Bowie Chapter 13 Bankruptcy Lawyer

Attorney for Chapter 13 Debt Consolidation in Bowie, MD

For people who have experienced financial problems, Chapter 13 bankruptcy can provide a lifeline. By reorganizing debts into manageable payments, Chapter 13 helps people who have a steady income regain control of their finances while protecting their assets. At The Law Office of Donald L. Bell, we provide legal guidance for people and families in Bowie, Maryland who are seeking relief from overwhelming debts. We work to help our clients achieve lasting financial stability and peace of mind.

How Chapter 13 Bankruptcy Works

People with regular incomes can use Chapter 13 bankruptcy to create a repayment plan to pay back some of their debts and eliminate other debts. It can be particularly beneficial for those who have fallen behind on their financial obligations but want to avoid the loss of important assets, such as their home or car. It offers the opportunity to avoid foreclosure, stop creditor harassment, and work toward financial stability at a manageable pace.

Chapter 13 bankruptcy is distinct from Chapter 7 in that it focuses on restructuring debts. Through Chapter 13, a person can repay a portion of their debts over time without losing valuable assets. The process begins with the creation of a repayment plan, which is based on a person's income, debts, and living expenses. This plan allows a person to catch up on missed payments and regain financial stability.

Creating a Repayment Plan

A Chapter 13 bankruptcy case will involve the creation of a repayment plan that spans three to five years. The specific time period will depend on the debtor's income and the amount of their debts. The plan will outline the payments that will be made toward secured and priority debts, and it will also provide for the repayment of some unsecured debts. Monthly payments will be made to a bankruptcy trustee, and these payments will be distributed among different creditors according to the terms of your plan.

Issues addressed in a repayment plan will include:

Secured Debts

Certain types of debts, such as mortgages or car loans, are tied to collateral. In Chapter 13, past-due payments on these debts can be made up through the repayment plan. This will allow a debtor to keep their property as long as they continue making payments under the plan. Chapter 13 can be helpful for people in situations involving foreclosure or repossession, as it stops these proceedings and allows the debtor to become current on payments.

Unsecured Debts

Credit card balances, medical bills, personal loans, and other unsecured debts may also be addressed through Chapter 13. While these debts may not be fully repaid, the repayment plan may include partial payments based on a debtor's disposable income. When the repayment period is complete, any remaining balances on eligible unsecured debts will be discharged.

Priority Debts

Some debts must be paid in full through a Chapter 13 repayment plan. These include tax debts, domestic support obligations such as child support and alimony, and certain legal judgments. A debtor can catch up on these critical obligations while avoiding wage garnishment or other collection actions.

Benefits of Chapter 13 Bankruptcy

Reorganizing, consolidating, and eliminating debts through Chapter 13 can provide benefits that may significantly improve your financial situation, especially if you are struggling to meet monthly obligations or facing legal judgments or other actions by creditors. These benefits include:

• Preventing Foreclosure: If you are behind on mortgage payments, filing for bankruptcy will stop foreclosure proceedings. The automatic stay that goes into effect when you file for bankruptcy will halt a foreclosure and other creditor actions. You can include past-due mortgage payments in your repayment plan. As long as you stay current on the repayment plan, you can avoid foreclosure and keep your home.
• Managing Tax Debts: If you owe back taxes, Chapter 13 bankruptcy can be a powerful tool for managing this debt. Certain tax debts may be classified as priority debts, meaning they must be repaid in full through the repayment plan. However, your plan will allow you to stretch these payments over several years, providing breathing room and preventing tax liens or levies.
• Addressing Domestic Support Obligations: Child support and alimony are priority debts that cannot be discharged in bankruptcy. However, your repayment plan may allow you to pay off any past-due amounts by including them in your repayment plan.
• Protection from Creditors: Once you file for bankruptcy, creditors will be prohibited from taking collection actions against you, including wage garnishment, lawsuits, repossession, or harassment. The protection will remain in effect as long as you comply with the terms of your repayment plan, giving you the space you need to focus on rebuilding your finances.
• Consolidation of Debts: By combining different types of debts into one manageable monthly payment, you can simplify your financial obligations and ensure that payments will be distributed fairly among creditors. By working closely with a bankruptcy attorney, you can create a plan that fits your budget and sets you on the path to long-term financial stability.
• Debt Discharge: At the end of your repayment plan, any unsecured debts that remain will be discharged. This means you will not need to repay any outstanding balances, which can free you from significant financial burdens.

Contact Our Bowie, MD Chapter 13 Bankruptcy Attorney

If your family is struggling with debt, you may want to consider Chapter 13 bankruptcy. At The Law Office of Donald L. Bell, we can advise you of your options, and we will work closely with you to achieve long-term financial relief. Get in touch with us by calling 301-614-0535 and scheduling a complimentary consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.