The primary goal of a Chapter 13 bankruptcy is to consolidate your debts and set up a manageable monthly payment. The plan is developed by undertaking an in-depth analysis of your current income, your current monthly expenditures, and your current debts. Chapter 13 bankruptcies are also often referred to as a "debt consolidation", or the "wage earners plan".
A Washington Chapter 13 bankruptcy plan is specifically designed to allow you to stop foreclosures and repossessions while allowing you to make up the back payments in a 36 to 60 month plan. In a Chapter 13, we can also consolidate other bills, such as your car payment, whereby you only pay the value of the car, and not the loan balance. Other debt that can be consolidated includes tax debts, student loans, and child support or alimony arrears.
A Plan for People Who Earn A Good Income but Simply Cannot Keep up with their Mortgage Payments?
In today's economy, many people find themselves in an extremely precarious financial state. Many people earn a good living. But they are barely living month to month while falling increasingly behind on their monthly bills. If, despite your good job or higher than average income, you are still drowning in debt and see no way out, then a Washington Chapter 13 may be your best option to make a financial recovery. A Washington State Chapter 13 bankruptcy may also allow you to keep your house and car in spite of being unable to meet your current monthly mortgage or car loan payments.
The process of filing a Chapter 13 bankruptcy is considerably more complex than a Chapter 7 here in Washington State. In addition to the voluntary petition and related documents, filing a Chapter 13 also requires submission of a specific repayment plan that presents a feasible and plausible payment schedule. This repayment plan must specifically detail how you intend to make your monthly payments to the Trustee. In addition to the 341 meeting of creditors, you will also be required to attend another mandatory hearing, which is called a "confirmation hearing".
At your confirmation hearing, your case goes before a bankruptcy Judge for final review and approval. Typically, it is not necessary for you to attend the confirmation hearing. We are able to simply appear on your behalf. Prior to the confirmation hearing, it is not uncommon for creditors to file objections to your plan if they have issues or concerns with your proposed repayment plan. In a number of cases, this requires that we respond to their specific objections on your behalf.
In nearly all cases, however, we are able to get your plan confirmed by the Judge at the initial confirmation hearing if you are current with your Chapter 13 payments to the Trustee, any amendments requested by the Trustee have been filed, and any objections filed by your creditors have been properly addressed and resolved.
Once your plan has been confirmed, all you have to do is make all your monthly payments under the proposed Chapter 13 repayment plan, and you will receive your discharge. There are frequently a number of motions filed by creditors, the Trustee, and by us as attorney, during a Chapter 13 case. Chapter 13 bankruptcies are quite complex and it is highly recommended that you not attempt to proceed without an experienced Washington State bankruptcy attorney.
Reduce or Eliminate Interest on Consumer Debt
Unfortunately, certain kinds of debt simply cannot be eliminated through a Washington State Chapter 13 bankruptcy. These include child support, student loans and most income taxes. Once you consumer debt is under control, however, and your outstanding interest is lowered or eliminated, many people find that a Chapter 13 repayment plan is reasonable and feasible.