Chapter 13 bankruptcy is designed to give relief to individuals from their creditors and allow them to pay all or part of their debts over time.
This is most often used by individuals who are behind on their house or car payments. It is also used by individuals who have filed Chapter 7 within the past 8 years and therefore are not eligible to file again.
Chapter 13 can stop the foreclosure and sale of a person's house. It can stop the repossession of an auto and, in some cases, it can be used to recover an automobile that has recently been repossessed. It is also a means of protecting anyone who may have co-signed a loan for your.
The process involved in filing a chapter 13 is the same as a chapter 7.
There is a creditor's meeting followed by a confirmation hearing approximately 90 days after filing the case. The main difference is that the Chapter 13 includes a repayment plan that must be approved by the trustee and the bankruptcy court. The plan is initially prepared by your attorney based on the information you provide during the filing process. The plan is subject to modification and negotiation later. The trustee may resist the initial plan as being too long or not feasible. Then your attorney must present his argument for the plan based on the facts of your case. Once a plan is confirmed by the court, the debtor is obligated to make the monthly payments until the plan is complete and the case is discharged.
A chapter 13 can run from three years up to five years.
Plan payments are made to the bankruptcy trustee and the trustee in turn makes payments to the debtor's creditors. Of course the trustee doesn't do this for free, he or she receives a fee of approximately 7%, for every dollar they process. The trustee provides reports indicating funds received from debtors and payments to creditors.
Plan payments begin 30 days from the time of filing, even before the plan is confirmed. However, the trustee doesn't pay any funds out until the plan is confirmed. If the case is dismissed for some reason prior to confirmation, all of the payments made from the time of filing are returned to the debtor. If a debtor doesn't make payments on time, the plan won't be confirmed and the trustee will ask the court to dismiss the case. If that happens, a debtor will lose the protection of the court and be forced to face creditors once again as if the bankruptcy filing never occurred.
A garnishment order or lien on your property has the potential to spin your already difficult situation into a cycle you can't get out of. What is taken from your paycheck leaves you with little money for living expenses, let alone funds to work on the debt increasing against you. This causes you to fall farther behind in your financial situation, and you will also face creditor harassment.
Filing for bankruptcy has the potential to bring much needed relief that you need.
This process will cause the garnishments to stop, giving you the space you need to resume paying your living expenses. For many, this is a significant break in the exhausting pattern of frustration.
Wage Garnishment Attorney
At The Law Offices of Jeffrey S. Harris, we will guide you through the process of deciding if bankruptcy is the best option for you. For many people, it is the chance at relief that they have been hoping for. After months of working with a shrinking amount of money with their employer knowing about the judgment, they have a chance to put a stop to the garnishments.
If bankruptcy is not in your best interests, we are prepared to help you make the adjustments needed to enjoy a more manageable situation. This includes potential negotiation of debt and payment plans.
Contact a Garnishment Attorney
We provide our services at an affordable rate. To arrange a free initial consultation to discuss the details of your loan with a skilled garnishment defense lawyer, please contact our Maywood, Illinois, office today.