Chapter 13 Bankruptcy

Protect Your Assets With Chapter 13 Bankruptcy

In many cases, Chapter 13 bankruptcy protection is the best way to relieve our clients of debt burdens and ensure that their assets are protected.

If you have assets that would be subject to liquidation in Chapter 7 bankruptcy, Chapter 13 bankruptcy may be the best option to get maximum relief from debt while also protecting your assets. A payment plan in Chapter 13 allows you to pay the value of your nonexempt assets over a three- to five-year term instead of having those assets sold.

Furthermore, a Chapter 13 payment plan is optimal if you are behind on your mortgage or car loan and want to save your home or car from foreclosure or repossession. A payment plan gives you the opportunity to maintain your mortgage or loan payments while catching up on the amount you are behind over the course of three to five years.

Chapter 13 Debt Repayment Plans

Often called the "wage earner's plan," Chapter 13 allows for substantial modification and consolidation of all debts that you can afford to repay into a single Chapter 13 payment plan. You are still granted the protection of the automatic stay of bankruptcy, and the level of unsecured debt you are required to pay can be reduced to as low as 1 percent, depending on your ability to pay or your level of nonexempt assets. And, just as in Chapter 7, unpaid balances remaining at the successful conclusion of your case are subject to discharge, including:

  • Credit card debt
  • Medical bills
  • Income tax debt due more than three years prior if returns were filed on time
  • Personal loan debt
  • Pay day loan debt
  • Gambling debt
  • Deficiency claims for surrendered collateral for loans

Chapter 13 also allows you to pay secured debts for items you want to keep. Your ability to modify the terms of the loan are more limited than with unsecured debts, but in many instances, you can obtain a better interest rate, extend or reduce the term to the length of the Chapter 13 payment plan, and even reduce or "cram down" principle on certain debts. Most importantly, you can cure the amount you are behind over a period of up to five years to save a home or vehicle from foreclosure or repossession. If you do not want to keep the item securing the loan, you can elect to surrender the property back to the creditor and the debt will be treated like your other unsecured debts.

Chapter 13 is also a great tool for paying priority debts such as tax debts that are not eligible to be treated like your other general, unsecured debts. When no better form of tax relief is available, Chapter 13 can provide a structured way to pay off such tax debts over time in a way that fits your budget and protects you from levies and other collection efforts by the taxing authorities.

At Sigmon & Henderson, PLLC, our attorneys have been helping people in Gaston County and throughout North Carolina obtain affordable, effective and efficient debt relief through Chapter 13 bankruptcy. We will fully evaluate your entire financial picture before ruling out Chapter 7 bankruptcy and any other debt relief alternatives, but Chapter 13 is often the best way to protect your home, car and other assets.

Contact Sigmon & Henderson, PLLC, to schedule a free initial consultation with an attorney. Call us in Gastonia at 704-269-6374 to discuss the debt relief options and protections our professionals can help you secure.

With a well-prepared Chapter 13 bankruptcy filing, you will be on your way to a fresh financial start, and all communications with your creditors and the Bankruptcy Court will be routed through our office to allow you to focus on reorganizing your budget.

This Chapter 13 payment plan process provided by the Bankruptcy Code can be a great tool for achieving many goals for all of your different debts in one place, including:

  • Dramatically reducing the unsecured debts you must pay
  • Obtaining more favorable terms on certain secured debts
  • Curing arrearages or penalties to stop foreclosure or repossession
  • Stopping and reducing accumulating late fees, penalties and interest
  • Reorganizing and curing tax obligations over time
  • Decelerating your mortgage default process
  • Stripping a second mortgage on property that is already fully encumbered
  • Eliminating other types of liens on property that is already exempt

In effect, Chapter 13 consolidates your debt obligations into an affordable repayment plan and provides you the protections of bankruptcy. You will have one payment each month to make to the bankruptcy trustee, and we will help you budget for life after bankruptcy.

Schedule Your Free Initial Consultation Today

Call us at 704-269-6374 or email us to schedule a free initial consultation with an experienced Chapter 13 bankruptcy lawyer.

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