Chapter 13

Chapter 13 BankruptcyD.C. and Maryland Chapter 13 Bankruptcy Attorney

For those Maryland or D.C. residents who do not qualify for Chapter 7 bankruptcy, Chapter 13 may be an option. Typically called “wage earners bankruptcy” debtors are allowed to repay their debts based on their current income. The debtor in this situation may present to creditors a plan to repay a portion or all of their debt based on their disposable income and net worth.  This  installment plan can last for 36 months up to 60 months (5 years). For those who are facing bankruptcy, the courts will generally allow you to wrap your past-due mortgage and car payments into the plan.

Why you might want to file:

  • Current income and assets exceeds exemptions and expenses
  • To get on track with mortgage and unsecured debt
  • To get on track with car payments

Advantages of filing a chapter 13 include:

  • Stopping Foreclosure and Repossession
  • Pay back some or all debt over a period of time
  • Repayment based on income and net worth
  • Shown on credit report for less time than Chapter 7
  • Debtors have zero contact with creditors throughout the plan
  • Liable third parties are protected
  • Wipe out Second mortgages, tax liens and judgment liens (certain cases)
  • Surrender negative equity car and purchase new car
  • Reduce the amount owed on car and other personal property (certain cases)
  • Dischargeable debts are wiped clear

Debtors make a single payment monthly directly to the chapter 13 trustee assigned to their case.  The trustee in turn uses these monthly payments to satisfy the debtor’s past due accounts.  Once the past due accounts are current the trustee will then use the monthly payments to pay some of the unsecured debt. Debtors may complete their chapter 13 plan in less than 3 to 5 years in certain cases. For those who are facing mounting problems with adjustable rate mortgages, have over-extended their credit or recently returned to the workforce, Chapter 13 may allow them to get back on their feet financially. The Maryland and D.C. chapter 13 attorneys at  Morris LLP can help you determine if Chapter 13 is the right solution to your current financial problems. If you are a resident of Maryland or D.C. and you wish to explore your bankruptcy options, call us today at (301) 731-1000.

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