Chapter 13 is a section of the Bankruptcy Code which helps individuals, or small business owners (not a corporation or partnership) repay something to their creditors, usually based on how much they are able to repay over a 36- to 60-month period.
In Chapter 13 bankruptcy, Maryland residents have an OPPORTUNITY to catch up on PAST-DUE MORTGAGE PAYMENTS and CAR PAYMENTS, giving you time to KEEP YOUR PROPERTY. We are able to STOP FORECLOSURE or REPOSSESSION using Chapter 13. We can even help you stop the IRS from garnishing your wages or placing liens against your property!
CHAPTER 13 vs. CHAPTER 7 BANKRUPTCY
One purpose of a Chapter 13 bankruptcy, as opposed to Chapter 7, is to allow a debtor to keep certain assets ( e.g. HOUSE, CAR, RENTAL PROPERTY) that might otherwise be sold by a Trustee in Chapter 7. It also may be an alternative to Chapter 7, where one has too much “disposable income” to qualify for Chapter 7. Chapter 13 bankruptcy lawyers can also help you to get rid of certain debts that might otherwise not be dischargeable in Chapter 7, such as income taxes, fines, penalties and other debts.
WITH CHAPTER 13, YOU MAY BE ABLE TO GET RID OF LIENS ON YOUR HOUSE AND EVEN LOWER YOUR CAR PAYMENTS! That’s right – Under Chapter 13, it may be possible to reduce your car payments if you purchased that vehicle over 2.5 years ago, REGARDLESS of your interest rate or how much you owe!
Often, the decision to file for bankruptcy, whether Chapter 7 or Chapter 13, is a very difficult one, involving complex variables and strategies which require great foresight and creativity. SIRODY & ASSOCIATES, P.A. has filed many THOUSANDS of cases and we have the experience which allows us to lay out your various options so that you may decide which debt strategy is best for you.
HOW DOES CHAPTER 13 WORK AND HOW LONG DOES IT LAST?
Typically, your Chapter 13 lawyer will set up a plan payment for 36 months, unless additional time is requested. In any event, the plan will not exceed 60 months. A “regular wage earner” (in other words, you must have a source of income that is “regular”) will pay a certain amount to the Chapter 13 Trustee who will then take that monthly payment and distribute it to your various creditors. This payment will be based on several factors, including your “disposable income” after “reasonable expenses” are taken into account and the value of your “non-exempt assets”.
In addition to the “trustee plan payments”, you must stay current on ongoing, regular secured installment payments (i.e. mortgage, car payments.) The Chapter 13 plan will pay back any arrears on your house or car which existed PRIOR to filing the case, but you must remain current on payments which come due AFTER your case is filed.
HOW MUCH YOU PAY DURING YOUR CHAPTER 13 is dependent upon your personal circumstances and each case is different. IT IS VITAL that you have experienced Chapter 13 bankruptcy lawyers who can get this payment as LOW AS POSSIBLE by presenting your circumstances as favorably as possible. Many Chapter 13 lawyers simply take the easy way out and don’t really care how much you have to pay back. SIRODY & ASSOCIATES, P.A. FIGHTS FOR EVERY CLIENT and we won’t stop until your plan payment is as low as the law will allow.