Tacoma Bankruptcy Help
Chapter 13 Bankruptcy Lawyer
Attorney David M. Lux
Questions About Bankruptcy?
- Lower your monthly payments
- Discharge your qualifying debts
- Stop all lawsuits and garnisments
- Keep your house
CHAPTER 13 BANKRUPTCY IN TACOMA, WA
What is Chapter 13 bankruptcy?
Chapter 13 Bankruptcy is often referred to as a “Wage Earner” Bankruptcy. Individuals often file for Chapter 13 Bankruptcy protection when they are employed and their income is too high to qualify for Chapter 7 and they have some disposable income to repay at least part of their debts.
Chapter 13 bankruptcy is also fuiled a vehicle to catch up on their mortgages or car loans. It is also filed to making smaller payments and lower interest on student loans or income taxes owed.
Why File for Chapter 13 Bankruptcy?
The following is a summary of the sum of the reasons Chapter 13 bankruptcy is filed:
1. Repayment.
When an individual is employed and does not qualify for Chapter 7 Bankruptcy. A repayment plan usually either for 36 or 60 months is required to repay at least part fo your unsecured debts.
2. Stops Home Foreclosure and Car Respossessions.
Allows you to Catch Up on Mortgages or Car Payments: So long as you can make your regular mortgage payment or car payment, Chapter 13 allows you to repay your arreage—the amount you are behind—on those loans, allowing you up to 5 years to catch up on your loans. This is power vehicle to avoid foreclosure or repossession of your vehicle.
3. Cramdown a Car Loan.
If your car loan was taken out over 910 days ago, filing for Chapter 13 bankruptcy allows you to petition the bankruptcy court to lower your balance on the loan to its current fair market value to repay the new loan balance for up to 5 years.
4. Lowers Interest on IRS Repayments.
A Chapter 13 bankruptcy lowers the interest and, in many cases your payments on IRS debt. Through a Chapter 13 Plan, you can repay your IRS debt at a lower interest rate for up to 5 years. Your IRS debt must be repaid 100% within this 5 year period.
5. Lowers Student Loan Payments.
A Capter 13 Bankruptcy will lower your student loan payments to an amount you can afford to pay for up to 5 years. At the end of this 5 year period, you will again by one your own to repay the remaining balances of your student loans, but hopefully you will be in a better financial position by this time to make larger monthly payments.
6. Discharging A Second Mortgage.
In this declining real. estate market, if your home has lost value to the extent that the balance of your first mortgage would not be 100% paid off by the sale of your home based upon the current fair market value, your second (and also any successive mortgages) can be discharged by filing a Chapter 13 bankruptcy petition. This is a complex procedure that our experienced Tacoma Bankruptcy lawyers can administer for you by filing a motion before a bankruptcy judge to discharge your second mortgage. After discharging your second mortgage under this scenario, the homeowner is able to keep his or her home so long as he or her remains current on his or her first mortgage.
The Automatic Stay
When you file a Chapter 13 bankruptcy petition, the Bankruptcy Court issues notice of your bankruptcy filing to all of your creditors and orders them to stop all collections activity. All harassing phone calls, lawsuits, threats, judgments, repossessions, and garnishments stop with the filing of your bankruptcy petition. This court order is known as the "Automatic Stay".
Chapter 13 Debt Limits
Unsecured debts must be less than $336,900, and secured debts must be less than $1,010,650 to file Chapter 13 Bankruptcy.
In a Chapter 13 bankruptcy, you are required to make monthly payments to a trustee for a period of 36 to 60 months. The first payment is due 30 days from the date your case is filed. In general, the the Chapter 13 filer often has at least some assets of significant value and a relatively high monthly income.
The primary goal of a Chapter 13 bankruptcy is to consolidate your debts and set up a manageable monthly payment. Chapter 13 bankruptcies are often referred to as a "Debt Consolidation", or the "Wage Earners Plan".
Chapter 13 is primarily designed to allow you to stop foreclosures and repossessions, and allows you to make up the back payments in a 36 to 60 month plan. In a Chapter 13, we can also consolidate other bills, such as your car payment, whereby you only pay the value of the car, and not the loan balance. Other debt that can be consolidated includes tax debts, student loans, and child support or alimony arrears.
The process of filing a Chapter 13 bankruptcy is considerable more complex than a Chapter 7. In addition to the voluntary petition and related documents, filing a Chapter 13 also requires submission of a repayment plan.
This repayment plan details how you propose to make your monthly payments to the Trustee. In addition to the 341 meeting of creditors, there is also another mandatory hearing, which is called a "confirmation hearing".
In a confirmation hearing, your case goes before a bankruptcy Judge for final review and approval. Typically, it is not necessary for you to attend the confirmation hearing. We appear on your behalf.
Prior to the confirmation hearing, creditors often file objections to your plan's confirmation or approval if they have issues with your proposed repayment plan. This frequently requires that we respond to their objections on your behalf.
In the majority of cases, however, your case will be confirmed by the Judge at the confirmation hearing if you are current with your Chapter 13 payments to the Trustee, any amendments requested by the Trustee have been filed, and any objections filed by your creditors have been addressed and resolved.
Once your plan has been confirmed, all you have to do is make all your monthly payments under the proposed Chapter 13 repayment plan, and you will receive your discharge. There are frequently a number of motions filed by creditors, the Trustee, and by us as attorney, during a Chapter 13 case. Chapter 13 bankruptcies are quite complex and it is highly recommended that you not attempt to proceed without an experienced attorney.
When you file a Chapter 13 bankruptcy petition, the Bankruptcy Court issues notice of your bankruptcy filing to all of your creditors and orders them to stop all collections activity. All harassing phone calls, lawsuits, threats, judgments, repossessions, and garnishments stop with the filing of your bankruptcy petition. This court order is known as the "Automatic Stay".