The difference between Chapter 7 and Chapter 13 is that Chapter 13 requires you to make at least 3 years and usually 5 years of payments before receiving a discharge – a bar against collection of remaining balances.Chapter 13 bankruptcy is often called a “wage earner plan” because it allows consumers with regular income to restructure their debts. If you qualify for Chapter 13 bankruptcy, I can assist you in creating a proposed monthly payment plan which meets the requirements for confirmation (being made official and binding on creditors by the Court). You are expected to pay 100% of all valid claims or 100% of your disposable income as calculated by the means test, whichever is less.I am Christopher S. Mulvaney, founder of Mulvaney Law Offices, PLLC, in Bellevue, Washington. I teach clients about their debt relief options and guide them to financial freedom. My goal is to help people turn a challenging time in their life into a transformative time. How you ended up over your head doesn’t matter to me (no judgment); my plan is to help you exercise your rights, and to make the absolute most of the opportunity that the exercise of those rights provides.

Protection From Creditors as Long as You Make Plan Payments

You may be a good candidate for Chapter 13 bankruptcy if you are struggling to pay your bills each month, but you have a consistent income and assets that you want to keep, like a home with equity or a business with re-sale value.

Credit card debts, tax debts, mortgage arrears, medical debt and car loan balances are among the debts that can be paid through your Chapter 13 plan. It is important to have skilled legal guidance when filing for Chapter 13 to avoid dangerous missteps.

I help my clients steer clear of pitfalls and achieve many benefits from filing for Chapter 13, including:

  • 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.

Schedule A Free And Confidential Consultation With MLO

When you are ready to talk to a lawyer about whether Chapter 13 bankruptcy is right for you, please email me at chris@attorneymulvaney.com  to schedule an appointment. I offer free legal consultations to potential clients. What we discuss during this meeting will remain confidential, and I will do my best to help you even if you do not end up hiring me.

For more detailed information about Chapter 13 bankruptcy, including Top 10 Pitfalls of Chapter 13 Bankruptcy, consult my Blog.

Mulvaney Law Offices,PLLC, is located in Bellevue, Washington, representing estate planning & probate, chapter 7 and chapter 13 bankruptcy, and real estate transactions clients in Seattle, Tacoma, Everett, Bellevue, Redmond, Renton, Issaquah, Sammamish, Maple Valley, Burien, SeaTac, and throughout King, Snohomish and Pierce counties.

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