Chapter 13 bankruptcy is otherwise known as "wage-earner bankruptcy" or a "debt reorganization." In a Chapter 13, all property of the debtor may be kept. The debtor is required to make monthly payments to a Trustee for a period of three to five years and to pay to the Trustee any tax refunds received totalling over $1000 for a three year period.
After the debtor has met these obligations, the debtor receives the discharge of his or her debts.
Bankruptcy laws are highly complex. However, usually debtors file Chapter 13 cases for one of the following reasons:
First, a debtor may have already filed for bankruptcy in a Chapter 7 or a Chapter 13 case, in which the debtor received a discharge of his or her debts. This precludes the debtor from receiving another discharge in a Chapter 7 case for a certain period of time.
Second, a debtor and his or her spouse may jointly earn more than the applicable Utah median income for their family size. In this scenario, a debtor is generally prohibited from filing a Chapter 7 case. This limitation is called the "means test."
Third, a debtor may be irreparably behind on his or her home mortgage payments, facing an impending foreclosure. A Chapter 13 enables a debtor to keep his or her home, making payments for the amount in default through the Chapter 13 payment plan and at the same time making ongoing regular house payments directly to the mortgage lender. To keep a home or other secured debt asset in a Chapter 7 bankruptcy case, a debtor generally must be completely current on his or her loan for the property when the case is filed and must also continue making payments on time until the original loan obligation for the home or vehicle is completely fulfilled.
Fourth, a debtor may have too much equity in his or her home to keep the home if the debtor were to file for Chapter 7 relief.
In all of these scenarios, and in a few others, it makes sense to file a Chapter 13 bankruptcy case, rather than a Chapter 7 bankruptcy case.
Bankruptcy is highly complex. If you have any questions or would like to schedule a free one-on-one consultation regarding your options, contact us to schedule a free appoinment: (801) 850-8125. Help is just a phone call away.
As long as you fulfill your obligations under your confirmed Chapter 13 plan and do not take on any new debts after your case is filed, your case filing will permanently stop garnishments, repossessions, lawsuits, judgments, foreclosures, and creditor harassment. At the same time, your home, your car, your income, your furniture, and your other property will be protected from your creditors.
Call Our Offices Today for Your Free Consultation: (801) 850-8125
Salt Lake County Location (Main Office):
The Law Offices of Laura Ferrin
A Professional Law Corporation
9130 S. State Street
Salt Lake City, Utah 84070-2645
Utah County Location:
The Law Offices of Laura Ferrin
A Professional Law Corporation
2975 Executive Parkway
Lehi, Utah 84043
The Salt Lake City, Utah, based Law Offices of Laura Ferrin, A Professional Law Corporation, provides comprehensive debt relief services to clients throughout the counties of Salt Lake, Summit, Tooele, Utah, Davis, Weber, Box Elder, Daggett, Cache, Morgan, Rich, Carbon, Duchesne, Emery, Grand, Juab, Millard, San Juan, Sanpete, Sevier, Uintah, Wasatch, including the communities of Salt Lake City, Murray, Sandy, Draper, Riverton, Midvale, Cottonwood Heights, West Jordan, South Jordan, Holladay, West Valley City, Taylorsville, Bountiful, North Salt Lake, Farmington, Layton, Kaysville, Clearfield, Syracuse, Roy, Ogden, Park City, Provo, Orem, Lehi, Spanish Fork, Mapleton, and American Fork.
We are a Utah debt relief agency. We help people file for bankruptcy protection under federal bankruptcy laws.
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