Seattle residents who want to turn over a new financial leaf but who don’t qualify for Chapter 7 bankruptcy may want to consider filing for Chapter 13 bankruptcy. Filing for Chapter 13 debt relief can be a viable alternative to losing one’s home to foreclosure.
Chapter 13 bankruptcy requires that debtors submit to the court a proposed repayment plan. The court allows reasonable monthly expenses to be deducted from debtors’ wages and then determines what remaining amount will go toward paying off outstanding debts.
Child support arrearages and back taxes must be paid in full. Medical bills, credit card and other unsecured debts are generally partially paid. Some unsecured debts can be resolved by debtors paying as little as 10 cents on every dollar.
The repayment plan must meet all of the below requirements:
— It must be delivered in good faith.
— Unsecured creditors have to be repaid at least as much as they would be if the debtor filed for Chapter 7 bankruptcy, usually the total value of all the debtor’s nonexempt property.
— All of the debtor’s disposable income has to be paid into the plan for a minimum of three years, but five years can be used to meet the second requirement.
At the Law Office of Ruth Nelson, we can assist you with clearing your debts and ending harassment from creditors. Filing for Chapter 13 stops the clock on additional penalties and interests accruing on your debt so you can get out from under that mountain.
Contact our office to start 2015 off on the right financial foot.