What are the benefits of a Chapter 13?
Stop a Foreclosure and Save Your Home
- If you are behind on your house payment, you can spread the past due amount out and pay it back gradually while stopping your mortgage company from foreclosing.
- While in a Chapter 13, you are still allowed to pursue a loan modification which may allow you to alter the terms of your mortgage. This can help reduce your monthly payment and bring the loan current while still having the protection of the bankruptcy in case you are not approved.
Stop Wage Garnishments and Bank Levies
- Once your case is filed, the bankruptcy protections, known as the "automatic stay," go into effect and creditors must stop their collection efforts and release any wage garnishments and bank levies. Having these harsh restrictions removed gives you the freedom to bring home a paycheck and operate without creditors controlling your money
Lower the Interest Rate on Your Car Loan and Stop a Repossession
- Are you stuck in a high interest car loan? When you file a Chapter 13 in the Eastern District of Missouri, you pay back that loan over the life of your plan at the court's interest rate, not the rate in your contract.
- As of April 2022, the interest rate is currently 4.75% which can save you thousands of dollars in interest payments.
- Upside down in your loan? If you purchased your car more than two and a half years ago, you can pay back the loan based on the value of the car, not the amount you owe on your loan.
- When you complete your Chapter 13 and receive your discharge, you will own the car free and clear!
End Harassment From Your Creditors
- The automatic stay means ALL collection activity must stop including collection calls and letters.
Pay Back Uncle Sam Without Threat of an Asset Seizure or Wage Garnishment
- Are you worried that the IRS is going to garnish your wages or seize your assets? A Chapter 13 repayment plan allows you to pay back the IRS and state taxing authorities through your plan without threat of them taking adverse action against you.
- Did you know that the Missouri Department of Revenue is not limited to garnishing 10% of your disposable income? They will garnish 35% of your disposable earnings and 100% of all other payments you receive from your employer.
- Some older taxes may even be dischargeable and able to be eliminated without repayment.
Eliminate Credit Card and Medical Debt, Payday Loans, and Court Judgments
- When you complete your Chapter 13 repayment plan, all of these debts are generally wiped out. While there are a very small list of reasons why a debt may not be discharged, in general, when you complete your Chapter 13, you are DEBT FREE!
An experienced bankruptcy lawyer will be able to tell you if you qualify for Chapter 13 bankruptcy as well as how this type of bankruptcy can assist you in freeing yourself from debt.