Burtonsville Chapter 13 Bankruptcy Attorney

Lawyer for Debt Reorganization Under Chapter 13 in Burtonsville, MD

If you and your family are facing financial challenges that have become overwhelming, you will want to understand your legal options for reorganizing or eliminating your debts. Chapter 13 bankruptcy may be the ideal solution that can help you regain control over your financial future. This type of bankruptcy provides a structured way to pay back debts while ensuring that you can keep valuable assets such as your home or your family's vehicles. The Law Office of Donald L. Bell can provide assistance with Chapter 13 bankruptcy in Burtonsville, Maryland, and we are ready to work with you to achieve long-term financial stability for your family.

Benefits Provided by Chapter 13 Bankruptcy

If you have a steady income and the ability to repay some of your debts, you can use Chapter 13 bankruptcy to restructure various debts into a manageable repayment plan. This plan spans three to five years, during which time you will make monthly payments that will be distributed among your creditors. After completing all required payments, unsecured debts that are still outstanding will be discharged, allowing your family to move forward with a fresh financial start.

Chapter 13 may be an option for those who do not qualify for Chapter 7 bankruptcy. It may also be the preferable choice if you are looking to avoid the loss of your assets or property. Some of the most important benefits of reorganizing your debts through Chapter 13 include:

Preventing Foreclosure

One of the most powerful advantages of Chapter 13 bankruptcy is its ability to stop foreclosure proceedings. If you are behind on mortgage payments and at risk of losing your home, filing for bankruptcy will create an automatic stay that will halt a foreclosure or other actions by creditors. You can include the past-due mortgage payments in your Chapter 13 repayment plan, allowing you to catch up over time and keep your home as long as you continue making mortgage payments and complete your repayment plan.

Stopping Repossession

Chapter 13 can also protect your car or other property from repossession. If you have fallen behind on auto loan payments, filing for bankruptcy will stop the repossession process. By including the missed payments in your repayment plan, you can avoid losing your vehicle, which is likely to be essential for work and daily life. You may also be able to use a "cramdown" to reduce the principal on your auto loan based on the depreciation in your vehicle's value.

Managing Secured Debts

Debts that are tied to collateral can be addressed during a Chapter 13 case by restructuring missed payments into the repayment plan. If you are behind on payments, you can catch up on past-due amounts and prevent the loss of the collateral used to secure these debts.

Addressing Priority Debts

When establishing a repayment plan, certain debts will be given higher priority. These debts must be paid in full during the bankruptcy process. Priority debts include:

• Domestic Support: If you have unpaid child support or spousal support, you will be required to fully repay all amounts owed. You can catch up on these payments over the course of your repayment plan, preventing wage garnishment or other collection actions.
• Tax Debts: Back taxes owed to the IRS or to state or local tax agencies are considered priority debts. By repaying these debts through your repayment plan, you can avoid issues such as property tax liens or the seizure of other assets through tax levies. Older tax debts that do not qualify as priority debts may be discharged when you complete the bankruptcy process.

Handling Unsecured Debts

Unsecured debts, such as credit card bills, medical expenses, and personal loans, are not tied to any collateral. They may be paid back in part during your repayment plan, and they can usually be discharged entirely once the bankruptcy process is complete. Unsecured debts are often repaid only after your priority debts and secured debts are addressed.

Considerations When Filing for Chapter 13 Bankruptcy

As you review your options for debt relief, you will need to carefully consider your financial situation, including your income, debts, and long-term goals. Some important factors to keep in mind include:

• Regular Income: Chapter 13 is best suited for people and families with a reliable source of income. Since the bankruptcy plan requires monthly payments, you must demonstrate that you have enough disposable income to cover both your living expenses and your repayment obligations. If your income is irregular or insufficient, Chapter 13 may not be the best option, and you may want to explore other forms of debt relief, such as Chapter 7 bankruptcy.
• Debt Limits: There are limits to the amount of debt that can be included in a Chapter 13 bankruptcy. Secured and unsecured debts must fall below certain thresholds, which are adjusted every few years. If your total debt exceeds these limits, you may not be eligible. It is important to consult with a knowledgeable attorney to determine whether your debt qualifies under the current guidelines.
• Ability to Protect Assets: Chapter 13 bankruptcy can be especially beneficial if you want to protect your home, vehicles, or other assets that are important to your family. If keeping your property is a priority, Chapter 13 can help you prevent foreclosure or repossessions while you work toward paying off some of your debts. If you do not own significant assets and are primarily looking to discharge unsecured debts, Chapter 7 bankruptcy may be a better option.
• Long-Term Financial Relief: Filing for Chapter 13 bankruptcy will not only provide immediate relief by stopping creditor harassment, but it can also set the stage for long-term financial recovery. By creating a realistic repayment plan and eliminating unsecured debt at the end of the bankruptcy process, you can begin taking steps to rebuild your credit and achieve financial stability.

Contact Our Burtonsville, Maryland Chapter 13 Bankruptcy Lawyer

Chapter 13 bankruptcy can provide you with a chance to regain control of your finances and lay the foundation for long-term stability for your family. Contact The Law Office of Donald L. Bell at 301-614-0535 to arrange a free consultation and get the legal help you need to receive relief from your debts.

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