A chapter 13 bankruptcy is also called a “wage earner’s” plan. This form of bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts. Under chapter 13, debtors are able to propose a repayment plan to make installment payments to creditors over a period of time. During the repayment time under the plan the law forbids creditors from starting or continuing collection efforts.
Chapter 13 offers individuals a number of advantages over a chapter 7 bankruptcy, otherwise known as a liquidation bankruptcy. Perhaps most significantly, this type of bankruptcy offers individuals an opportunity to save their homes from foreclosure. By filing under chapter 13, individuals can stop foreclosure proceedings and may have the ability to cure delinquent mortgage payments over time. Another advantage of chapter 13 is that it allows individuals to reschedule some secured debts and to extend them over the life of the chapter 13 plan. Doing this may result in lower payments on those debts. One other special provision in a chapter 13 bankruptcy is that it protects third parties who are liable with the debtor on “consumer debts” (i.e. family members on the same credit card). In some instances, this provision protects co-signers in order to ensure that there is true relief being given.
The attorneys at Shumway Van & Hansen are dedicated to helping people get relief from the serious effects of debts that they simply can no longer afford to pay. Our goal is to help you put a stop to the harassment you are receiving from your creditors, as well as consequences such as wage garnishment. Times are hard enough without worrying about who may be taking money directly out of your paycheck. Our attorneys will give you straightforward advice on whether bankruptcy is right for you, and if so, we will guide you through the process.