In Chapter 13 bankruptcy, a debtor is allowed a modified repayment plan and schedule to discharge his or her debts, usually spanning a period of 3-5 years. The plan may also allow for only partial repayment, instead of the total amounts owed. As with a Chapter 7 bankruptcy, debtors can usually protect all of their property through state law exemptions.
Each Chapter 13 payment plan will vary depending on the unique circumstances of the debtor. Most plans take into consideration what the debtor can afford each month after paying all their other necessary monthly expenses. With Chapter 13 bankruptcy, creditors are required to accept the amounts paid. After a debtor completes his or her repayment plan, any remaining unsecured debt will be discharged at that time.
When you file for Chapter 13 bankruptcy, you should first contact Leibowitz Law Group and speak with an attorney about your debts. Our firm will assist you in developing a personalized strategy that will benefit your situation and will work with you to schedule and complete a required pre-filing credit counseling course. Once the course has been completed, we will help you complete a bankruptcy petition, file the petition with the court, and ensure that you attend all necessary hearings and meetings regarding your debt.
The most significant benefit of filing for Chapter 13 is the ability to stop foreclosure proceedings and save your home. If you are behind on your mortgage payments, a Chapter 13 bankruptcy can force creditors to accept payback of your arrearages tendered in monthly payments over a maximum of 60 months. This arrangement provides you with the opportunity to get back on your feet and pay back your delinquent payments over an extended period of time.
In addition, filing for Chapter 13 can protect liable third parties on your debts, such as co-signers. You also do not have direct contact with creditors - instead, a bankruptcy trustee will communicate with you, your attorney and your creditors regarding your plan. Trustees assess your plan for compliance, collect your payments, and distribute these payments to the creditors involved.
Finally, filing for bankruptcy can stop contact with your creditors. If your creditors attempt to contact you to collect on debts while you are completing your Chapter 13 plan, they are committing creditor harassment under the FDCPA.
As part of a Chapter 13 bankruptcy, a debtor may be able to strip off a second or third mortgage upon completion of the Chapter 13 plan. This possibility means that, after you receive a discharge in a Chapter 13 bankruptcy, you will never have to pay on your second or third mortgage again. This powerful tool allows for possible savings of hundreds of thousands of dollars. A qualified attorney at Leibowitz Law Group will determine if you qualify for a lien strip.
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For more information about how our Long Beach Chapter 13 attorney can assist you, contact us for a free consultation as soon as possible.