chapter 13 Bankruptcy in Mentor, Ohio
Chapter 13 Bankruptcy Basics
Debt can be overwhelming, and it can have spiraling, devastating effects on the rest of your life. Even when you have income, sometimes you need additional help to protect that income from excessive garnishment or other penalties. In the case of those behind on car or house payments, filing for Chapter 13 bankruptcy protection can prevent the lenders from repossessing your vehicle or foreclosing on your home.
Why Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a form of bankruptcy that creates a plan to repay outstanding debts over three to five years. It is a form of personal bankruptcy and is an excellent option for those that have income that can be used to pay down debt.
Chapter 13 bankruptcy is frequently used by those who are behind on auto loans and even their mortgage since it allows the filer to maintain possession of their assets. This can be crucial since you will still need to get to and from work, so you can pay your obligations, and have someplace for your family to live. There is the condition, however, that once you file for bankruptcy you begin making your planned payments within 30 days.
How Chapter 13 Works
Whether filing for Chapter 13 independently or with a legal advocate, the process will largely remain the same. You’ll need to prepare a significant amount of paperwork that lists all of your debts, lenders, creditors, assets, and more. All of your debts and lenders must be listed accurately, since you cannot amend your filing once submitted, and you will only be protected from the creditors and lenders listed in your filing. Leaving out one or more can have you with an incomplete filing and you’ll be left to juggle other debts in addition to your Chapter 13 payment obligations.
You will also need to create a detailed repayment plan for paying off your debts within a 3 to 5-year period. You will need to list not only the amounts that you’ll be paying but also the specific dates. This plan will be reviewed by a court-appointed trustee, after which you will be able to get your discharge. You may only need to repay a portion of your total debt, which is often best negotiated with the help of a local bankruptcy attorney.
Once the plan is approved by the trustee, the bankruptcy court will often issue an order to garnish or “withhold” a portion of your wages. This withholding is sent to the trustee, who is the party responsible for disbursing those funds to the creditors to pay off the debts listed in your filing. Your debt will generally be paid in a specific order, starting with secured debt like mortgages and auto loans. Once those have been cleared, the trustee will begin paying down other debts, then any arrears and taxes, with lines of credit and unsecured debt being settled last.
Let Moseman Law Office LLC Lead You Through Chapter 13
There are many potential pitfalls and mistakes that the average person can make when trying to file for Chapter 13 by themselves. Not only can the process become incredibly complex with higher amounts of debt, but there is a considerable amount of paperwork, communication, and courtroom appearances that will be required.
While it is possible to get through the process independently, it can be done much more effectively with qualified legal representation. Reach out to Moseman Law today, and speak with one of our local experts about the specifics of your debt and filing needs. We’ll be your advocate at every turn, and we’ll make sure you are in the best position possible to begin to rebuild your credit once your obligations are fulfilled.