Chapter 13 Bankruptcy | Ron Lundquist Bankruptcy Lawyer - Eagan
As opposed to a Chapter 7 bankruptcy, which eliminates all dischargeable debt, Chapter 13 bankruptcy puts you in charge of how much you are paying your creditors. In a Minneapolis Chapter 13 bankruptcy, we propose the payment based on your budget. Almost 100% of my Chapter 13 payments proposals are accepted without dispute by the Chapter 13 trustee and by creditors.
One common myth about Chapter 13 bankruptcy is that ALL debt has to be repaid and that you are simply achieving a more manageable payment plan. This is not true. The amount you pay back is determined by many factors. The most important factor is your ability to repay.
For example, if your budget shows you can only afford to pay back 10% of your unsecured non-priority debt, then that is what you pay back. When your Chapter 13 payments are completed, the remaining 90% would be wiped out.
Why would a client choose Chapter 13 bankruptcy? There are many reasons, and some of them may resonate more with you than others. Ultimately, the decision to file is yours. As your bankruptcy lawyer, I am simply here to guide you in making the best possible choice.
Here are just a few of the reasons you may consider Chapter 13 bankruptcy:
- You can save your house from foreclosure with Chapter 13 bankruptcy, paying back the past-due payments via a proposed and agreed upon payment plan. To stop a home foreclosure, you must file your case in advance of a sheriff sale. Because of this, it is best to act sooner rather than later.
- You can repay an auto loan through a Chapter 13 bankruptcy plan. Sometimes you can pay back what the car is currently worth rather than what you owe on the car. This is called “cramming down” the auto loan. I have done this successfully for many clients.
- Two types of debt that may be wiped out through Chapter 13 bankruptcy that aren’t wiped out by Chapter 7 are income tax debt and child support arrears. The amount of debt, payment history, and other factors will determine whether or not the debt may be reduced or eliminated.
- In Chapter 7, you can file with exemptions that allow you to maintain certain assets that would otherwise be claimed against your debt. However, not every asset can be protected in this way, leading people to choose Chapter 13 bankruptcy instead.
- If you already filed a Chapter 7 bankruptcy and eight years haven’t passed, you legally cannot file again. But you can file a Chapter 13 bankruptcy case only four years after filing Chapter 7.
- I have had many clients who qualify for Chapter 7 but opt for Chapter 13 bankruptcy instead. Oftentimes, they feel they can afford to pay back even a small amount to their creditors and wish to do so.
- Lien-stripping is becoming more and more common.
A Chapter 13 bankruptcy is a powerful tool to accomplish a client’s goals that cannot be achieved in any other way. I can help you choose whether Chapter 13 bankruptcy is the best option for you and proceed to file your case.
The Chapter 13 bankruptcy process is fairly simple. It requires a couple credit counseling courses and your attendance at a hearing, but most of the work is done by me on your behalf. Your case will be confirmed at a second hearing, following which you will submit payment to the Chapter 13 Bankruptcy Trustee who will distribute the funds to creditors. At that time, you will receive a court discharge that wipes out the remainder of your dischargeable debt.
I am recognized as a debt relief agency, and provide bankruptcy relief using the laws of the State of Minnesota and the United States Bankruptcy Code. Together we can get you back in charge of your finances. To set up your initial consultation, call today at 651-454-0007.