Chapter 13 helps out clients in many ways.
Filing Chapter 13 stops all foreclosure actions and allows our clients to include their mortgage payments and arrears in the repayment plan. Clients get to keep their homes, save their equity and also eliminate their other outstanding debts.
Repay creditors a percentage of your total debt, at a rate that is within your budget
Chapter 13 Plans are based upon household income and reasonable budgets. Debts are prioritized according to Federal bankruptcy laws and can greatly benefit our clients who are struggling to pay their bills and manage their everyday needs. Chapter 13 works well for our clients who have income but find it difficult to meet creditor repayment demands and provide for their families.
Prevent Repossession of a Vehicle
Filing a Chapter 13 stops all repossession activity immediately! A Chapter 13 Plan allows our clients to catch up on vehicle payment and prevents aggressive creditors from embarrassing and inconvenient repossession of their vehicles. Our clients get to keep their car or truck and continue to make payments, often at a lower interest rate.
Lower Interest Rates for Vehicle Payment
One major benefit of Chapter 13 is that the debts repaid in the Chapter 13 plan are not necessarily paid back under the same term that existed prior to filing. Chapter 13 plans restructure the debt so that the debtor often repays under more favorable conditions, such as low/no interest rates.
Stripping a Second Mortgage
If your first mortgage is higher than the value of your primary home, we will be able to strip away your second mortgage as part of your Chapter 13 plan. This is extremely beneficial to homeowners who took out a second mortgage to stave off debt and are now looking at 15 more years of payments on mortgages well in excess of their property value.
Resolve tax debts and avoid IRS liens and wage garnishment resulting from unpaid taxes
Chapter 13 bankruptcy is an excellent option when you fall behind on your taxes because it allows you to discharge (wipe out) old income tax debt. If you have tax debt you can’t discharge, Chapter 13 bankruptcy might give you a more favorable repayment schedule—meaning a lower monthly payment—than you would receive from the taxing authority.
If your tax debt is a secured liability—meaning that the taxing agency took steps to gain an ownership interest in your property like a tax lien—then you’re not going to be able to discharge the obligation. However, Chapter 13 bankruptcy can provide you with the ability to pay back the taxes at a rate that is easier than coming up with a lump sum.
Tax debt issues are complex and require the expertise of an experienced bankruptcy attorney. During your free consultation, Atty Wendi Henderhan will illustrate the options available so you can make the right decisions concerning your financial future.
Credit Building Opportunities
Unlike a Chapter 7, a Chapter 13 bankruptcy filing allows our clients to rebuild credit during their payment of their plan. Timely payment on their Chapter 13 plan and any loans taken after filing, can favorably boost the debtor’s credit score with the credit bureaus. Your fresh start under Chapter 13 bankruptcy can begin the day that you enter into the Chapter 13 repayment plan.
It’s important to discuss with Attorney Wendi how to go about gaining new credit while you’re in a Chapter 13. There are restrictions put into place by the Trustee/Court. Her experience will help guide you through the process.