Chapter 13 Bankruptcy Attorneys in Hartford County
Is bankruptcy only for those who are hardly making ends meet and struggling to fend off aggressive creditors? This is what many people believe. In reality, there are several different types of bankruptcy that cater to different levels and types of financial hardship. Chapter 7 is a well-known form of bankruptcy, but Chapter 13 could be a viable alternative that better suits your situation.
If you have a steady income and want to avoid losing nonexempt property, call our Chapter 13 bankruptcy attorneys at Boatman Law. We can help you propose a 3-5-year repayment plan that works for you, and we can advance your interests at every point in the case. We have decades of experience, and we look forward to using that experience to help you achieve a fresh financial start.
The Chapter 13 Process
The Chapter 13 plan takes 3-5 years to complete. The funds get distributed to unsecured creditors. However, you are not required to pay off all your debt under Chapter 13. Once you complete your plan, the court can discharge whatever unsecured debt remains.
Your monthly payments must use all your projected disposable income. Additionally, your creditors must receive as much as (or more than) they would have received through the Chapter 7 liquidation process. In other words, you will need to pay the value of all your nonexempt property (i.e. property that you cannot protect under state or federal exemptions) over the course of the plan.
Unlike Chapter 7, there is no income threshold for Chapter 13. To qualify for Chapter 13, you must owe no more than $1,257,850 in secured debt and $419,275 in unsecured debt. Only individuals (including sole proprietors) can file Chapter 13—if you are filing as a business, you may want to consider Subchapter V of Chapter 11 instead.
Chapter 13 and Your Secured Debt
Bankruptcy cannot discharge secured debt (e.g. mortgages, automobile loans, etc.). However, Chapter 13 is a great way for many people to save their homes from foreclosure or their cars from repossession.
Your lenders would need bankruptcy court permission to continue collection efforts against your home or vehicle during your case. A Chapter 13 plan could provide a 3-5 year period for you to catch up on any overdue payments, allowing you to save your home or vehicle at the conclusion of your case.
In some cases, you may even be able to modify or eliminate this debt in one of two ways:
- A cramdown. If you owe more on your car loan than your vehicle is worth, the court can cramdown (reduce) the loan to the fair market value of the vehicle. Unfortunately, this option is not available for the mortgage on your primary residence. It’s often available for vehicles and furniture.
- Lien-stripping. Do you have multiple mortgages on a single property? The court may be able to remove the lien from a second and/or third mortgage. In other words, the court can convert the debt from secured to unsecured status, and it can be discharged with other unsecured debt at the end of your plan. You can only qualify for this relief if you owe more on the first mortgage than your home is worth. Keep in mind that lien-stripping is not available for your first mortgage.
To learn what benefits Chapter 13 might provide and how it could impact your financial situation overall, don’t hesitate to bring your questions and concerns to Boatman Law.
“Pat and Jenna worked day and night on my behalf to help me through a very complicated Chapter 7 case. It is because of their expertise and dedication that I am getting the fresh start I so desperately needed in my life!”- Mike F.
“Jenna helped ease me thru the process of Chapter 7. She was there for every question and concern I had and put my mind at ease.”- Tammy C.
“Super attentive to details. Highly recommended.”- Mark B.
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