Lehighton & Carbon County Chapter 13 Bankruptcy Attorney
If you’re struggling with debt but don’t qualify for Chapter 7 bankruptcy, or if your debt is not the type that can be discharged in a Chapter 7 proceeding, you may want to consider whether a Chapter 13 bankruptcy is the solution to your problems. In Chapter 13, your debts are adjusted and brought together on one payment plan. You make payments to the bankruptcy trustee and don’t have to deal with creditors directly. After three or five years, your debts can be discharged by the bankruptcy court. Chapter 13 can be a promising way for you to take back control of your finances, and it can even help you save your home from foreclosure if you’re in mortgage default. Lehighton & Carbon County Chapter 13 bankruptcy attorney Adam Weaver has extensive experience in Chapter 13 bankruptcy cases. Learn more about Chapter 13 bankruptcy below, and contact the Law Office of Adam R. Weaver, Esq. to talk to a skilled and knowledgeable lawyer about your needs.
How does Chapter 13 work?
The heart of the Chapter 13 process involves developing a payment plan for your outstanding debts. This plan details how you will pay off non-dischargeable debts such as child support arrearages or back taxes, and how you’ll pay secured and unsecured creditors as well. Different creditors will have different priorities as to who gets paid what. By paying your secured creditors, you’ll get caught up on missed payments, which can help you to prevent repossessions of your personal property or avoid foreclosure on your home. Unsecured creditors, such as hospitals or credit card companies, will likely only receive a percentage of the total debt, with the rest being discharged in bankruptcy.
Your proposed plan will be reviewed by the bankruptcy trustee as well as your creditors, who may object to the plan. Once the plan is approved or confirmed, however, all of your creditors must abide by the terms of the plan. They have to accept the payments outlined in the plan. They can’t pursue debt collection efforts on their own, and they can’t charge interest on your debt while the plan is in operation.
Am I eligible for Chapter 13?
Chapter 13 does not have the low-income limits for eligibility that Chapter 7 has. You can be working and earning a steady wage and still qualify for Chapter 13. Unless your debts are very high, such as several hundred thousand dollars in unsecured debt or well over a million in secured debt, you’ll likely qualify. You have to be able to prove your ability to meet the plan based on your proven income and expenses. Analyzing the bankruptcy exemptions applicable to your case will help determine your payment amounts, and calculating the means test will help determine how long your plan will last (three or five years). An experienced Lehighton bankruptcy attorney at the Law Office of Adam R. Weaver, Esq. can walk you through all of the steps involved in determining eligibility and applying for Chapter 13 debt relief.
Is Chapter 13 debt consolidation?
You may have seen or heard ads on TV or radio where companies say they’ll consolidate all of your debt into one payment plan, and you’ll only have to make one payment each month to pay off your debt. This sounds a lot like a Chapter 13 repayment plan, but there are significant differences. For one thing, any savings you get from debt consolidation are treated as taxable income that you have to pay taxes on. In bankruptcy, savings from having debts reduced or canceled are not taxed. Also, debt consolidation companies may want you to secure your promise to pay them by securitizing your property, putting it up as collateral in case you don’t make all the payments on time. You’ve basically just added the debt consolidation company as another secured creditor. Chapter 13 bankruptcy does just the opposite by reducing your debts to your secured creditors and helping you keep your valuable property while paying down your debt. Most importantly, debt consolidation companies will string your payments out for a very long time. This is how they make their money, and in the end, you don’t really save very much. A Chapter 13 bankruptcy will be completed in either three or five years, after which you’ll be debt free or have many of your debts paid off, reduced or canceled. It’s worthwhile to talk to a Chapter 13 bankruptcy attorney before you sign on to debt consolidation to make sure you are making a wise choice.
Is Chapter 13 Bankruptcy Right for You? Call Lehighton Attorney Adam R. Weaver to Find Out
if you have a steady job and some amount of monthly disposable income that can go toward paying off your debts, Chapter 13 might be an effective solution for you to stop creditor harassment, reduce or discharge eligible debts and repay the others so you can emerge from bankruptcy free from oppressive debt. Call the Law Office of Adam R. Weaver, Esq. to discuss your options with an experienced and successful Lehighton & Carbon County Chapter 13 bankruptcy attorney.