Chapter 13 Bankruptcy

In certain circumstances, Chapter 7 bankruptcy is not a viable option or does not allow a client to fully achieve their ultimate goal of financial freedom. For some clients, a Chapter 13 bankruptcy affords better protection from creditors or may allow them to retain an otherwise non-exempt asset. Chapter 13 is a repayment option, allowing clients to propose a repayment of all or a portion of their debt over a maximum five-year period.

Chapter 13 bankruptcy may be the better option for a client attempting to catch up past-due amounts on mortgage or car loans. It may also be advisable for clients with otherwise non-dischargeable debts, such as tax or domestic support obligations, allowing them to propose a structured repayment option on those debts within the protections of the Bankruptcy Court.

Asset Protection

There are times when a client owns real estate or other personal property that has equity beyond the allowable exemption and would therefore be sold in a Chapter 7 bankruptcy. Clients with such equity can protect those assets within a Chapter 13 bankruptcy by paying an equal amount over the five-year plan to the value of those otherwise non-exempt assets. For example, if a client has $10,000 of non-exempt equity in a home, he or she must repay at least that $10,000 amount to the Chapter 13 Trustee over the duration of the case. This satisfies what is referred to as the “liquidation test” and allows the client to keep their otherwise non-exempt asset.

Secured Debt

Not only does Chapter 13 allow clients to catch up past-due arrears on mortgage and car loan, in certain circumstances it allows a client to “cram down,” or lessen, secured amounts and/or interest rates on car loans or completely remove second mortgage debt through “lien stripping.” While evaluation of these options is oftentimes complex, Hicks Hill will work with you to ensure you take full advantage of all of the relief options available in bankruptcy and propose an affordable plan payment through Chapter 13 where appropriate.

Determining Your Monthly Payment

Several factors go in to determining what a client’s Chapter 13 payment will be upon filing: 1. you must meet the “liquidation test,” as outlined above; 2. you must pay 100% of your “disposable income” each month, as determined by your reasonable and actual income and expenses at the onset of your case; and 3. you must repay at least a specified amount as is determined by a formula set forth in the bankruptcy requirements. If we determine that Chapter 13 is your best option, Hicks Hill will work tirelessly to ensure your monthly payment remains affordable while meeting all of the above requirements. Bottom of Form

Is Chapter 13 Right For You?

Katie Hill has the experience and expertise necessary to do a complete and thorough analysis of your situation in order to determine your best solution. She knows the positive impact bankruptcy can ultimately have on an individual or family but also understands the potential consequences of filing and can therefore guide you through all of your options, bankruptcy and otherwise, so that you can make an informed decision regarding your debts.

For the experienced and reliable guidance you need, please contact us today at (770) 428-1000. We offer a free initial consultation to evaluate your circumstances and determine your best path forward. Once we determine if a Chapter 13 bankruptcy is right for you, we will walk you through the entire filing process.

We are here to help you make smart and informed decisions regarding your financial situation!