Hyattsville Chapter 13 Bankruptcy Attorney
Overcoming Debt in Silver Spring, Washington, D.C., and All of Maryland
Debilitating financial difficulties can happen to anyone, often due to circumstances beyond their control. An unexpected injury, a sudden and unexpected loss of income, or some other factor may jeopardize a previously healthy financial situation and send someone into a seemingly endless cycle of debt. If you still have sources of income but cannot keep up with mounting bills, it may be time to consider seeking relief through bankruptcy. Chapter 13 bankruptcy is intended for individuals who can afford to repay some or all of their outstanding obligations. Filing can stop damaging collection actions - including foreclosure - and reorganize your debt into manageable installments.
Our Hyattsville Chapter 13 bankruptcy lawyer has over 20 years of experience specifically handling these types of cases. Our firm has secured relief for hundreds of clients and can leverage our knowledge to provide you with the seasoned guidance you need to make the most of your filing. We regularly use Chapter 13 bankruptcy to stop foreclosure and other imminent collection actions. Our team at The Law Offices of Brian C. Williams will work closely with you to develop a practical repayment plan that effectively reorganizes your debt. We are invested in your success and are committed to helping you retake control of your financial future.
When Should I File For Chapter 13 Bankruptcy?
Consumers will generally file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter 7 bankruptcy can be more advantageous if you have little to no means of repaying your obligations, even if you still have considerable sources of income. You should consider completing the Maryland Means Test to determine whether you are a good candidate for Chapter 7 or Chapter 13 relief.
First, calculate your average current income over the preceding six months. Compare this figure to the average median income for your household size in Maryland. If your current income is less than the median average, you qualify for Chapter 7 bankruptcy. If your current income is greater than the median average, you will next need to determine your current level of disposable income. You can calculate this by subtracting qualifying expenses from your current income. If the resulting number is sufficiently high, you will not be eligible for Chapter 7 relief - but you will likely be a strong candidate for Chapter 13 bankruptcy.
Note that your total debt must not exceed certain thresholds if you wish to file for Chapter 13 bankruptcy. You will need to have less than $419,275 in unsecured debt and less than $1,257,850 in secured debt.
Determining what type of bankruptcy is right for you is not always straightforward. Our Hyattsville Chapter 13 bankruptcy attorney can evaluate your unique circumstances and advise what type of bankruptcy is right for your situation.
The Chapter 13 Bankruptcy Process
Chapter 13 bankruptcy is a "reorganization" bankruptcy. The process involves committing to a payment plan that you will propose to the Bankruptcy Court. You will be expected to make monthly payments to the trustee assigned to your case, who will in turn pay your creditors all or a portion of what is owed.
The size of a Chapter 13 plan's monthly payments is tied to your current disposable income. In other words, you will be required to pay what you can afford to pay, and you will need to adhere to a budget. The good news is that you will not be expected to pay more than what your current financial circumstances allow, even if that means you will not be able to pay off the entirety of your debt.
Chapter 13 bankruptcy is commonly used to avoid or stop foreclosure proceedings. It can be an effective tool if you have fallen seriously behind on your mortgage payments and cannot negotiate feasible arrangements to catch up. Filing before a sale takes place will stop the foreclosure process, and you will be able to cure mortgage arrears over the life of the repayment plan.
A typical Chapter 13 bankruptcy involves the following steps:
Filing of the Bankruptcy Petition. If you are using Chapter 13 bankruptcy to save your home from foreclosure, this step must be completed prior to the date of the scheduled sale. You will need to file your petition for bankruptcy relief with the appropriate Bankruptcy Court. You will then receive relief from the automatic stay, the court order that prevents creditors from initiating or continuing collection actions against you. The automatic stay will stop foreclosure proceedings and stop an impending sale. You will need to continue to make scheduled payments to your secured creditors but can, for now, not worry about missed payments.
Filing of Schedules and Statements of Financial Affairs and Chapter 13 Plan. This step is usually completed at the same time as the filing of the bankruptcy petition. You will need to submit exhaustive documentation of your financial affairs as well as your proposal for your Chapter 13 repayment plan. This plan effectively promises to pay back the money you owe at a rate you can afford. Your plan will last between three and five years.
Payments Begin. You must begin making the monthly payments proposed in your pending Chapter 13 plan once 30 days have passed from your initial petition filing. You must remain current with these payments (as well as payments to secured creditors) for the Bankruptcy Court to approve your plan.
Meeting of Creditors. Approximately two months after your initial petition filing, you will need to appear at a "meeting of creditors." The trustee assigned to your case will ask you general questions about your petition and your proposed plan. Your attorney can accompany you to this meeting and help you respond to questions or issues.
Plan Confirmation Hearing. About three months after you file your petition, a hearing will be held at the appropriate Bankruptcy Court. The Court will review the details of your plan and determine whether to approve or deny it. The automatic stay's protection will remain in effect so long as you continue to make your plan payments.
Discharge. Upon completing all plan payments, you will generally be entitled to a discharge that cancels your obligation to pay certain types of debts that were not paid in full through your Chapter 13 reorganization. This can include any remaining credit card debt, medical debt, personal loans, or unpaid utility bills.
Certain types of debt, including tax debt and mortgage arrears, must be prioritized in your Chapter 13 plan. This can potentially work to your advantage, as you cannot generally discharge these types of priority debts.
If you wish to keep your home, you must cure your mortgage arrears over the course of your plan. By discharging unsecured debts, you should have increased financial resources and flexibility to manage your mortgage payments in the future.
No matter the extent of your financial difficulties, we are determined to provide the personalized and effective representation you deserve. Our Hyattsville Chapter 13 bankruptcy lawyer can help you create a repayment plan that works to save your home and secure the maximum available relief. Our team at The Law Offices of Brian C. Williams understands the nuances of the U.S. Bankruptcy Code and can walk you through what to expect before and after filing.