What is Chapter 13 bankruptcy?
When you have fallen behind on payments on your home or car and your goal is to see if you can keep those assets, when you can pay something to your creditors on a monthly basis but your creditors want more, when you have assets, such as heirlooms or land, that you want to keep, if you qualify, a Chapter 13 Bankruptcy can help you achieve your goals. Chapter 13 Bankruptcy Plan will help you find relief by paying a certain amount on a monthly basis. This amount is determined by looking at your income and expenses and will help you reorganize your debts.
Regain Control of Your Budget
I have developed the necessary skills to help my clients create and maintain a financial plan after filing Chapter 13. My ability to help people was recognized when I became a recipient of the Phoenix Chapter 13 Trustee “Recognition of Excellence Award.” Through my experience, I can help you gain back the control that you have lost over your debt and your budget.
Bankruptcy for Individuals and Small Businesses
A Chapter 13 Bankruptcy is available to both individuals and small non-corporate nonpartnership businesses. As a part of the bankruptcy process, you will work with your existing creditors to create a payment plan tailored to your budget. Once your plan is completed, any remaining debts are subject to discharge and will be eliminated.
Prevent Foreclosure on Your Home
When you have fallen behind on your mortgage payments (mortgage arrears) and want to keep your home from being foreclosed, a Chapter 13 Bankruptcy can help you by curing your mortgage arrears and allow you to keep your home. Once your plan is completed, and you have made all required post-petition mortgage payments in a timely manner, any pre-petition mortgage arrears will be cured and any foreclosure will be stopped.
In certain circumstances, a Chapter 13 Bankruptcy can also help you completely eliminate a second mortgage or home improvement loan. Once you successfully complete the bankruptcy plan the second lien on your home will be removed. I have helped many of my clients obtain court orders that will allow them to eliminate their mortgage liens, allowing them to be even closer to establishing or increasing equity in their home.
Stop the Repossession of Your Car
A Chapter 13 Bankruptcy Plan can help you, in certain circumstances, pay the lesser of the fair market value or the total debt owed on a car loan, usually with a low rate of interest based on the current prime rate. At the very least, Chapter 13 can help you reduce your interest rate on your car loan, cure any defaults on your loan and stop a repossession. If a repossession has already taken place, if filed in time, you can stop any pending sale and help you retrieve your vehicle before it is sold.
When your plan comes to a successful conclusion, your car loan will be satisfied and the lien on the vehicle must be released. The car will be yours free and clear from any pre-filing lien.
Eliminate Tax Debt
Taxes, under certain circumstances, can be completely discharged in a Chapter 13 bankruptcy. Other times, when no tax lien has been filed, certain taxes can be paid over time with no interest or penalties which, on completion of the plan, will be subject to discharge. Chapter 13 can help a debtor deal with taxes and eliminate many years of tax debt, including penalties and interest. In situations where a taxing authority has filed a tax lien, it will be entitled to be paid the value of the property to which the lien extends, with interest, but even in those situations paying taxes through a bankruptcy plan can be advantageous.
Protect Your Assets
In many cases, a bankruptcy plan can help you keep your valuable possessions by allowing you to pay a percentage of their value over time, on a pro rata basis. Sometimes when you owe tax debt that must be paid (i.e. is a priority claim) or a domestic support obligation (child support, spousal maintenance – both are also a priority debt) you can retain up to all of the value of the unprotected asset without paying any additional money through the plan.
There are many ways that I can assist you with your debt relief. I can help you with my years of experience to develop a bankruptcy plan that best protects you and at the same time complies with the myriad of requirements related to the filing of a Chapter 13 Bankruptcy, with professionalism, and caring advice tailored to your particular needs.
Let me help you realize a fresh start by finding out if filing bankruptcy is a good option for you. Contact me for a free telephone consultation. Speak with a lawyer, not a paralegal or salesperson.
If a bankruptcy will not help or is just not your style, you still have an option, debt negotiation. Debt negotiation best works when you have a small number of creditors and you can pay a lump sum of cash on settlement of their claims. Settlement amounts can be as little as 10-20% of the amount owed to over 50%.
Debt negotiation does have its downside. Generally, creditors want to be paid in a lump sum, not monthly payments. If you are unable to make a lump-sum payment, debt negotiations in such cases will simply not work. In addition, debt negotiation can lead to a taxable event. When a debt is discharged in a bankruptcy, generally, it does not give rise to a taxable event. When a debt is negotiated with a creditor, and the creditor forgives a portion of the debt owed, the amount forgiven is debt forgiveness income that may give rise to a tax debt. As this type of income may or may not be subject to taxation, it is critical to contact your CPA or tax attorney to determine the exact nature of any tax liability.
By engaging in an initial consultation with my office, I will be able to determine if indeed a debt negotiation will help you. Visit me at my office in Phoenix, contact me online, or call me at (623) 487-1670. There is no cost to inquire; you have nothing to lose but your debt.