Salem Chapter 13 Bankruptcy Lawyer

What Is Chapter 13 Bankruptcy?

When you file for Chapter 13, you submit a repayment plan to the court. If the court approves this proposal, you must adhere to it over a period of three to five years; when it’s complete, any remaining eligible debts will be discharged.

Once you’ve successfully filed for Chapter 13, an automatic stay goes into effect. This means your creditors cannot legally pursue you for the money you owe them.

If you have a regular income and you’re in danger of losing your home, car, or other essential assets, this may be the best option for you. To discuss your particular situation in more detail, you should get in contact with a Salem Chapter 13 bankruptcy attorney and schedule a free initial consultation.

Key Benefits of Chapter 13 Bankruptcy

• Asset protection: Chapter 13 lets you keep your home, car, and other valuable possessions.
• Debt consolidation: Instead of dealing with multiple creditors, you make a single monthly payment to a bankruptcy trustee who distributes funds to creditors. This makes it easier to keep track of your payments and avoids costly charges that may arise from late payment in certain cases.
• Automatic stay protection: Once you file, creditors must stop collection efforts, including wage garnishments and harassing phone calls.

How Chapter 13 Bankruptcy Works

Filing for Chapter 13 bankruptcy is far from straightforward; there are a number of steps you’ll need to undergo before your repayment plan even receives court approval. This is one reason why it’s important to hire a Massachusetts Chapter 13 bankruptcy lawyer. Your attorney will ensure each phase of the process is handled correctly to avoid unnecessary delays or complications.

Filing Your Petition

The process begins with filing a bankruptcy petition in the U.S. Bankruptcy Court for the District of Massachusetts (bankruptcy proceedings are handled by the federal court system). This petition includes detailed financial information, including:

• Your income, expenses, and assets
• A list of creditors and the amounts owed
• A proposed repayment plan.

Your attorney will work with you to prepare and file these documents, ensuring that everything complies with bankruptcy laws and court requirements.

Creating a Repayment Plan

You must set out, in detail, how you plan to pay your debts over the course of your repayment period. If the court does not view your plan as feasible and likely to meet your obligations to your creditors, it will reject your application.

Priority debts, such as taxes and child support, must be paid in full. Secured debts, like mortgages and car loans, will be addressed in a way that allows you to keep your assets. Unsecured debts, such as credit card balances, may require only partial payment, depending on your circumstances. An experienced bankruptcy lawyer will be able to shed more light on how this might work in your case.

Court Approval and Trustee Oversight

If you succeed with your petition, the court will assign a trustee to oversee your case. You’ll attend a meeting with creditors where the trustee and any creditors present can ask questions about your financial situation and repayment plan. Once the court approves your plan, you’ll begin making payments according to its terms.

Completing the Plan

As long as you make all required payments, any remaining eligible debts will be discharged (permanently eliminated) at the end of your repayment period.

Chapter 13 vs. Chapter 7: Which Is Right for You?

While the choice between Chapter 7 and Chapter 13 depends on individual circumstances, many people opt for Chapter 7 as it involves an immediate discharge of debt if successful. However, you must pass a means test to qualify for Chapter 7; if your income is too high, it won’t be an option for you.

Your attorney will help you weigh the pros and cons of each option based on your specific needs.

Why You Need a Salem Chapter 13 Bankruptcy Lawyer

The bankruptcy process is complex, and even small mistakes in your paperwork can cause significant delays or result in a dismissal of your case. A knowledgeable attorney can make all the difference by:

• Explaining your options
• Customizing your repayment plan
• Handling creditor communications
• Representing you in court.

What Happens If You Miss a Payment?

One late payment won’t result in the immediate forfeiture of your Chapter 13 plan. As long as you can explain the situation to your bankruptcy trustee and quickly catch up on the payment you missed, there may be no negative consequences.

However, if you fall significantly behind in your repayment schedule, your plan might then be in jeopardy. If your trustee sees fit, they may file a motion to dismiss for material default. If this motion goes through, your plan will be cancelled, your automatic stay will be revoked, and you’ll no longer be on track to have your debts discharged.

If your circumstances have changed and your Chapter 13 plan is now untenable, you may be able to apply to the court to change it. The court may update the terms of your plan or switch you to Chapter 7 if you satisfy the terms of the means test.

If you think you might struggle to keep up with your Chapter 13 plan, it’s a good idea to get ahead of the problem if possible. Speak to your Chapter 13 bankruptcy lawyer in Massachusetts about how you might be able to stick with the repayment schedule or petition for a new one.

Frequently Asked Questions (FAQs)

What is wage garnishment?

If you fail to repay your debts, your creditors may apply to the court for your wages to be garnished to repay what you owe. This means that a portion of your paycheck is withheld by your employer and redirected to your creditors. You may be able to avoid this situation by filing for Chapter 13 bankruptcy.

Can I include tax debts in my repayment plan?

Yes, certain tax debts can be included in your Chapter 13 repayment plan. However, unlike some forms of unsecured debt, taxes must generally be repaid in full regardless of your bankruptcy status.

Will filing for bankruptcy ruin my credit forever?

Bankruptcy will negatively impact your credit score for several years; during this period, it may be difficult to secure a loan. However, many of our clients have rebuilt their credit over time with responsible financial behavior.

How does bankruptcy affect cosigned loans?

In bankruptcy, cosigned loans may leave the cosigner responsible for the debt unless they are protected under the repayment plan.

A Salem Chapter 13 Bankruptcy Lawyer You Can Trust

Filing for Chapter 13 bankruptcy can be a scary process. However, if your debts have become unmanageable, it may be the quickest route back to prosperity for you and your family. Plus, it will allow you to stay in your home and keep other important assets as well.

To learn whether Chapter 13 might be a viable option for you, get in touch with our Massachusetts bankruptcy lawyers today. You can reach us via the contact form on this website or by calling (978) 744-8818. We’ll give you the advice you need to hear, not the advice you want to hear.

ATTORNEY MONIQUE B. LAMB

Since founding the practice on January 4, 1999, Monique has dedicated her career to family law, providing clients with compassionate yet practical guidance through some of life’s most challenging moments. With over two decades of experience, she understands the complexities and emotional toll of family law cases and focuses on achieving resolutions while minimizing unnecessary conflict. [ ATTORNEY BIO ]