Chapter 13 Bankruptcy
Chapter 13 Bankruptcy
Chapter 13, commonly referred to as a “wage earner” bankruptcy case, involves a reorganization of your finances to allow you to pay back some or all of your debts over a period of time. Chapter 13 does NOT require you to repay all of your debts. Instead, it involves repaying a certain amount of debt in order to keep all of your property. Some creditors will be paid in full, others will get a percentage. This is a case by case determination and depends on what needs to be accomplished.
If your goal is to stop a foreclosure, garnishment, repossession, or get back a vehicle after it’s been repossessed, then Chapter 13 may be right for you. Some people think of Chapter 13 bankruptcy, like credit counseling or debt management. The main difference is that under Chapter 13 bankruptcy, your creditors do not get a say about how much they get paid – the law and the bankruptcy court make the decision.
The real beauty of Chapter 13, however, is that it changes when you need it to change. If your income goes up or goes down, or if you decide that the house or vehicle isn’t worth saving, you can always go back to the bankruptcy court to modify your repayment plan. Chapter 13 bankruptcy is complex, and many cases fail because they are not handled carefully. We have the experience to make your Chapter 13 case a success, giving you the chance to get a fresh start and protect all of your property. When you come to our office for your free, no-obligation consultation, we’ll analyze your situation completely to come up with the right solution for you.
How Does It Work?
About thirty (30) days after your case is filed with the court, you will have a short meeting with the Chapter 13 Trustee. Don’t worry! Your lawyer will be there with you to answer any questions you have. After this meeting, there is a ten (10) day period for creditors to object to their treatment in the plan. Most objections are procedural and won’t require you to attend any more hearings. If objections are filed, we will get them resolved. Once all objections, if any, are resolved, your case will be confirmed. You will continue to make your payments for the duration of your confirmed plan. Upon completion of the plan, the court will issue you an Order of Discharge, your case will be closed, and your bankruptcy should be complete.
Chapter 13 bankruptcy can be a very smooth process if your case is prepared properly. At Crawley Law Firm, we pride ourselves on the number of successful Chapter 13 bankruptcy cases we have filed, and look forward to helping you as well.
How Long Does It Take?
Other factors that go into your Chapter 13 Plan are the amount of debt you have and the value of your assets. If you’re thinking about Chapter 13 bankruptcy, the best thing you can do is review your options. We’ll outline the entire process for you and help you determine if Chapter 13 is right for you.
What To Bring?
Filing for bankruptcy in Arkansas can be simple in the right hands. That’s why when you meet with Mr. Crawley at Crawley Law Firm, you are asked to bring certain documents and information for us. With the right information, we can get to the heart of your problem quickly and effectively, giving you the help, you need. When you come for your consultation, you will need to bring several documents.
- Driver’s license
- Social security card
- Paystubs – Last 6 months
- Bank Statements – Current month and past two months
- Tax Returns – 2017, 2018, 2019, 2020
- State Tax Returns – 2017, 2018, 2019 & 2020
- 2020 W2
- Personal Property Assessment – Most recent
- Vehicle registration – Only for ones you owe money on
- Proof of vehicle insurance
We will pull a credit report, but we will need a list of creditors for any not on there (name of creditor, address and amount owed)
You can get one FREE annual credit report from all three credit reporting agencies (Experian, Equifax, and Transunion) by going to www.annualcreditreport.com or by calling 877-322-8228.
If we need any further information, we will let you know.
Chapter 13 And Your Credit Score
Assessing Your Finances
Special Considerations for Chapter 13
Chapter 13 bankruptcies have some features that make them different from Chapter 7 filings, both to consumers and credit reporting agencies. In Chapter 13, you’ll have likely held on to real assets such as land, homes, and cars. This means that you will come out of bankruptcy with assets that can be used as collateral, and creditors know that. Beware of “credit recovery firms” that offer to fix your financial problems. They are usually a scam, preying on people who are recovering from a difficult financial time.
Another thing to be aware of after Chapter 13 is reaffirmed debt. Your repayment plan may have included debts that you agreed to pay normally in spite of your bankruptcy. If this is the case, you’ll still have those payments until they’re fully paid off, as they are not discharged at the end of your bankruptcy.
Chapter 13 is a longer process than Chapter 7 bankruptcy, and credit scores begin to rebound after the date of filing, not the date of discharge. This means you’re likely to see a higher score coming out of bankruptcy with this type of filing.
Steps To Rebuilding
Now you’re ready to make a plan to rebuild your credit score. This process can take a long time, several years in fact, but don’t get discouraged or impatient. It’s far from impossible, and taking the following steps will help get you there.
Secured Credit Cards
A secured credit card functions like a normal credit card, except that it requires a deposit in the amount of the credit limit in a savings account with the issuing bank. Because this minimizes the risk to the bank, the interest rate is typically low. Payments are reported to the credit rating agencies, so they’ll raise your credit score. Because of this, though, any missed payments will affect your score negatively.
After your credit has begun to look better, you’ll want to apply for an unsecured loan or card. Keep an eye on interest rates and required monthly payments, though. Your score will likely be on the lower end still, so rates are likely to be high. Don’t let fees and interest eat into your budget and damage your overall financial recovery.
Sometimes mortgage companies just don’t pay attention to the laws. Even if you file a Chapter 13 bankruptcy to stop a foreclosure, the mortgage company will often keep on tacking on illegal fees and costs. This inflates the balance on your mortgage, making it impossible to keep up with payments — and forcing you deeper and deeper into the foreclosure sinkhole. That’s why at Crawley Law Firm, we know that Chapter 13 filing is a powerful tool to stop the sale of a home in foreclosure — but it’s just the beginning of the work needed to protect our clients.
What do we do? We go one step beyond a traditional bankruptcy law firm.
As soon as the case is filed, our experienced team of mortgage abuse professionals starts to gather information about your mortgage account. Not only do we look at your closing documents, but you also get a complete history of the loan.
Our Team Will:
Make sure that your monthly mortgage payments are being properly applied under the terms of the mortgage and note.
Review the escrow account to ensure that it is properly managed under federal law.
Guard against any unreasonable and unnecessary charges, fees, costs, and expenses being assessed against your mortgage account.
Monitor the loan to make sure that bankruptcy payments are being applied correctly.
Determine who the true owner of your mortgage and note is.