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Questions about Chapter 13 bankruptcy?
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A Chap. 13 bankruptcy is a three to five year payment plan where you make a monthly payment to a trustee who divides up the payments among your creditors according to the plan. This type of filing is not as quick and easy as a Chap. 7, but some higher income debtors may be forced to go this route. It can also accomplish some things that a Chap. 7 cannot.
Our Chapter 13 bankruptcy attorneys in Seattle, WA will explain the process.
In a Chap. 13, you will have to attend a meeting of creditors with the trustee about a month after you file. Creditors do not appear in most cases. The trustee will look over your case to make sure you are following the laws, telling the truth and that your plan will work. A judge makes the decision whether to confirm, or approve. Almost all debtors who try to file a Chap. 13 without an attorney are unable to confirm their plan.
If your family makes over the median income for its size in the state of Washington, you may be forced to file a Chapter 13. The annual median income for Washington as of October 31, 2012 are:
- $53,302 for a household of one
- $63,873 for two
- $71,379 for three
- $82,942 for four (add $7,500 for each household member after that).
If your family makes over that amount, you have to submit to a “means test” that measures your allowed expenses to see if you still have to file a Chap. 13. If you have disposable income after going through the means test, you have to pay the disposable income to your unsecured creditors (creditors that are not backed up by property, such as a mortgage or car loan). This amount is in addition to the amount you pay in the plan to secured creditors and some other debts like taxes and back child support.
Even if you’re required to file a Chap. 13 to pay back some or all of your debt, having a plan to restructure the payments can be better than being garnished or trying to settle your debt. Garnishment can take 25% of your net income, adds legal costs and interest and only deals with one debt at a time.
Debt settlement is tricky and often hurts your credit rating as much as bankruptcy. Debts that are not provided for in the plan are discharged, or cancelled. Some debt can’t be discharged, such as student loans, tickets, some taxes and back child support or alimony. A well crafted plan will take care of the payments of these non-dischargeable debts.
Chapter 13 also allows you to pay car loans, mortgage arrears, taxes, tickets and back child support or alimony. You can also reinstate a license that has been suspended for unpaid tickets (not available with a Chap. 7). If you’re behind on a mortgage, a Chap. 13 allows you some breathing space to get caught up over five years and avoid foreclosure.
If your home is worth less than the balance of your first mortgage, you can remove a second mortgage. If you were ordered to pay joint marital debt in a divorce, it will also discharge these debts (both of these are not available with a Chap. 7). A Chapter 13 can also allow you to keep non-exempt property that would be taken in a Chap. 7 as well.
Generally Chap. 13’s are more difficult, costly and take much longer. It is important that you talk to knowledgeable Seattle Chapter 13 bankruptcy lawyers to make sure you are filing the best option for your situation.
Prevent your Seattle home foreclosure by filing a Chapter 13 bankruptcy petition.
We are skilled Seattle Chapter 13 bankruptcy lawyers and will explain how to stop your Seattle home foreclosure. We offer affordable flat fees and a free initial consultation to get the help you need fast. Call now to learn more about how we can help stop your Seattle home foreclosure, and for a free consultation with one of our affordable Seattle Chapter 13 bankruptcy attorneys.
Wage Earner Plan – pay back only the debts you can afford.
Chap. 13 lowers your monthly debts to an affordable budget. It typically involves a 60-month payment plan where usually the remaining balance of your unsecured debts are discharged at the end of the 60-month period.
Chap. 13 can also be utilized to:
- Lower your balance on your car loan to its fair market value if your car is over 2½ years old.
- Repay IRS tax debt without any further interest.
- Catch up on your mortgage(s) if you have fallen behind due to job loss or overwhelming credit card debt, etc.
- Discharge your 2nd mortgage if the fair market value of your home is lower than the balance on your first mortgage.
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Our Washington State bankruptcy attorneys are here to help you get your life back in control. We offer affordable flat fees. Contact our Chapter 13 bankruptcy attorneys in Seattle, WA today:
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