For clients who :
Are facing a Foreclosure (and want to keep their home)
Are being threatened with a Vehicle Repossession (and want to keep the vehicle)
Owe back Taxes
Make too much money to qualify for a Chapter 7 but still need relief from overwhelming debt
Chapter 13’s can be an AWESOME solution!
For clients who are facing a foreclosure because they are behind on their mortgage and cannot afford to get it current, a Chapter 13 enables them to STOP the foreclosure proceedings and repay the back mortgage (i.e. mortgage “arrears”) they owe over the next 36-60 months! This results in a payment amount they can afford and allows them to keep their home!
Additionally, we can often times “strip off” any 2nd or 3rd mortgages (in cases where the fair market value of the home is less than the 1st mortgage balance) and repay them at a mere percentage (often times as little as 1-2%) as payment in full!
Clients who are behind on their car payments and facing repossession can automatically stop it by filing for Chapter 13 bankruptcy relief. Once the Chapter 13 is filed, the client can then keep their vehicle and repay the vehicle loan by spreading the loan balance out over the next 60 months, thus often times lowering their monthly car payment and making it more affordable!
Additionally, we can often times lower the interest rate paid to car lenders when repaying the car loan through a Chapter 13.
Clients who have owned their vehicles for more than 2 ½ years can also “cram-down” their vehicle loan in a Chapter 13. When a car loan is crammed down, the client repays the car loan by repaying the fair market value of the car (vs. how much is still owed on the car loan)! Then, any money still owed to the car lender is repaid as if it were an unsecured debt and repaid at a mere percentage … as payment in full!
The IRS often times demands repayment for back taxes at amounts that clients simply cannot afford. Filing a Chapter 13 enables clients to “spread out” their repayment of back taxes over the next 60 months. This enables clients to pay off back taxes at a monthly payment they can afford. This also stops the IRS from trying to collect via other means like taking money out of client’s bank accounts!
HIGHER INCOME CLIENTS WHO DON’T QUALIFY FOR A CHAPTER 7:
We often see clients who make too much money to qualify for Chapter 7 bankruptcy relief (it goes by your average gross income over the last 6 months).
However, even though such clients made too much money to qualify for a Chapter 7, they may still be burdened with overwhelming debt which they cannot afford to pay.
In such circumstances, a Chapter 13 bankruptcy can be an awesome source of relief!
In a Chapter 13, such clients can keep and repay any secured debts they want to keep (such as house or car loans), and repay any unsecured debts (such as credit cards, personal loans or medical bills) at a mere percentage (often times as little as 1-2%) as payment in full!
This enables such clients finally get out from the debts that have been holding them down and causing them to lose so much sleep at night!
At BEACON LAW, P.A. we help our clients stop foreclosure, stop wage garnishment, stop vehicle repossession, stop lawsuits and stop creditor harassment through debt negotiation and/or assisting them in filing for Chapter 7 or Chapter 13 bankruptcy.