrearages through a their payment plan. Clients also often file a Chapter 13 out of necessity. A significant percentage of the firm's Chapter 13 bankruptcy clients are are simply unable to qualify for Chapter 7 bankruptcy. This happens for a number of reasons, which are discussed in more detail below.
Chapter 13 bankruptcy cases can be complicated for a number of reasons. The United State Bankruptcy Court has put together an informational page about Chapter 13 Bankruptcy, and it contains a lot of useful and helpful information. The Wikipedia page on Filing for Chapter 13 Bankruptcy protection is also instructive and contains a lot of other links to useful information.
Over the years our lawyers have learned that every Chapter 13 is unique. Although many cases share a lot of similarities, they are always financial differences. It is important that your bankruptcy payment plan be properly crafted and one that you can truly afford.Our Chapter 13 bankruptcy lawyers serve clients throughout Western Washington.
Whether you need to stop a home foreclosure or are simply struggling every month to simply keep your head above water, we can help determine whether or not you are able to qualify for protection and relief under the Bankruptcy Code.
If you qualify, our Washington Chapter 13 bankruptcy attorneys can help. Call now to see if you can qualify for Chapter 13 bankruptcy protection in Washington State.
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Chapter 13 Bankruptcy is commonly known as a “wage earner plan” in which regular income is used to repay part, most, and sometimes all your debts (though usually with reduced or zero interest).
There are many reasons why people file Chapter 13 Bankruptcy. The following are several common reasons.
1. You Have Filed for Chapter 7 Bankruptcy in the past 8 Years. If you filed for Chapter 7 Bankruptcy within the past 8 years where you received a discharge, you are ineligible from filing another Chapter 7 Bankruptcy, However, if it has been at least 4 years since your Chapter 7 Bankruptcy, you can file a Chapter 13 Bankruptcy Petition and Plan and in many cases discharge most of your unsecured debts.
If you are a debtor below the median income for your household size, your plan terms will be for 36 months and the payment can be as low as $100/month. At the end of your 36 plan terms, your remaining unpaid qualifying unsecured debts will be discharged.
2. You are above the median income for your household size and do not pass the Means Test for Chapter 7 Bankruptcy, and cannot rebut the presumption of abuse. In those situations, you are required to repay all or a portion of your unsecured debt in a 60 month plan. At the end of the 60 month plan term, your remaining (if any) unsecured debts will be discharged and your case will be closed.
3. You are behind on your mortgage and wish to catch up. Chapter 13 Bankruptcy allows you to propose a Chapter 13 Plan to repay your mortgage arrears over a period of up to 60 months to avoid you losing your house. You must also resume and pay your regular mortgage payment into the Chapter 13 Plan.
4. You Wish to Strip and Discharge Your Second Mortgage. If your home is valued at less than the balance of your first mortgage, you can file an adversary proceeding against your second mortgage company and strip the mortgage lien from your property after the successful completion of your Chapter 13 Plan.
Your second mortgage will then be discharged and you will be able to keep your home by only paying your first mortgage. Under the U.S. Bankruptcy Code, this process can only be obtained through Chapter 13 Bankruptcy and not Chapter 7 bankruptcy.
5. You wish to lower your car payment, loan interest rate and/or car loan balance. In many cases, you are lower your payment by restructuring your car loan over a 60 month period and lower the interest rate. Also, if your car loan was taken out over 910 days, you can “cramdown” the car loan by reducing the balance to the car’s fair market value. This value is typically the retain value on Kelly Blue Book.
Our experienced Washington State Bankruptcy Lawyers will review your entire financial situation and help determine if filing for Chapter 13 Bankruptcy is your best financial option.
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If you have a higher than average income, need to catch up on a mortgage, need to restructure a car loan or other secured debt or have back taxes, tickets or domestic support obligations such a child support, a Chapter 13 may be right for you. A Chapter 13 allows you to stop creditors immediately and pay what you can afford over three to five years.
A Chapter 13 is like a Chapter 7 in that you file a list of your property, your debt, your income and your expenses with the bankruptcy court. With a Chapter 13 you also propose a plan to repay your creditors. The plan must be approved by a bankruptcy judge. A trustee is appointed who collects monthly payments from you and distributes the money according to your plan. Creditors and the trustee can object to your plan. Your attorney helps you with these objections and, if necessary, argues why your plan should be approved over the objections in bankruptcy court.
While you are paying into your plan, creditors can not try to collect from you directly. As long as you are making payments into a feasible plan and keeping property fully insured, car companies and mortgage companies can not repossess or foreclose. You have to be able to afford the plan for it to be feasible. The law requires that you be able to catch up on a mortgage in five years to protect your home in Chapter 13. You also have to propose to pay what’s required to a car company to protect your car. Chapter 13 allows you to restructure and drastically lower car payments in many cases. You also have to be able to catch up on newer taxes (usually taxes less than 3 years old) and back domestic support obligations within five years. You have some time to change your plan if it is not feasible. Unless a creditor is able to block approval of your plan or show that you are behind on payments, they can not act against you.
About a month after you file your case, you have to meet with the trustee to go over your bankruptcy papers and plan. The trustee may bring up some objections at that point. Your attorney will usually work out any issues with creditors and the trustee out of court. It is very hard for non-bankruptcy attorneys to approve a bankruptcy plan. In the vast majority of cases you will not have to attend any other hearings other than this first one with the trustee. If your attorney has to argue your case before a bankruptcy judge, your presence is usually not required.
When you finish your plan, you get a discharge which wipes out the dischargeable debt you did not pay. You can pay anywhere from 0% to 100% on unsecured debt like credit cards or medical bills, depending on your income. Some debt is non-dischargeable, such as student loans and fines. A Chapter 13 allows you to discharge more kinds of debt than a Chapter 7, such as debt you owe to an ex-spouse because you did not pay marital debt you both owed while married.
Contact one of our Chapter 13 bankruptcy legal services offices today for a free initial consultation.