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Chapter 13

Chapter 13 of the United States Bankruptcy Code may be a viable option for debtors with high or steady incomes, who are facing foreclosure, or have assets and property that need protection through the bankruptcy process.  Chapter 13 bankruptcy may be referred to as reorganization or wage earner’s plan.  This type of bankruptcy involves restructuring and Chapter 13 Bankruptcyrepaying A PORTION of all of your debt over a payment plan that will last 3 to 5 years.  The Chapter 13 allows a debtor to pay a percentage of their unsecured debt back based on the debtor’s ability.

Once you file your chapter 13 bankruptcy petition, all debt collection activity and lawsuits against you must cease.  Upon the successful completion of your repayment plan, all remaining eligible debt will be discharged and you will be released from any further obligation to this debt.  Some debtors prefer to utilize a Chapter 13 reorganization for moral or personal reasons, as they wish to pay a portion of the debt they owe.

 

Benefits of a Chapter 13 vs. Chapter 7

 

  • Stops foreclosure and provides a plan to remedy past-due mortgage payments
  • Stops vehicle repossession and provides a plan to remedy past-due mortgage payments
  • Eliminate second and third mortgages under certain circumstances
  • Cram-down multifamily home loans to current value of the home as opposed to the amount owed (must be paid within 5 years)
  • Cram-down auto loans to the current value of the vehicle as opposed to the amount owed
  • Individuals have no direct contact with creditors while under chapter 13 protection

 

Chapter 13 Plan

Shortly after filing the Chapter 13 bankruptcy petition, a chapter 13 plan must be submitted for court approval.  The plan must provide for fixed monthly payments, no less than $50/month, for a period of 3 to 5 years.  The monthly payment will be distributed by the Trustee to the creditors based on the type of debt.  The plan does not need to pay unsecured debts in full as long as it provides that the debtor will pay all projected disposable income over the plan’s duration.  Unsecured creditors will receive a dividend between 1% and 100% of the debt that is owed or at least as much under the plan as they would receive if the debtor filed a chapter 7 bankruptcy.

 

The Chapter 13 Discharge

A discharge releases individual debtors from personal liability for most debts and prevents the creditors from taking any collection action against the debtor. A chapter 13 discharge is subject to many exceptions and it is imperative for debtors to seek competent legal counsel before filing to discuss the scope of the discharge.

 

Let the Law Office of Matthew C. Swanson Help You Today

If you are contemplating a chapter 13 bankruptcy, you can’t afford to pass up a free consultation about filing a chapter 13 bankruptcy with an experienced attorney.  Contact Attorney Swanson today.

The Law Office of Matthew C. Swanson services all of Plymouth County, Bristol County, Norfolk County, and Barnstable County.

 

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After recently filing and going through the whole bankruptcy process, I now feel like I can breathe easier and have a fresh start ahead of me. After losing my job and having no streams of income coming in, I was swimming in debt; it was the first time in my life I felt as if I was at the end of my rope.  I was getting inundated with daily calls, from bill collectors multiple times a day, along with letters in the mail, I didn’t know what to do or where to turn, until a friend referred me to Attorney Matthew Swanson. From the moment I sat in his office, Matt put me at ease about my financial situation; it was apparent and comforting to know how knowledgeable and experienced he was, anything I thought I knew and believed to be true about bankruptcy wasn’t the case at all.  Attorney Swanson educated me about the whole process, and I now realize I made the best decision that gave me immediate relief and allowed me to be able to breathe easier by creating a new beginning for myself and a fresh financial start. Attorney Swanson maintained a close relationship with me through the whole process and kept me posted and up to date every step of the way.  The process was so easy and effortless; I couldn’t have done it without Matt.  Having Matt as my attorney made all the difference in the world, I just wish he were referred to me sooner.  Without hesitation I would refer Attorney Swanson to anyone I know considering Bankruptcy!  Thank you for giving me hope and a new beginning in my life!   Emily, Framingham

Emily

Framingham

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