Chapter 13 Bankruptcy

The Basics

A chapter 13 bankruptcy case is sometimes referred to as a “wage earner’s case” because it is open to individuals and married couples with regular monthly income.  In a chapter 13 case, you will make monthly payments for a period of three to five years under a “chapter 13 plan.”  The amount that you pay under the plan is based mainly on your disposable income (your income minus your expenses) and the amount of debts that you decide to or are required to repay.  In most cases the payments are taken directly out of your paychecks and paid to your creditors by the “trustee” that is assigned to your case.  Once you have completed all of your payments, the bankruptcy court will grant you a “discharge” of your remaining debts, meaning those debts are wiped out!

Benefits

A chapter 13 case allows you to keep your assets (such as your residence or a car) while allowing you time to catch up on missed payments.  In a lot of cases, the remaining balance and interest rate you were paying on car loan can be significantly reduced, saving you money in the long run.  A chapter 13 case also allows for the consolidation of most of your debts so that you are only making one plan payment, and you no longer have to deal with lots of creditors and their harassing phone calls.  Plus unsecured creditors (those creditors without a mortgage on your home or a lien on your car or other property) are often paid cents on the dollar of what you owe (and sometimes nothing) without interest.  Any balance owing on those debts will be discharged (eliminated) after you make all of the payments under your plan.

Costs

Chapter 13 cases usually have lower upfront costs because in most cases the attorney’s fees can be paid over time through your chapter 13 plan payments.  In most cases, your only upfront costs are the amounts needed to take the required credit counseling classes, and to pay for credit reports and filing fees.  If you have questions about these costs, please feel free to contact us and we would be happy to discuss them with you.

Is it Right for Me?

We suggest setting up a free initial consultation to find out.  There are lots of things to consider in deciding whether to file bankruptcy, and that is where we come in.  Paul Schofield can help you decide whether a chapter 13 case is the best option for you, and he will personally take the time to go over your situation with you.  He will never pressure you into filing for bankruptcy if it is not your best option.  If you decide to file, Paul will be by your side through the entire process to ensure that you achieve the best possible outcome for you and your finances.

Call 912-275-7018 today to set up a free initial consultation!

The Schofield Law Firm is a debt relief agency that helps clients file for relief under the Bankruptcy Code.


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