Category Archives: Chapter 13 Bankruptcy

Chapter 13 bankruptcy creates a three to five year repayment plan. This gives the debtor the opportunity to reorganize and pay back a portion or all of their debt over time. However, three to five years is a lengthily commitment. While in Chapter 13 bankruptcy you must make an agreed upon monthly plan payment to the bankruptcy trustee and you must ask the bankruptcy court permission to take on new debt while in a Chapter 13.

Can I Purchase a Car While in Chapter 13 Bankruptcy?

You can buy a car while in Chapter 13, with court approval, to provide needed transportation. So long as you meet certain criteria, the court is likely to approve your request for permission to purchase a car during the life of your bankruptcy case.

Because of the length of Chapter 13 bankruptcy cases, it is not uncommon that a debtor’s vehicle will need to be replaced. Perhaps an aging vehicle requires repairs that would cost more than it is worth, or the previous vehicle was totaled in an accident. Things happen, and the bankruptcy court understands this.

If you are in Chapter 13 bankruptcy and find you need to purchase another car, do the following:

• Shop around for a vehicle. Consider used cars (but new to you!) are often a better deal and less expensive than a brand new car. Look around to see what you can get for a payment you can afford.
  • In our bankruptcy law practice, we have had the Chapter 13 Trustee approve car loans in amounts ranging from $150 per month to $450 per month.
  • Be mindful that your new car payment will be paid outside of the plan and made directly to the lender. It is critical that you only take on a monthly payment that you can afford, while still making your monthly plan payments.
  • There are lenders who will approve car loans to debtors while in bankruptcy, but they may not want to work with you until you have permission from the court. However, it is important to have a clear idea of what you can buy with a monthly payment you can afford. Plus, you need to know if you will need a down payment, and if so, how much.
• Once you have done the research and preliminary shopping, gather current paystubs (for you and your spouse if you are married) and prepare a realistic budget to ensure you can afford to add a car payment to your present budget.
• After careful review of your budget, schedule an appointment with your bankruptcy attorney so that the proper paperwork can be filed with the court to ask permission to incur new debt.
  • Understand that if the court approves your request, you must provide the trustee with proof of purchase within 45 days of approval.
  • If you do not follow through with the purchase once approved, your Chapter 13 plan payment will be increased by the amount you would have paid toward the car payment, as your budget demonstrating the monthly payment you could afford is then considered additional disposable monthly income.

The Benefits of Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a powerful tool that can help you save your house, catch up on missed payments, and eliminate unsecured debts, like credit card debt. It requires a three to five year commitment to a monthly payment, but the benefits are vast. We are here to help you understand the process and decide if filing for relief under Chapter 13 is the right choice for you and your family.

Contact us today to schedule a free consultation.

The Law Offices of Barbara B. Braziel proudly serves Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City, GA.

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

Chapter 13 bankruptcy is a powerful legal tool that offers a number of advantages to a debtor. Under this chapter you can  catch up on mortgage arrears, missed car payments, back taxes, and other debts.

To obtain the benefits of Chapter 13, there are a number of things you must do during the course of your bankruptcy. So long as you do the things required of you in a Chapter 13 bankruptcy you can get all of the benefits. The following are four things that you must do. While this list is not exhaustive, it covers the basic requirements.

Make your plan payments.

Chapter 13 bankruptcy creates a three to five year repayment plan. You must make your plan payment on-time every month.

File your personal income tax return on time.

While you are in Chapter 13 bankruptcy you have a duty to file your personal income tax returns on time. Also, if you are entitled to a tax refund most Chapter 13 plans require you to turn that refund over to the Bankruptcy Trustee to distribute to your creditors.

Avoid taking on new debt.

You are precluded from incurring new debt while you are in Chapter 13 bankruptcy. If you do need to take on new debt, like getting a loan because you truly need a new car, then you must ask permission from the Bankruptcy Court. So long as you can show a genuine need and purpose for incurring new debt, the Court may approve.

Be transparent about your finances.

In any bankruptcy filing you have a duty to be transparent about your finances. This includes your income and expenses. While it may feel vulnerable to be transparent about your finances, the trade-offs are the vast benefits of bankruptcy.

The Benefits of Chapter 13 Bankruptcy

• Stops wage garnishments, stops lawsuits filed by creditors, stops harassing creditor phone calls, and stops automobile repossession.
• Can stop foreclosure and allow a homeowner to catch up on mortgage arrears.
• In some cases, allows a homeowner to “lien strip” or eliminate a second mortgage.
• Creates an opportunity to catch up on missed car payments.
• Creates an opportunity to catch up on other missed payments, such as back taxes or child support payments.
• At the conclusion of the Bankruptcy, any remaining credit card debt, medical bills, or other unsecured debts, and certain tax debts, are discharged.

Filing for Chapter 13 Bankruptcy

It is our mission to ensure that you understand the power and benefits of Chapter 13 bankruptcy. We’re here to answer all of your questions. Call us right now (912) 351-9000 to schedule a free consultation.

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We proudly serve the people of Savanna, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.

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

If you are considering Chapter 13 bankruptcy, or have already decided to file, it is important that you understand the bankruptcy process and what to expect. We’ve put together this Survival Guide to Filing Chapter 13 Bankruptcy so you can have an overview of the entire process.

Quick Overview of Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization of debts that creates a three to five year repayment plan and allows debtors to keep most or all of their belongings.

Benefits of Chapter 13 Bankruptcy

• Stops wage garnishments, stops lawsuits filed by creditors, stops harassing creditor phone calls, and stops automobile repossession.
• At the conclusion of the Bankruptcy, remaining credit card debt, medical bills, or other unsecured debts, and some tax debts, are discharged (erased).
• Stops all collection action.
• Can stop foreclosure and allow a homeowner to catch up on mortgage arrears.
• In some cases, allows a homeowner to “lien strip” or eliminate a second mortgage.
• Creates an opportunity to catch up on missed car payments.
• Creates an opportunity to catch up on other missed payments, such as back taxes or child support payments.

 The Chapter 13 Bankruptcy Plan

When you file for Chapter 13 bankruptcy you will also file a proposed repayment plan. It lays out what debts will be paid back in the plan, to which creditors, and what your proposed monthly plan payment amount will be. Chapter 13 bankruptcy plans must be approved by the Bankruptcy Trustee and the Bankruptcy Court.

Once approved, you will make monthly plan payments to the Bankruptcy Trustee. He or she will then distribute those payments to your creditors being paid in the plan. The plan will pay back either all or a portion of your debts over the life of the plan. Some debts must be paid 100%, while other debts, such as credit card debts, may be partially paid back or not paid back at all.

Your monthly play payment amount is based on your monthly disposable income. Each Chapter 13 plan is case specific, so without sitting down and fully reviewing your situation, we cannot predict what your monthly plan payment amount would be.

For your Chapter 13 bankruptcy case to be successful, it is critical that you pay your plan payment on time, every month. We invite you to learn more in our article Chapter 13 Keys to Success.

The Process of Filing for Chapter 13 Bankruptcy

Meeting For A Free Consultation

First, come meet with us for a free consultation. Together we’ll review your debt relief options and explore if Chapter 13 bankruptcy is the right choice for you and your family.

Preparing the Bankruptcy Petition and Plan

Prior to filing for bankruptcy it is necessary to gather the necessary documents, prepare the bankruptcy petition, the Chapter 13 Plan, and complete a Credit Counseling course.

When you work with The Law Office of Barbara B. Braziel, we will prepare your bankruptcy petition. Then we will review it together to make sure that it is complete and accurate to the best of your knowledge. Bankruptcy is a complex area of law, and bankruptcy petitions are filed under the penalty of perjury.

File with the Bankruptcy Court

Once your bankruptcy petition and proposed plan are complete, we will file them with the Bankruptcy Court on your behalf.

As soon as your case is filed the Automatic Stay immediately takes effect. This means that all of your creditors must stop all collection action. The Automatic Stay stops foreclosure proceedings and repossessions, stops wage garnishments and bank levies, and puts an end to collection phone calls.

Attend the Meeting of Creditors

You must attend a Meeting of Creditors, also known as a 341 Hearing, approximately one month after filing for bankruptcy. The meeting is conducted by the Chapter 13 Bankruptcy Trustee assigned to your case. At this meeting the Trustee will ask you questions under penalty of perjury and may ask you questions about your proposed plan. When you hire us to file your bankruptcy case, we will prepare you for the meeting and we will be sitting by your side at the table.

Get the Fresh Financial Start You Deserve

Filing for bankruptcy can give you a fresh financial start. It can be your chance to get your financial life in order. Once you are out from under the burdensome weight of debt, you are empowered to make wise financial decisions for your future.

We Will Help You Through Your Chapter 13 From Start to Finish

It is our mission to ensure that you understand the power and benefits of Chapter 13 bankruptcy. Filing for bankruptcy is a serious financial decision. If you are feeling apprehension about the process, we understand. Know that if you hire us to file your bankruptcy case, we will be by your side from start to finish. We will prepare your bankruptcy petition and Chapter 13 plan, file it with the court, and assist you until you receive your Bankruptcy Discharge Order.

Contact us to explore how bankruptcy can help you! We offer free consultations to anyone looking to explore how to get out of debt.

Reach out to us by email at info@BrazielLaw.com or call (912) 351-9000. 

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

There are two main chapters of bankruptcy that individuals file: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Which chapter is right for you is specific to your situation. For an overview of the primary differences between the chapters, read our article The Differences Between Chapter 7 and Chapter 13 Bankruptcy.

Chapter 13 Repayment Plan

Chapter 13 bankruptcy creates a repayment plan that lasts three to five years, depending on your specific situation. This means that a Chapter 13 debtor will be in bankruptcy for the length of the plan payments. In general, debtors who have income that falls below the median income for our state, adjusted for household size, will have a three year plan. Debtors who have income above the state median, adjusted for household size, will have a five year plan.

The Chapter 13 bankruptcy plan must be approved by the Bankruptcy Trustee and the Bankruptcy Court. It requires monthly payments to the Bankruptcy Trustee for the duration of the plan. The Trustee then makes pro-rata payments to your creditors who are supposed to be paid through the plan.

To qualify for Chapter 13, you must have a steady source of income, such as from a job, self-employment, a business, retirement income, or social security.

Amount of the Plan Payments

Chapter 13 plans vary greatly depending on the specifics of the case. Some plans pay back 100% of debts owed, while others pay nothing or only a percentage to general unsecured creditors (credit cards, medical debts).

The amount of your plan payment is determined by the proper calculation of your disposable income, the total of your priority debts (those that must be paid back through the plan), and any value you may have in non-exempt assets. Chapter 13 plans are complex and case specific. Please feel free to meet with us for a free consultation so that together we can review your situation and determine what your monthly plan payment may be.

Benefits of Chapter 13

Some of the Chapter 13 benefits include:

• Stops foreclosure, vehicle repossession, wage garnishments, stops lawsuits filed by creditors, and stops harassing creditor phone calls.

• At the conclusion of the Bankruptcy, remaining credit card debt, medical bills, or other unsecured debts, and some tax debts, are discharged (erased).

• Stops all collection action.
• Can stop foreclosure and allow a homeowner to catch up on mortgage arrears.

• In some cases, allows a homeowner to “lien strip” or eliminate a second mortgage.
• Creates an opportunity to catch up on missed car payments.
• Creates an opportunity to catch up on other missed payments, such as back taxes or child support payments.

We are here to help you understand the process and decide if filing for relief under Chapter 13 is the right choice for you and your family. Contact us today (912) 351-9000 to schedule a free consultation.

The Law Offices of Barbara B. Braziel proudly serves Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City, GA.

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

A Chapter 13 bankruptcy gives you the opportunity to remove junior liens on your home. These could be liens securing a line of credit or a home equity loan. However, the liens can only be voided if certain requirements are met.

When Junior Liens Can Be Stripped

“Stripping” a lien means that the lien is removed, converting a secured debt into an unsecured debt. Unsecured debtors generally receive pennies on the dollar in bankruptcy, while secured debtors are protected by their security interests.

A lien can be stripped if there is no equity for it to attach to. This will be the case if you owe more on your mortgage than the fair market value of your home. For example, you have $250,000 first mortgage and a $40,000 home equity loan, but your home’s fair market value is only $200,000. If your home is foreclosed upon, your first mortgage lender would receive the entire proceeds of the sale, and nothing would be left over for the junior lienholder.

In this case, your junior lien could be stripped, since they are wholly unsecured.

Not All Liens Can Be Stripped

Liens can only be stripped in certain situations. First, lien must be wholly unsecured. You can’t strip a lien on your primary residence if it is partially unsecured.

For other types of property, such as car loans or investment property mortgages, you can cramdown the lien to the current value of the collateral. This works in situations where there is some value for the lien to attach to, but less value the current amount of the lien.

The cramdown isn’t permitted for a mortgage on a primary residence. It’s an all-or-nothing situation, where the lien can be stripped if there is no value to attach to, but cannot be crammed down if there is some value leftover.

If you are able to strip your lien, it will only be officially removed once you have completed your three to five year repayment plan. If you miss payments without receiving a modification of your plan, you may risk losing your opportunity to have the lien stripped, and the junior lienholder will retain the full amount of their security interest.

We’re here to help you through your bankruptcy case from start to finish. Contact us or call (912) 351-9000 to schedule a free consultation. Together we will explore how bankruptcy can help you.

For over 35-years we have proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.

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