Chapter 13 Bankruptcy
- Overwhelming credit card debt?
- Missed mortgage payments?
- Property repossession?
- Tax Debt?
We can help. Our Roswell Bankruptcy Attorneys have more than 30 years of experience filing for Chapter 7 and Chapter 13 Bankruptcy.
Chapter 13 Bankruptcy Attorney
We look at filing bankruptcy as a last resort, however when used correctly, Chapter 13 bankruptcy can be a great way to reset your financial situation and get out of debt.
WHAT IS CHAPTER 13 BANKRUPTCY?
A Chapter 13 Bankruptcy is basically a repayment plan, kind of like a debt consolidation, but with some big advantages over a normal consolidation loan. The idea is that you are going to pay back some portion of the debt you owe over 3-5 years. The amount you have to pay will be determined by either your assets or your income. In many cases people only have to pay a fraction of the total amount they owe. All of your debts are usually included in the Chapter 13 repayment plan and it simplifies things so you only have one monthly payment. All of your unsecured debts – like credit cards and medical bills – will be paid with zero interest, and some secured debts – like car loans – can be “crammed-down” so that you pay a much lower interest rate and you may even pay less than the outstanding balance you owe. A chapter 13 bankruptcy can also stop a repossession or foreclosure, and force the lender let you keep the car and/or house while you pay the arrears in the Chapter 13 plan.
What Qualifies You to File Chapter 13 Bankruptcy in Georgia?
You can file chapter 13 bankruptcy if you:
- Wish to keep the mortgaged property and need time to bring the debt to a manageable level by restructuring payment.
- Have not qualified for a Chapter 7 bankruptcy under the ‘means test’.
- Want to avoid foreclosure for missed house payments by making up for it.
- Want to take advantage of the flexibility of a Chapter 13 plan in obtaining a discharge of debts that are not dischargeable in a Chapter 7 plan.
- Have recently filed a Chapter 7 case, thereby becoming ineligible for another discharge.
- Want to strip a junior lien from your residence.
Is Chapter 13 Bankruptcy Right for You?
If you are behind in payments on your house or car or you’re facing a foreclosure or repossession, then a Chapter 13 Bankruptcy might be the best option for you. Also, if you want to file bankruptcy but can’t qualify for a Chapter 7, a Chapter 13 can be a great option to wipe out all that debt with a much smaller payment than you’re currently making on all the debts individually.
Pros of Chapter 13 Bankruptcy
- Stop all collections activity – no more harassing phone calls, text messages, email, and mail
- Stops foreclosure and repossession and lets you keep your house and your car and your stuff
- Wipes out all your debt with one easy monthly payment
- You may only have to pay a fraction of the total amount you actually owe
- All unsecured debts – like credit cards and medical bills – are paid off at 0% interest
- You can reduce the interest rate on your car loans
- You can potentially “cram-down” your car loan and pay only what the car is worth
- You can qualify for a home loan after 12 months of successful payments in your Chapter 13 plan
- Sets you on the road to debt freedom – all the debt is gone in 3-5 years
Cons of Chapter 13 Bankruptcy
- You have to continue to make the monthly payment for 3-5 years before you receive your discharge
- If you stop making your payments your case can get dismissed and you will not receive your discharge
- You have to obtain court approval for major transactions dealing with houses or cars during your Chapter 13 case
Chapter 13 Bankruptcy Benefits
The Chapter 13 Plan can be extremely beneficial for several reasons. First, it will eliminate the interest on all unsecured debts paid through the plan. Imagine those 15-20% credit cards going to 0% interest! For secured debts, like car loans, we can reduce the interest rate to about 5%. Second, it provides a way to pay off past due amounts (arrears) on your house or car over 5 years. This allows debtors to retain their homes and vehicles – as long as the minimum payments can be made on time during the course of bankruptcy. Chapter 13 also stops collection agencies from contacting you during your period of bankruptcy – beginning the day you file. Chapter 13 will immediately stop a foreclosure or repossession, allowing you to maintain payments once your debt repayment strategy has been worked out.
How it Works
First we will propose a Chapter 13 Plan which tells the bankruptcy court the amount of monthly payment you plan to make and how each creditor is to be treated. You will go ahead and start making these monthly payments immediately. Someone called the Chapter 13 trustee will review the plan and either object to it or recommend that it be confirmed (approved). The Chapter 13 trustee will usually object at least once, and then we negotiate to get the best terms we can. Once your Chapter 13 plan is confirmed, you simply continue to make the single monthly payment to the trustee and the trustee will relay the payments to the proper creditors each month. Once you get to the end of the plan, any debt that remains unpaid will be discharged, and you are debt FREE!
Information you have to furnish to file Chapter 13 Bankruptcy:
- List of all your creditors.
- Your income source, frequency and amount.
- List of properties you own.
- List of your monthly living expenses.
The Chapter 13 Discharge
The Chapter 13 bankruptcy discharge process is a complex process and has undergone some recent changes. You need to take the services of a competent Atlanta Chapter 13 bankruptcy attorney prior to filing for bankruptcy.
Once the bankruptcy court grants a Chapter 13 discharge, you will be released from all debts provided by the plan, with limited exceptions. This also frees you from the legal actions of your creditors. Debts not discharged in Chapter 13, include long-term obligations, such as home mortgage, alimony, child support, etc.
The whole process of filing for a Chapter 13 bankruptcy is complex and requires hiring an attorney. If you feel that a Chapter 13, rather than a Chapter 7 is the right fit for your financial needs, talk to Galler Law and let us guide you through the process. You can get a free consultation conducted either in our office or virtually without the need for an office visit.
Never use a DIY Chapter 13 bankruptcy filing kit. There are many available both as a box kit and downloadable online apps and all of them can do harm to your case. Since there are many hurdles to be crossed and one mistake can cause delays or halt the process entirely.
While a Chapter 13 bankruptcy doesn’t eliminate your debt like in a Chapter 7. However, some of the benefits include:
- You’ll avoid foreclosure on your home.
- You’ll have the opportunity to make up missed auto or home payments.
- You’ll have the opportunity to repay back taxes.
Let our Georgia chapter 13 bankruptcy lawyers streamline the bankruptcy process for you. Contact us for a free, no-obligation consultation to see if Chapter 13 bankruptcy is the right path for your needs. No office visit required, we can meet with you virtually.