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 Chapter 7 bankruptcy
 Chapter 13 bankruptcy
 General FAQ's

What is a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy is a court ordered repayment plan that allows an individual, married couple or sole proprietor of a business to pay their debts or a portion of their debt at a reasonable rate over a 3 to 5 year period. The value of all secured property (such as a car), any unpaid mortgage payments and debt such as unpaid taxes or child support are paid through the term of the plan, and all unsecured debt is usually paid on a percentage of the total owed, based on the debtor's ability to pay. If the plan is completed successfully, the remaining balance of the unsecured debt is discharged.

Can I stop a foreclosure of my home by filing a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy will halt foreclosure action against your home and allow the homeowner to pay the missed mortgage payments through a Chapter 13 plan. The Chapter 13 plan allows the homeowner to make up the missed mortgage payments over time and to once again start making regular monthly payments to the bank or finance company. The homeowner can make those payments over a period of three to five years. The Chapter 13 plan often allows for reasonable payments that are affordable to the individual or married couple and saves the home from foreclosure.

Can I stop an automobile repossession by filing a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy proceeding will halt an automobile repossession and allow the consumer to keep the car. The Chapter 13 will require either the single individual or the married couple to fund a repayment plan with sufficient income to make adequate payments for the car. Also, the consumer can modify the purchase agreement and in many cases lower the interest rate and monthly car payments through the Chapter 13 plan.

What effect will a Chapter 13 bankruptcy have on tax liabilities?

A Chapter 13 bankruptcy in many cases will freeze interest and reduce penalties for tax liabilities that can not be eliminated with a Chapter 7 bankruptcy. In some cases, tax liabilities can also be significantly reduced by filing a Chapter 13 bankruptcy as well. This is a complex area of the law. The experienced bankruptcy attorneys at the Hanson Law Office will review your tax liabilities and recommend the best course to reduce or eliminate those debts.