Struggling with debts and living paycheck to paycheck is a burden that no one should have to face; however, many people are suffering with overwhelming debt every day in America. The recession, lack of jobs and the high cost of medical care are just some of the reasons why people have trouble paying their debts. If they are not able to recover financially, they may need assistance from an outside source to resolve their debt problems. Many people find the help they need through a Chapter 13 bankruptcy case.
What is a Chapter 13 Bankruptcy Case?
A Chapter 13 bankruptcy case is also referred to as a reorganization. It is for individuals who have a regular income but have fallen behind on their bills and need help reorganizing their debts into a manageable plan. When a person files for Chapter 13 relief, the automatic stay provisions of the Bankruptcy Code prohibit creditors from continuing collection efforts. The Chapter 13 bankruptcy case immediately stops foreclosures, repossessions, collection lawsuits and wage garnishments. The bankruptcy case provides the debtor with a sanctuary where he or she can devise an affordable plan to deal with debts.
For example, if the debtor is behind on mortgage payments and he is facing foreclosure, he can file a Chapter 13 bankruptcy case to stop the foreclosure and repay the mortgage arrearage over a 36 to 60 month plan. Likewise, if the debtor’s vehicle is about to be repossessed for failure to make payments, he can file a bankruptcy case and include the car payments in the Chapter 13 plan to stop the repossession. In some cases, the debtor can value the car to lower the amount owed on the secured debt and may be able to lower the interest rate paid on the car loan.
When the Chapter 13 bankruptcy case is filed, the debtor must propose a bankruptcy plan outlining how the debtor proposes to pay back his creditors. Creditors are served with a copy of the plan and they are permitted to file objections to the plan if they feel the plan does not conform to bankruptcy law. Once the court approves the plan, the plan payment should remain the same for the entire term of the plan barring any significant changes in income or expenses.
When Can I File A Chapter 13 Bankruptcy Case?
If you have a reliable monthly income, you can probably file a Chapter 13 bankruptcy case. In some situations, it may be more beneficial for you to file a Chapter 7 bankruptcy case if your income is less than your monthly expenses before taking into consider any of your debts. However, a Chapter 13 bankruptcy case allows you to protect your assets while giving you relief from the overwhelming debt.
Contact my office to schedule a free bankruptcy consultation to discuss whether a Chapter 13 bankruptcy case is in your best interest. There are numerous options available to individuals, couples and businesses under the Bankruptcy Code. You do not need to continue to suffer with debts that you cannot afford to pay. There is hope and help.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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