Chapter 13 Bankruptcy
Tax Debt and Foreclosure Defense Attorney
Chapter 13 can do much more than a Chapter 7. If you are sick and tired of IRS harassment and/or living under threats of foreclosure or repossession, filing for chapter 13 bankruptcy might be the best choice you have. Chapter 13 also enables you to keep those assets that the trustee would have taken in a Chapter 7 bankruptcy, provided you pay the value of those non-exempt assets into the plan payments made to unsecured creditors.
How Does Chapter 13 Work?
Unlike Chapter 7, which consists of a short liquidation process capped by a discharge of your debt, Chapter 13 is made up primarily of a payment plan. This payment plan - typically lasting between three and five years - is overseen by a trustee. Shortly after your final payment, your remaining dischargeable debts will be wiped away.
Why Chapter 13?
For many consumers, Chapter 13 is the only debt relief option available due to their inability to qualify for Chapter 7 because of recent changes to the bankruptcy code. For others, Chapter 13 is simply a better fit for their situation. Chapter 13 helps those who have fallen behind on their mortgage, but still want to keep their home, by permitting payment of all mortgage arrears without interest over a period of time through the monthly plan payments. Usually banks will want all mortgage arrears paid at once to forestall a foreclosure, but with a Chapter 13 you force the bank to accept arrears on your schedule while retaining your home.
Chapter 13 helps those with outstanding tax debt several ways (provided you qualify for a discharge and you make all payments in the plan): one, pre-filing tax penalties are considered unsecured debt so you do not fully pay them; two, you usually do not pay interest or penalties on the back taxes you are paying through the Chapter 13 plan; three, you impose your own payment plan on the IRS of FTB for the back taxes you owe. Those with large tax debts derive much benefit from a Chapter 13 because of not paying most penalties and avoiding most of the interest on those taxes when the interest would have had to be paid through a payment pay with the respective taxing agencies. For more on dealing with taxes please see Tax Debt & Bankruptcy.
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Contact a Petaluma Chapter 13 Bankruptcy Lawyer
I am attorney Andrew Kern. If you are considering bankruptcy, I stand by the philosophy that I am here to help, not here to judge. To discuss your situation with me in a free consultation, contact me online or call 707-658-4602. My office is conveniently located near Highway 101 in Petaluma.
I am a debt relief attorney. I help people file for bankruptcy relief under the Bankruptcy Code.