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Christopher S. Mulvaney


  • Avoiding garnishment of 25% of your net pay by one creditor while balances to other creditors keep growing.
  • Avoiding repossession of a vehicle and allowing payments which are not current to be caught up over 5 years with a potentially lower “crammed down” balance, payment amount and interest rate.
  • Avoiding seizure of any bank accounts up to the amount of any Judgment against you
  • Paying tax debt over 5 years without interest or penalties.
  • Catching up arrears on a mortgage over 5 years.
  • Potentially stripping a lien from your home.
  • Potentially discharging debts that are not dischargeable in Chapter 7.
  • No more creditor harassment. Creditors cannot pursue collection actions against you as soon as your case is filed due to the automatic stay. Creditors must file a Motion and set a hearing if they want to take action against you. Creditors who are not part of your plan can sue you and garnish your wages while you are in Chapter 13, so list all creditors.
  • Time Limited Repayment (No Perpetual Debt Wheel) Completing a Chapter 13 plan is difficult. The plan requires that you have no disposable income (any more than necessary to live) for 5 years. However, without Chapter 13, many debtors would struggle for 10 years or more to pay off the same debt if they ever do so.
  • Repayment of all Creditors. Many businesses offer debt consolidation, but these services can lead to an endless cycle of debt for consumers because not all creditors are included or are bound by the plan as they are in Chapter 13. Chapter 13 bankruptcy protection, under the guidance of a skilled attorney, offers a secure legal framework for repayment of debt.
  • Stopping foreclosure. Chapter 13 bankruptcy can stop foreclosure proceedings any time prior to the sale. You can get up to date on your mortgage through your monthly debt repayment plan so long as you pay the regular mortgage payment plus the arrears divided by 60 at the contract interest rate plus the 5% Trustee’s fee on the whole amount. This is rarely feasible.

USTP Position Concerning Chapter 13 Disposable Income Test