Pew Law Center Bankruptcy Attorneys, Phoenix: How Chapter 13 Works for You
Our bankruptcy attorneys, Phoenix, often describe Chapter 13 as a debt reorganization. You may also have heard it referred to as an individual debt adjustment or a wage earner’s bankruptcy. What sets this request for financial relief apart from other bankruptcy chapters? The Chapter 13 petition involves a court-approved monthly payment plan that continues for a three to five year period (36 months, but no more than 60 months).
When the financial resource results of the mandatory Means Test determine that an individual is simply not eligible for a Chapter 7 liquidation bankruptcy, then debt reorganization is a viable alternative that experienced bankruptcy attorneys, Phoenix area filers particularly, examine carefully. Once the Chapter 13 plan is approved by the court, the petitioner makes monthly payments to the case trustee, who then makes pro rata distributions to the included creditor-recipients.
Chapter 13 Bankruptcy Attorneys — Phoenix Law Firm — Describe Benefits of Payment Plan
- You’ll get immediate debt relief when you file and throughout the bankruptcy case, although the final discharge takes three to five years.
- Remedy for debts that you owe on or before your case is filed.
- Puts an end to creditor harassment.
- You will have a court-approved payment plan for repaying debts.
- Your ordinary living expenses are always considered before your monthly plan payment amount is determined.
- Your monthly payments are based on what you can afford to pay, not on how much you owe.
- Your plan can extend the period of time you have to repay certain debts.
- You make your payments directly to the bankruptcy trustee, not to your creditors.
- Garnishment of your bank accounts and wages will stop.
- Repossession actions cease when your petition is filed.
- You can keep your vehicle and get your loan agreement adjusted to reduce the interest rate.
- Foreclosure actions against your home may be delayed.
- Your plan may cure past defaults and reinstate your home mortgage (you must stay current, though, on your mortgage from the filing date going forward).
- A second mortgage on your home may be entirely eliminated — stripped off — so you only have the first primary mortgage to pay.
- You may keep both your exempt and nonexempt property.
- Some creditors will get nothing at all under your court-approved plan.
- You will not have to repay any of your discharged unsecured debts, such as payday loans, credit card debts, repossession deficiency balances, most judgments, automobile loans, and certain tax obligations.
- Credit card companies, banks, mortgage companies, medical facilities, all will get a small percentage of what you owe – that can mean mere pennies on the dollar!
- You will sleep well once again, knowing that you and your family will have a better life with bankruptcy protection. And you’ll enjoy a happier future after the Chapter 13 plan is complete.
Chapter 13 Discharge: Our Bankruptcy Attorneys, Phoenix Legal Advocates, Have Solutions
So there are no surprises, our bankruptcy attorneys (Phoenix and surrounding areas) carefully explain to clients how the individual Chapter 13 filer makes payments over a period of three to five years. Once the plan is complete and the payments have all been made, the bankruptcy judge will grant the discharge. With few exceptions, after you have completed all payments under the plan, what is not paid back is automatically discharged! That means that personal loans, credit card debts, certain taxes, and much more are discharged forever when the Chapter 13 plan is completed by the debtor.
In the event that the petitioner does not complete the plan, however, then a discharge will not be granted by the court. If the debtor misses a payment under the repayment plan, then the court will dismiss the case. Because of this, many clients worry about what could happen to them if they simply cannot continue making payments under a Chapter 13 plan. As bankruptcy attorneys, Phoenix area law firms understand that the repayment plan necessarily involves assumptions about the future, including possible wages and employment — the future always involves uncertainty.
Your attorney, your creditors, the bankruptcy trustee, and the court all understand that circumstances sometimes change, and not always for the better. As the Pew Law Center’s bankruptcy attorneys (Phoenix area) always advise, you need to be mindful of two very important concepts:
Be assured knowing that Chapter 13 plans may be modified when there is good cause established.
When the circumstances are such that payments under any plan would create a genuine hardship for the petitioner, then it is possible to convert the bankruptcy from a Chapter 13 individual debt adjustment case into a Chapter 7 liquidation.
Bankruptcy Attorneys, Phoenix Metro-Area, Discuss Filing under Chapter 13
Our bankruptcy attorneys, Phoenix area’s Pew Law Center, fully appreciate the intricacies involved with filing for debt relief under Chapter 13 of the U.S. Bankruptcy Code. An individual, unincorporated business enterprise, or sole proprietorship may file for Chaper 13 debt relief. Either spouse may file a petition or both spouses may jointly file their petition.
The Chapter 13 petitioner must also satisfy the following requirements:
- Must have resided in Arizona for the greater part of the 180 days preceding the Chapter 13 filing (be at least a 90-day resident of Arizona).
- Within 180 days before filing, must have participated in credit counseling from an approved nonprofit agency, the official credit counseling certificate and proposed plan must be filed along with the petition.
Read More about Pew Law Center’s Bankruptcy Attorneys, Phoenix Services, and Chapter 13.
Every client’s financial situation is unique. There are dozens of variables that we consider before advising our client on a Chapter 11, Chapter 13, or Chapter 7 bankruptcy Arizona petition. Here at the Pew Law Center we will sit down with you and find out exactly what has happened with your finances. We will strategize and plan for the best possible result, and fully explain every available option so you can make informed decisions. Attorney Lawrence ‘D’ Pew and his legal team want the very best possible outcome for you, so you can take care of your family and your future.
Your Local Bankruptcy Attorneys — Phoenix Area Professionals
The Chapter 13 bankruptcy process can be overwhelming for those trying to file without legal representation. Here at the Pew Law Center, PLLC, we file bankruptcy petitions on behalf of area residents every day of the week and we are very proud of our high level of expertise, our outstanding professionalism, and our excellent customer service.
We will carefully explain the benefits and detriments of each debt relief option to you, so you can make these important decisions about your financial future. Over the years, the Pew Law Center has helped more than 2,000 area residents eliminate over $100 Million in debt through the filing of a Chapter 7, Chapter 11, and Chapter 13 bankruptcy!