|
Knowing when to file a Chapter
13 bankruptcy is
an important skill that a lawyer only gains with experience. A
Chapter 13 bankruptcy isn't just filed for people who earn too much
money. Through a Chapter 13, you can restructure taxes at a very
favorable interest rate. In many cases, you can strip
off your second mortgage, meaning you get to keep your house
without having to pay the second mortgage. Finally, if a Chapter
7 bankruptcy is filed when you really should be filing a Chapter
13 bankruptcy, your case will receive unwelcome scrutiny from the
bureaucrats in the office of the US Trustee -- up to and including a
motion to dismiss your case.
- STOP FORECLOSURES.
- ELIMINATE YOUR
SECOND MORTGAGE IN MANY CASES!
- GET THE TIME YOU NEED TO CATCH
UP YOUR MORTGAGE PAYMENTS OVER THREE TO FIVE YEARS.
- ELIMINATE YOUR
SECOND MORTGAGE IN MANY CASES!
STOP
IRS TAX LEVIES. GET THE TIME YOU NEED TO PAY
BACK TAXES.
- ELIMINATE SOME BACK TAXES ENTIRELY.
STOP EXCESSIVE TAX PENALTIES.
- AVOID LOSING VALUABLE PROPERTY YOU MIGHT OWN
THAT IS NOT PROTECTED IN CHAPTER 7
A Chapter 13 bankruptcy is a plan of financial
reorganization. Contrary to popular belief, Chapter 13
does NOT mean that you must repay all your deb t.
Most Chapter 13 plans involve the repayment of about
25% (sometimes much less, sometimes more) of your debts over a three to five year period. The
debt that is not repaid is "discharged" or written off
when you complete the bankruptcy repayment plan.
Click here for Chapter 13
Frequently Asked Questions
Chapter 13 bankruptcy is based in part on your ability to
repay. However, under bankruptcy "reform", your ability
to repay is determined mainly by application of
"allowable" expenses established by the Internal Revenue
Service's collection standards. This means that even
though your expenses may be higher than the IRS' idea of
"average" you will still only be allowed to deduct the
maximum allowable expenses in each category from your
income. Your net after tax income -- minus your
allowable monthly expenses -- equals the amount of the
monthly check you must write to the bankruptcy trustee
under a Chapter 13 reorganization plan. However,
certain other types of expenses are deductable without
any pre-set limits; for example, day care expenses,
medical insurance, the full amount of your mortgage
payment, and your ongoing 401(k) contributions.
If you are one of the few bankruptcy candidates that has
non-exempt property to lose in Chapter 7, then Chapter
13 may be for you. Non-exempt property is property
that isn't protected by the laundry list of
bankruptcy exemptions.
|