Chapter 13 Bankruptcy is a plan you and your attorney create to help you reorganize your secured debts and discharge most if not all of your unsecured debt. Secured debts are debts attached to your home, cars, tax liens, and others. Just like in a chapter 7 bankruptcy, debtors can get rid of most or all of their unsecured debts, which include credit cards, medical bills, payday loans, personal loans, old taxes, and many others.
Reorganizing means a debtor proposes a plan to the court to pay off certain debts within 3 to 5 years. Debtors often benefit from much lower interest rates on secured debts in the range of 4-5%. For example, if a debtor has a high interest auto loan at 25%, the debtor could propose a plan paying 4% interest on the loan, saving thousands of dollars in interest over the life of the bankruptcy plan.
Chapter 13 bankruptcy provides instant and automatic protection from creditors the moment it is filed. This means all collection related garnishments, tax levies, phone calls, letters, or other creditor harassment must immediately stop upon filing pursuant to the automatic stay in section 362 of the Bankruptcy Code.
Yes. The automatic stay is the same in both Chapter 7 and Chapter 13 Bankruptcy. Filing a chapter 13 case stops repossessions, foreclosures, evictions, attachments, and utility shutoffs. It offers debtors very strong protection and creditors cannot take any further action against the debtor or the property without permission from the bankruptcy court.
The factors that affect your monthly payment include: your income, how much secured debt you are including in the plan, and whether you owe back taxes, child support and alimony. An experienced bankruptcy attorney at the Morrison Law Group can help you determine what your monthly payment will be in a Chapter 13 Bankruptcy case so you can make an informed and educated decision to determine if it is right for you. Call us today at 801-456-9933 or email us on our website.
In some chapter 13 cases where your household has income that is above the median income in Utah for your family size, you may be required to pay back a portion of their unsecured debts if the they “disposable monthly income” or if you are seeking to keep assets with value above Utah’s exemptions.
Chapter 13 is not a liquidation, so the Trustee does not take any of your assets to pay your creditors. You keep everything you own. Some other advantages to filing a chapter 13 include:
At Morrison Law Group, we make it easy and inexpensive to get your chapter 13 case going. We offer low cost and even zero down options depending on your circumstances.
Most people pay little to none of their unsecured debts back in a chapter 13. If you wish to keep secured items like a vehicle or trailer, you pay those amounts over the life of your plan. Experienced attorneys at Morrison Law Group will help you determine what you are required to pay as part of your chapter 13 plan. Call today or contact us on our website to schedule your free consultation.
