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Perhaps you know people who had all their debts wiped out through Chapter 7 bankruptcy. If you earn more than the median income, you may be required to file for Chapter 13 repayment under the bankruptcy means test established by Congress in 2005. Freeing yourself from the burden of debt may seem like an impossible, unending process, but real relief is available through Chapter 13 bankruptcy ("reorganization of debts"). Individuals or small businesses get:
You make set monthly payments to a bankruptcy trustee based on the court's determination of what you can afford to pay. The law recognizes that most Chapter 13 filers cannot pay back everything they owe; after you make the scheduled payments for 36 to 60 months, the bankruptcy court typically cancels the remaining debt. Chapter 13 also allows for a "super discharge" of more debts than are allowed under Chapter 7. You will normally not lose anything. You retain all assets, unless you fail to make payments under the Chapter 13 repayment plan approved by the court.
Perhaps the most common and maybe most important use of Chapter 13 is to protect your home from foreclosure. Once foreclose proceedings are initiated, you generally have a short amount of time to come up with the cash to pay off your debt. If you cannot pay the arrears, the mortgage holder may take your home and you will lose any remaining equity in the property.
Foreclosure actions stop the minute you file for Chapter 13 protection. It also extends the period of time you have to catch up with the payments. Having an extra year, or an extra five years, may mean all the difference when you are trying to keep your house. Chapter 13 also halts repossession of your car or other secured loan assets.
If you are in debt and have been for a while, you know what it is like to be hounded by creditors. They send intimidating notices by mail, phone your home at all hours, and maybe harass your family members or employer. From the moment you declare a Chapter 13 bankruptcy, you are granted an “automatic stay,” legally protecting you from all collection efforts. Foreclosure, repossession, and litigation are halted immediately. Creditors who persist in harassing you can be referred to your lawyer.
Call Allen Law, P.A. today at 813-671-4300 for a free* initial consultation to discuss Chapter 13 bankruptcy. Our attorney's fees can be addressed as part of your repayment plan.