Chapter 13 Bankruptcy Relief
Chapter 13 bankruptcy is also commonly referred to as debtors court, debt consolidation or debt reorganization. An individual or married couple can file a Chapter 13 bankruptcy case. The primary goal of a Chapter 13 bankruptcy case is to allow an individual or family to reorganize their debts. A typical Chapter 13 bankruptcy lowers your monthly payments to your creditors and provides substantial savings on interest rates and service charge fees. Almost any type of debt or creditor can be paid through in a Chapter 13 bankruptcy case. This includes cars, mortgages, taxes, student loans, credit cards, payday loans, personal loans, medical bills, and child support arrearages.
An individual or family who is behind on payments on their secured debts, such as a car or mortgage that is in danger of being repossessed or foreclosed, can file a Chapter 13 bankruptcy and stop the repossession or foreclosure. This holds true for garnishments, repossessions, foreclosures, and harassing phone calls. Immediately upon the filing of your Chapter 13 bankruptcy case, you are protected from all of these collections.
When you consolidate your unsecured creditors in a Chapter 13 bankruptcy case, you typically no longer pay interest, penalties or late fees during the life of your Chapter 13 case. For example, if you have high-interest credit card debt, high-interest loans or high-interest payday loans, these creditors can be paid through Chapter 13 at a zero percent interest rate. Furthermore, if you have a car, truck, or motorcycle with a high interest rate, it is possible to substantially lower the interest rate, often as low as 5 percent. Some of the most frequent reasons individuals or families file a Chapter 13 bankruptcy case is because they have defaulted on their mortgage payments, a loan modification has been denied, or unforeseen circumstances have caused your house to go into foreclosure. It is possible to file a Chapter 13 bankruptcy case, stop the foreclosure, and cure the default over an extended period of time, which allows you to have a manageable payment.
If your paycheck is currently being garnished by a creditor, the filing of the Chapter 13 bankruptcy case will immediately stop the garnishment from your wages. Additionally, if you are subject to an IRS or state tax levy on your wages or bank accounts, the levy is immediately halted. When the IRS or state is paid through the Chapter 13 bankruptcy, the debt typically no longer incurs interest or penalties during the life of the case. If you successfully complete your Chapter 13 case, you will not have to pay this interest or penalties.
A Chapter 13 bankruptcy case is a powerful tool to help an individual or family reorganize household bills to a manageable level. Our office has helped thousands of individuals save cars and homes and successfully reorganize these debts to reestablish good credit standing. In a Chapter 13 bankruptcy, the majority of the attorney fees are consolidated with your other bills.
Under Chapter 13 bankruptcy rules, you are required to obtain your credit counseling certificate and pay the filing fees prior to the filing of the bankruptcy case. Once you call our office and discuss your situation during your free initial consultation, we will be able to tell you what your initial filing fee will be.
C. Taylor Crockett is a bankruptcy attorney who can help you get a fresh start. If you would like more information regarding Chapter 13 bankruptcy, please call our office at 205-978-3550.