It can be easy to fall on hard times. If your financial situation leaves you struggling to pay bills but you don’t want to liquidate your assets, you may wish for an alternative that allows you to pay down your debts without having to liquidate assets. Chapter 13 bankruptcy can be a viable option for people who wish to get their finances in order without having to sell off their home or their cherished belongings.
At Newman Williams, P.C., our Pennsylvania bankruptcy attorneys can help you pave a path forward so you can get your money and your life back on track. To learn more about what our team can do for you, call our Stroudsburg office at 570-559-5507.
The difference between Chapter 7 And Chapter 13 bankruptcy
Many people think that bankruptcy means discharging all debt and wiping the slate clean. While Chapter 7 bankruptcy may look that way, Chapter 13, or “wage-earner’s bankruptcy,” allows debtors to repay much of their debt over three to five years. The inner workings of Chapter 13 bankruptcy are foreign to most people who have not been through the process themselves. Read on to learn more about how Chapter 13 works, what the process is like and what kind of results you can expect.
Here is a breakdown of what they are similar to and different:
- Like Chapter 7, Chapter 13 triggers an instant automatic stay – a warning from the courts that you have filed for Chapter 13 and that no efforts may be made to collect on your debts while your case is in process.
- Like Chapter 7, Chapter 13 allows for the discharge of some unsecured debt, such as medical expenses and credit cards.
- Unlike Chapter 7, Chapter 13 has the power to stop foreclosure in its tracks, provided it is invoked prior to the sale of your home.
- Unlike Chapter 7, Chapter 13 does not relieve you of responsibility for paying your secured debts. You will have to make monthly payments to your trustee for three to five years. You may have to pay back a portion of your unsecured debt as well.
There are many differences between the two chapters, along with the unique features and requirements of Chapter 13. Our lawyers will lay out a course of action for you, will do most of the application work for you and will keep you up to date as your case progresses.
The Chapter 13 bankruptcy process
While it is possible to file bankruptcy on your own, it is in your best interests to work with an attorney who can guide you through the process and advocate on your behalf.
To file Chapter 13, you will need several documents, including:
- Your most recent federal tax return
- A list of your creditors and the amount owed to each
- A list of properties you own
- An accounting of your living expenses
- Your income and its source
After your initial filing, you and your attorney will propose a repayment plan that will repay as much of your debt as possible over three to five years. Once the court approves a repayment plan, you will make regular payments to a court-appointed bankruptcy trustee. The trustee distributes the payment to your creditors in accordance with your plan.
At the end of the term outlined in your repayment plan, your remaining unsecured debts are wiped clean.
What are the benefits of Chapter 13 bankruptcy?
This process has many benefits for debtors, including:
- Individual creditors may not contact you directly but must go through your trustee.
- You can typically keep property like a home or car while paying off your debts.
- A Chapter 13 repayment plan can help protect your home if you are at risk of foreclosure.
If you have further questions about Chapter 13 bankruptcy and whether it’s the right option for you, do not hesitate to reach out.
Contact our office to discuss an affordable payment reschedule in a free consultation
Contact our office today to discuss your bankruptcy issues with our experienced Stroudsburg Chapter 13 bankruptcy lawyers. We are available from 9 a.m. to 5 p.m. weekdays and by appointment on weekends. Call us at 570-559-5507 or communicate via email to schedule a free initial explanatory consultation with an attorney.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
