Practice Areas - Chapter 13 Bankruptcy
Chapter 13 Bankruptcy
Having trouble paying the monthly bills? Are you behind on your mortgage payments? Are you in foreclosure? A Chapter 13 bankruptcy plan can be the answer. A Chapter 13 plan can:
- Stop mortgage foreclosure and make your house affordable again
- Take wage garnishments off your paycheck
- Stop repossession and get back your car or truck
- Lower - or eliminate - credit card, medical, and most other debt
- Stop phone calls from creditors
- Give your family a fresh start
Unlike a Chapter 7, which is designed for those with no large assets such as a house to protect, Chapter 13 bankruptcy in Idaho is a payment plan. In a Chapter 13, you make monthly payments directly to the bankruptcy trustee for a specified period, usually 3 to 5 years.
Generally speaking, if you have a home you want to protect, or you earn more than the average for your area, you may be a good candidate for Chapter 13 bankruptcy.
A Chapter 13 stops all creditor collection - including mortgage foreclosure - with what bankruptcy law calls the "automatic stay." This provision gives you protection from creditors while your bankruptcy attorney works out a payment plan that best fits your unique circumstance.
Instead of paying the full amount you owe, in a Chapter 13 your payments are determined by what you can actually afford.
What Exactly is Chapter 13 Bankruptcy?
Your legal alternative to liquidation
When most people first consider bankruptcy, they naturally think of Chapter 7 liquidation. After all, Chapter 7 is the section of the bankruptcy code used by most individual consumers, and it requires the petitioner to sell off certain assets before the court discharges the remaining debt. But Chapter 13 bankruptcy requirements don't force you to sell any of your property. On the contrary - it provides effective protection for your most valuable assets. Under Chapter 13, an individual is able to restructure debt, repay a portion and discharge the remainder. In Idaho, Chapter 13 bankruptcy law allows you to keep what you value most: your house and other treasured possessions, while making debt payments over a three-to-five-year period.
Your debts reorganized according to your plan
Filing for Chapter 13 allows you considerable input into the formulation of your repayment plan. You will work with your attorney to propose your own debt reorganization, and submit it to the court for approval. Since the plan is based on your disposable income, you can lower most or all of your non-mortgage debt payments. Those reductions make it easier to make your mortgage payments.
Chapter 13 stops foreclosure and repossession
Chapter 13 is usually a three-to-five year path to debt relief, but as soon as you file, the bankruptcy court orders an automatic stay, which prevents your creditors from taking any collection actions. Instantly you're protected from foreclosure, harassing phone calls, threatening letters, lawsuits and wage garnishments.
So, if there's no contact between you and your creditors, how do you pay your bills that become due after the date the bankruptcy is filed? Under your court-approved repayment plan, your debt is reduced, rescheduled and consolidated into one easy monthly payment you make directly to the bankruptcy trustee. The trustee then distributes funds from your payment to your various creditors. Chapter 13 not only reduces your debt, it effectively eliminates all the unpleasantness of managing those bills. Your attorney and bankruptcy trustee tackle all the tough aspects of your filing and you finally get to relax.
Requirements to File for Chapter 13 Bankruptcy - Who can file for relief in Idaho?
There are two separate requirements for Chapter 13 bankruptcy in Idaho. First, you're required to prove that you're eligible for a Chapter 13 reorganization of your debt. Then you are required to complete your repayment program over the course of three-to-five years. Upon successful completion, the bankruptcy court will discharge your remaining debt.
Because there's no requirement that you have an attorney assist you, many potential filers either delay taking action or try to handle their bankruptcy petition on their own. Folks who try to file "pro se" - acting as their own attorney - find out very quickly how complicated bankruptcy laws can be. Yet, because they're already deeply in debt, they think it's better to save a few bucks on the front end. So they download forms from the internet and try to get them in acceptable shape to file with the court. That usually turns out to be a terrible waste of their time, since the court almost never confirms pro se Chapter 13 petitions.
Sutherland Law Office is committed to delivering relief for our Idaho clients, with a minimum of stress and expense. Our modest fees are truly a worthwhile investment, when you consider that your bankruptcy attorney can be the difference between a petition the court accepts and one the court rejects. Sutherland Law Office has the experience to get your filing done right.
Are you eligible to file Chapter 13 bankruptcy in Idaho?
There are several steps you must take to prove your eligibility to file for Chapter 13. You must:
- Complete an approved online credit counseling course
- Demonstrate that you have a reliable income
- Present a claim of secured and unsecured debt that are within the legal limits
- Show that you have not filed Chapter 7 bankruptcy in the previous four years, or Chapter 13 bankruptcy in the previous two
Sutherland Law Office works with you to make sure you pass with flying colors. We can direct you towards swift, effective credit counseling. Most people working a regular job or are receiving social security or pension benefits will qualify to file an Idaho Chapter 13 bankruptcy plan. There are also limits to the amount of you can claim in a Chapter 13 filing, however, these limits are so high, they are rarely an issue for a petitioner.
Completion requirements and benefits under Chapter 13 bankruptcy
During the Chapter 13 bankruptcy process, the court works out a repayment plan for you based on your income. Depending on your income, your plan will run from three to five years. It's important for you to make your monthly payments faithfully, because when you successfully complete the plan, the court discharges any remaining debt. This relief can be substantial. Because filing for Chapter 13 requires a petitioner to prove he or she has a steady income, most Chapter 13 filers have no difficulty fulfilling their plan and they benefit greatly from the discharge after completion.
Call Sutherland Law today with any Bankruptcy Questions you may have.