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Chapter 13 bankruptcy allows you to reorganize or modify most or all of your debts so you can keep your assets and pay your creditors in a way that is better for you, not for them. You will create a plan to pay off your creditors with one monthly payment and can often get the terms of the debts adjusted so you can afford to pay them off. In many cases you actually pay less in a chapter 13 than you would in a chapter 7 (typically in cases where you are retaining secured assets such as vehicles).
Create a plan to pay off your creditors with one monthly payment you can afford.
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What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a method of debt relief that allows you to pay off debt over a predetermined period. Unsecured debts and secured debts are reorganized in these bankruptcy cases so the business or individual can manage the repayment plan. The monthly income of the wage earner influences the repayment amount the court approves in each individual bankruptcy case.
Under U.S. Bankruptcy Code, once a debtor has filed, they are relieved of collection efforts, lawsuits, or any contact from creditors.
The documents you need to gather to get started include:
- Proof of Identity
- Proof of Income
- Income Tax Returns
- Real Estate Documents
- Lease Agreement (if you rent a home or vehicle)
- Vehicle Title(s)
- Account Statements (3 months)
- Divorce Decree (if applicable)
- Child Support Statements (if applicable)
- Proof of Charitable Contributions
How to File Chapter 13 Bankruptcy
We have a free download for Chapter 13 bankruptcy that walks you through the steps for how to file, proceed with credit counseling, and establish a repayment plan that suits your budget. You can download the Bankruptcy Packet below:
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File Today and Take Advantage of the Unique Benefits of a Chapter 13 Bankruptcy:
Stop foreclosure
A Chapter 13 will stop a foreclosure at any time before the trustee’s sale. This means that you can stay in your home and get current on your mortgage payments. As you pay your monthly payment according to your plan, the bankruptcy trustee makes payments to your mortgage company to bring current your house payments. You cannot do this when you file Chapter 7 bankruptcy.
Pay Taxes
If you owe past-due income taxes, you can include those taxes in your repayment plan. You can take 3-5 years to pay them, generally at no interest and no more penalties. If the taxing authorities have filed tax liens, you can still include those debts in your plan (and even reduce them in some cases) and pay them back without fear of the taxing authority garnishing or taking possession of your property. This is an advantage over a Chapter 7 bankruptcy where the taxing authority dictates the repayment terms.
“Strip-off” a 2nd or 3rd mortgage that is wholly unsecured
In a Chapter 13 bankruptcy, if the value of your home is less than the amount owed to the first mortgage, you may be able to have the court declare that your second or third mortgage is wholly unsecured. When you receive your bankruptcy discharge, the second or third lien on your home will also be discharged, which means the debt will be removed without you having to pay it. We would need to discuss this with you in person, but this is a benefit available only in a Chapter 13 bankruptcy filing.
Reduce your car or furniture loans
If your car loan is more than 30 months old or your furniture purchase is more than 1 year old, you can reduce the loan as part of your Chapter 13 plan. In such cases, only the value of the car or furniture is paid, not the entire loan balance. The interest rate is also reduced to a reasonable rate. If the loan is newer, we can still help out by lowering interest rates. When we meet with you we will explain in more detail how this works, but it generally results in significant savings if you want to keep the property.
Keep your assets
In a Chapter 7 bankruptcy case, the trustee’s job is to collect money from you to pay your creditors. They do this by taking property that you own, selling that property, and then using the proceeds to pay your creditors. Meanwhile, in a Chapter 13 bankruptcy case, you keep your property because you pay through your plan what unsecured creditors would have received if you had filed a Chapter 7. So you get to keep your property (except for unpaid luxury items). This also applies to your tax refunds; in Chapter 13, you get to keep a significant portion of your refund. We will discuss the specifics with you when we meet.
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Utah Chapter 13 Bankruptcy Attorney Team With Experience
Rulon T. Burton & Associates has been serving Utah families since 1981. We know how to reap the benefits of filing Chapter 13 bankruptcy without the hassles and frustration. Our team of experienced bankruptcy attorneys has seen all types of difficult cases and can help you.
Learn more about our team of attorneys and paralegals HERE. Our experts receive weekly bankruptcy filing training to provide the best experience possible for our clients.
Get in touch today by calling 801.305.3702.
448 E. Winchester St. Suite 175
Murray, UT 84107
Tel: (801) 305-3702
Text: (801) 288-0202
Fax: (801) 288-0947
Email: justin@rulontburton.com