Chapter 13 Bankruptcy
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by: Jim.Olivero
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A Washington State Chapter 13 bankruptcy is type of "payment plan" bankruptcy. If you qualify for and file a Chapter 13 bankruptcy, you are required to make monthly payments to a trustee for a period of 36 to 60 months. The length of your plan depends on several variables. If utilized and crafted properly, a Chapter 13 should enable you to catch up on your unsecured debt through a no-interest consumer debt repayment plan.
A Formalized Chapter 13 Repayment Plan May be the Best Route Forward
Many of our clients first attempt to negotiate an informal payment plan with credit card companies and their other creditors. They work hard to try and pay their bills. When creditors, however, fail to meet them on any middle ground, it is extremely frustrating. These companies only care about one thing: squeezing as much blood as possible out of you and your family. If you have hit this wall, a formalized payment plan established through a Washington Chapter 13 bankruptcy may be your best solution.
The first payment is due 30 days from the date your initial petition is presented to the bankruptcy court. In general, a person filing for a Chapter 13 frequently has at least some assets of significant value and a relatively high monthly income. In order to find out if you qualify for a Chapter 13, it is important to talk with an experienced Washington bankruptcy lawyer.
A Washington Chapter 13 bankruptcy is often referred to as a "debt restructuring" bankruptcy, and is often the best option for rebuilding credit and discharging debt for individuals who have an income that is too high to enable them to qualify for a Washington Chapter 7 bankruptcy.
The 2005 changes to the U.S. Bankruptcy Code now require that a means test be utilized in order to determine if a person is eligible to eliminate their debts under Chapter 7, or whether they will be required to restructure and pay back some their debts by filing for a Chapter 13 bankruptcy. In certain instances, a Chapter 13 bankruptcy may also be an appropriate option for people who have previously filed a Chapter 7 bankruptcy within the last 8 years and who, therefore, cannot qualify for another Chapter 7 right now.
The Primary Goal of Washington State Chapter 13 Bankruptcy
The primary goal of a Chapter 13 bankruptcy is to consolidate your debts and set up a manageable monthly payment. The plan is developed by undertaking an in-depth analysis of your current income, your current monthly expenditures, and your current debts. Chapter 13 bankruptcies are also often referred to as a "debt consolidation", or the "wage earners plan".
A Washington Chapter 13 bankruptcy plan is specifically designed to allow you to stop foreclosures and repossessions while allowing you to make up the back payments in a 36 to 60 month plan. In a Chapter 13, we can also consolidate other bills, such as your car payment, whereby you only pay the value of the car, and not the loan balance. Other debt that can be consolidated includes tax debts, student loans, and child support or alimony arrears.
A Plan for People Who Earn A Good Income but Simply Cannot Keep up with their Mortgage Payments?
In today's economy, many people find themselves in an extremely precarious financial state. Many people earn a good living. But they are barely living month to month while falling increasingly behind on their monthly bills. If, despite your good job or higher than average income, you are still drowning in debt and see no way out, then a Washington Chapter 13 may be your best option to make a financial recovery. A Washington State Chapter 13 bankruptcy may also allow you to keep your house and car in spite of being unable to meet your current monthly mortgage or car loan payments.
The process of filing a Chapter 13 bankruptcy is considerably more complex than a Chapter 7 here in Washington State. In addition to the voluntary petition and related documents, filing a Chapter 13 also requires submission of a specific repayment plan that presents a feasible and plausible payment schedule. This repayment plan must specifically detail how you intend to make your monthly payments to the Trustee. In addition to the 341 meeting of creditors, you will also be required to attend another mandatory hearing, which is called a "confirmation hearing".
At your confirmation hearing, your case goes before a bankruptcy Judge for final review and approval. Typically, it is not necessary for you to attend the confirmation hearing. We are able to simply appear on your behalf. Prior to the confirmation hearing, it is not uncommon for creditors to file objections to your plan if they have issues or concerns with your proposed repayment plan. In a number of cases, this requires that we respond to their specific objections on your behalf.
In nearly all cases, however, we are able to get your plan confirmed by the Judge at the initial confirmation hearing if you are current with your Chapter 13 payments to the Trustee, any amendments requested by the Trustee have been filed, and any objections filed by your creditors have been properly addressed and resolved.
Once your plan has been confirmed, all you have to do is make all your monthly payments under the proposed Chapter 13 repayment plan, and you will receive your discharge. There are frequently a number of motions filed by creditors, the Trustee, and by us as attorney, during a Chapter 13 case. Chapter 13 bankruptcies are quite complex and it is highly recommended that you not attempt to proceed without an experienced Washington State bankruptcy attorney.
Reduce or Eliminate Interest on Consumer Debt
Unfortunately, certain kinds of debt simply cannot be eliminated through a Washington State Chapter 13 bankruptcy. These include child support, student loans and most income taxes. Once you consumer debt is under control, however, and your outstanding interest is lowered or eliminated, many people find that a Chapter 13 repayment plan is reasonable and feasible.
About the Author
The attorneys at Washington bankruptcy lawyer are experienced Washington State bankruptcy attorneys. From our offices in Seattle, Washington, we successfully file hundreds of Washington bankruptcy petitions every year. The attorneys at Seattle bankruptcy lawyer know that choosing the right bankruptcy attorney may be one of the most important decisions that you will ever make. We are your experts in all Washington State bankruptcy and Washington State foreclosure matters.
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