Many of our clients find a Chapter 13 bankruptcy filing is by far the most powerful and effective strategy for a person struggling with non-cooperative creditors.
Chapter 13 isn’t even really “bankruptcy” in the traditional sense of the word but is more of a “Wage Earner’s Repayment Plan.”
In order to qualify a client for chapter 13 we only need to show the client has minimal income after the payment of secured debts (mortgages, car payments, etc.) and basic lifestyle needs ( food, utilities, etc.). The payment to unsecured creditors can be as little as $20 a month and still qualify.
Further good news is that you don’t have to figure this all out on your own. Kerry Hettinger, PLC works with you to create a repayment plan that saves you the most money possible.
Among the most common reasons for filing a Chapter 13 rather than a Chapter 7 (full bankruptcy) are the following:
1. Ch 7 would result in loss of something one really needs to keep (house, car, business, farm, etc.).
2. Client makes too much money to file a Ch 7 but not enough to pay off their debt.
3. Client filed a Ch 7 less than 8 years ago (only 4 years for a Ch 13).
4. Certain debt not dischargeable in a Ch 7 can be discharged or managed much better in a Ch 13 (tax, student loan, fraud, etc.).
Because of the many advantages of a Chapter 13 over other ways to deal with debt, Congress created additional qualification tests. The two primary tests have to do with who can file a Chapter 13 and how much debt they can have. First, only a person can file a chapter 13 (no Corps or LLCs). Second, because it is inexpensive to file and very convenient, a Chapter 13 Debtor can only have so much debt ($360,475 unsecured, $1,081,400 secured).
Call today to have any questions answered and see if you qualify for this powerful form of debt management.