Chapter 13 Bankruptcy
Chapter 13 bankruptcy is the reorganization of a portion of your debts with a comfortable payment you can afford to pay. You generally do not have to repay all your debts!
STOP HOME FORECLOSURES – SAVE YOUR HOME!
Chapter 13 bankruptcy can also be used to stop home foreclosures. You may take 3 to 5 years to catch up on your back house payments. You can also take 3 to 5 years to catch up on your back condo or mobile home payments, and, best of all, you won’t lose your home. You may even be able to eliminate your second and third mortgages with a Chapter 13 bankruptcy. You can also often lower your automobile, mobile home, and furniture payments in a Chapter 13 bankruptcy.
PAY IRS TAXES
Chapter 13 bankruptcy is often used to pay IRS taxes that would not be eliminated in a Chapter 7. Under a Chapter 13 payment plan, the interest and penalties on these taxes generally stops. You are allowed to pay the IRS with a monthly payment that you can afford to make. The IRS cannot garnish your bank account, attach your wages, call you at work, or put a lien on your property. But remember, if the taxes are more than 3 years past due, we may be able to totally eliminate the tax by filing bankruptcy.
Chapter 13 bankruptcy establishes a reasonable monthly payment for the debtor to pay to the bankruptcy trustee. The trustee then distributes this payment to the debtor’s creditors.
Chapter 13 bankruptcy generally only requires debtors to repay a small portion of their total debt. YOU GENERALLY DO NOT HAVE TO PAY ALL OF YOUR DEBT BACK WHEN YOU FILE A CHAPTER 13 BANKRUPTCY! THIS IS WHY FILING A CHAPTER 13 BANKRUPTCY IS MUCH MORE BENEFICIAL THAN SIMPLY CONSOLIDATING YOUR DEBTS THROUGH A CREDIT COUNSELING AGENCY.
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Automatic Stay - Precludes and halts all collection activities from creditors and collection agencies. You may even be able to get back a repossessed automobile by filing bankruptcy.
Assets - Assets are generally anything of value. For example: property, real estate, cash, notes, stocks, bonds, accounts receivables and securities.
Chapter 7 Bankruptcy - This is the most common form of bankruptcy filed by people in debt, in order to eliminate their debts in order to obtain a “fresh start.” Chapter 7 bankruptcy is most often used to eliminate credit card debts, pay day loans and medical bills.
Chapter 13 Bankruptcy - Simply put, is the reorganization of consumer debts with a new payment schedule. It is often filed to stop home foreclosures, stop auto repossessions and to pay IRS taxes over a 60 month period.
Creditor - A person or entity to whom money is due.
Discharge - What you wish to obtain by filing bankruptcy so your debts are eliminated.
Exemption - Assets that cannot be touched by creditors during bankruptcy proceedings.
Insolvent - Unable to pay ones debts.
Secured Debt - Debt that is backed by collateral. For example: mortgage or a car loan.
Trustee - Person appointed to oversee the completion of a bankruptcy filing.
Unsecured Debt - debt that is not backed by collateral. For example: credit card debts, pay day loans and medical bills.