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Chapter 13 Bankruptcy Lawyer

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A Chapter 13 bankruptcy is a form of repayment of debt to your creditors. At Banik & Renner we carefully review your eligibility for a Chapter 13 to assure that it is the proper choice for your debt situation.  Whether or not all of your creditors are repaid in the course of the Chapter 13 is determined by a formula called a means test. ( The means test takes into consideration your family income, family size, and applies standardized deductions for taxes, mortgage or rent, utilities, health care, food and the like. The net result of the means test is a number representing your “disposable income” which then is used to calculate the amount you must repay to your unsecured creditors.

Once the amount required to be repaid to your creditors has been calculated, your bankruptcy attorney will create a plan for repayment and review it with you. The plan is filed with the court along with the bankruptcy schedules.  A meeting called a “341 Hearing” is held and you and your bankruptcy attorney will meet with the bankruptcy Trustee.  The Trustee will review the plan and usually will require additional information to determine the feasibility of the plan.  Once the Trustee approves the plan the court will then confirm the plan.

The plan payments are usually withdrawn from your paycheck whether weekly or bi-weekly and the Trustee distributes payment according to the terms of your confirmed bankruptcy plan.

A Chapter 13 is typically used when:

  • A debtor has more income than allowed to file a Chapter 7, yet is unable to pay ordinary living expenses and other creditors
  • A debtor has gotten behind on mortgage payments or other secured debts and wants to avoid losing the home or vehicle
  • A debtor has lost a job due to accident or illness but is again employed and needs to reorganize debt incurred during the period of no income
  • A debtor has made the choice to pay credit card debt before paying the mortgage or car payment and is too far behind to catch up
  • A debtor filed a prior bankruptcy and cannot yet file another Chapter 7
Regardless of the cause, a Chapter 13 is most often used to stop a mortgage foreclosure or re-possession of a vehicle.  The amount you are behind, called the “arrearage” is repaid over the life of the bankruptcy plan and if plan payments are met, the creditor cannot foreclose or repossess collateral.  Most clients find that once the bankruptcy plan is in place, the stress of multiple creditors constantly harassing them is replaced with the ability to sleep at night, answer the phone without fear of a threat for payment, and a sense of hope that there is a way forward.

Understand the benefits and protections you are entitled to under the law.  KNOWLEDGE IS POWER.

Why choose Banik & Renner?

  • Individualized service with no assembly line representation
  • The lawyer you meet with is the lawyer who represents you
  • We are local attorneys who have practiced in the community since graduation from Notre Dame Law School three decades ago
  • We attend seminars and remain current in our areas of practice
  • We ask questions and we really listen to your answers to help you
  • We will not “hard sell” you on our representation
  • We explain your options in words you can understand or keep trying until you do
  • We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code

What do I need to do before meeting with an Attorney?

  • Write down who you owe money to and how much you owe each creditor
  • Write down your monthly expenses
  • Bring your last three (3) pay stubs to your appointment
  • If you own a home, bring your most recent tax assessment and mortgage statement

How do I contact Banik & Renner?

Click here to contact us or call 574.293.7170 for more information or to schedule a FREE CONSULTATION

Bankruptcy Frequently Asked Questions

Does my spouse have to file for bankruptcy if I do?
No. However, keep in mind that if you and your spouse are both liable on a debt, your non-filing spouse will remain liable on the debt.  So, if the non-filing spouse is only liable on a small amount of joint debt, he or she may choose not to file so as to avoid having a bankruptcy on his or her credit report.

Can my boyfriend, girlfriend, significant other or domestic partner and I file for bankruptcy together?
No.  Only legally married couples can file a joint bankruptcy.  If you have joint debts, the non-filing individual will remain liable on the joint debt.  If both of you have significant debt, together or separately, you would both have to file separate bankruptcies.

How long will I have bad credit after filing a bankruptcy?
That is largely up to you. If following the discharge of your debt you are able to avoid negative reports on your credit report, your credit may begin to improve within a year.  Generally, most lenders require good credit for 3 years following the filing of a bankruptcy.

If I file bankruptcy will my wage garnishment stop?
Yes. Your employer must receive notice of the filing of your bankruptcy and the creditor must also receive notice in order to stop the garnishment.  Your bankruptcy must be filed with the court to stop the garnishment. It is not sufficient to notify the creditor that you intend to file bankruptcy.

How soon will the creditors stop bothering me after I file for bankruptcy?
An automatic stay goes into effect when your bankruptcy is filed.  Once a creditor receives that notice from the bankruptcy court the creditor must stop calling you, sending out collection notices and of course, must stop any court actions including garnishments.

Chapter 13 Frequently Asked Questions

If I have to pay back debt in a Chapter 13 why shouldn’t I just enter into a debt repayment plan with a debt consolidation company?
In a Chapter 13 most debtors are not required to repay all of their unsecured debt compared to a debt consolidation plan where all of the creditors must be paid in full.  In a Chapter 13, any debt that is not repaid is discharged and you pay no taxes on the debt that was discharged. In a debt consolidation plan “debt forgiveness” will result in the creditor sending you an IRS Form 1099 for the amount of the debt that you did not repay.

How many years does a Chapter 13 last?
Most Chapter 13 plans are 5 year plans.  In some instances where there is little debt or the debtor is a high wage earner, 3 year plans are possible.

Click here to contact Attorneys at law, Banik and Renner or call 574.293.7170 to learn more about filing for bankuptcy.


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