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Chapter 13 Bankruptcy

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Chapter 13 Bankruptcy

Chapter 13 bankruptcy is an option for many individuals who are behind in bill payments. The Law Office of Brian R. Lewis can help you with your Chapter 13 filing and ensure that all goes smoothly from the moment you decide to file right through to the very end of the process.

Filing for Chapter 13 Bankruptcy in Massachusetts

Chapter 13 bankruptcy is sometimes called the “wage earner” plan. It is the preferred bankruptcy option for those with an income, be it through traditional employment or self-employment. It extends the amount of time in which you can pay back your debts and reduces the total amount owed on certain unsecured debts. It also ends the accumulation of interest and fees on debts.

Benefits of Chapter 13 include:

  • Eliminating a second or junior mortgage on a home
  • Eliminating judgment liens on a home
  • Extending the time to pay back delinquent mortgage or automobile payments by up to five years
  • Cramming down auto loans so only the current value of the vehicle is owed
  • Stopping wage garnishment
  • Stopping IRS and state tax collection efforts

The Chapter 13 Process:

Trustee Assignment

Each Chapter 13 filing receives an impartial trustee appointed by the court. The role of this trustee is to serve as the disbursing agent. He or she collects payments from the debtor and sees that creditors receive these payments.

Automatic Stay

An automatic stay is issued once a Chapter 13 bankruptcy petition is filed. As long as a stay is in effect, creditors are not permitted to file lawsuits, garnish wages, or contact a debtor for payment. This means as soon as you file the petition, the harassing phone calls from creditors end and your debt relief begins.

It is possible to prevent an immediate foreclosure by filing for Chapter 13 bankruptcy. Mortgage payments must be brought up to date, but the length of time homeowners have to accomplish this is extended by several years.

Plan of Repayment

A plan of repayment must be filed with the Chapter 13 petition or within a short time after. Plans include fixed amounts paid to the trustee on a monthly basis. The plan might include payments lower than the full payment due to creditors. The plan must be approved by the court, but debtors are required to make the payments while official approval is pending.

Meeting of Creditors

The Chapter 13 bankruptcy process includes a Meeting of Creditors. It is usually scheduled within 20 to 50 days of the filing of the petition and requires the debtor to answer questions under oath. Creditors are permitted to ask questions concerning the debtor’s financial affairs and his or her plans to repay the money owed to them. The court-appointed trustee and debtor’s lawyer are also present during the meeting.

Once the meeting is complete the judge makes a determination about the proposed plan of repayment. If approved, the trustee commences distribution of the funds. If not approved, the debtor is offered the option of modifying the plan. The debtor might also opt to convert to a Chapter 7 bankruptcy filing.

In some cases, the Chapter 13 case cannot be converted to Chapter 7 and the modified plan cannot be approved. If this occurs, the case is dismissed. The trustee pays the debtor back any money collected under the repayment plan, less a few specified costs.

Meeting the Requirements of the Repayment Plan

After a repayment plan is confirmed, a debtor is responsible for making the agreed upon payments at the agreed upon times. Property protected under the plan is untouchable, as long as the debtor meets the requirements of the plan. The debtor is also restricted from incurring any significant amount of new credit.

Chapter 13 Discharge

The discharge process of a Chapter 13 bankruptcy is complicated and has undergone recent changes. This is one of the reasons it is so important to work with an experienced attorney when filing for bankruptcy. The discharge allows you to move from living under the restrictions of the repayment plan to a normal financial life. Debtors are released from dis chargeable debts and financially free to move forward. This is an important transition and you need to be sure it goes well.

Is Chapter 13 bankruptcy right for you?

At the Law Office of Brian R. Lewis, we have worked with many individuals concerning their Chapter 13 filing. We can answer your questions and support you throughout the process.

Have you had enough dealing with harassing phone calls from creditors? Are you afraid that if you do not do something soon, you will lose your home? We can help you file your Chapter 13 bankruptcy petition today. Put your mind at ease and turn your financial future around. Contact the Law Office of Brian R. Lewis today for your free initial consultation today!