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Why Hire a Chapter 13 Bankruptcy Attorney?

Chapter 13 bankruptcy is a “reorganization” bankruptcy that has helped many people with regular income resolve debt challenges, including wage garnishment and foreclosure, and move toward a brighter financial future.

Why hire a lawyer?

In Chapter 13 bankruptcy, debtors keep all their property because the process doesn’t involve selling assets to pay creditors. (That’s different from Chapter 7 bankruptcy.) Debtors pay creditors what they can afford through a three- to five-year repayment plan. Creditors often receive far less than the balance owed.

However, navigating Chapter 13 is complicated and overwhelming for individuals to manage without professional help. A bankruptcy attorney’s knowledge simplifies the process and increases the chance of a successful outcome.

What can a lawyer do for you?

A bankruptcy lawyer handles all necessary legal steps while providing reassurance throughout the Chapter 13 process. Here are some key benefits you can expect to receive.

Consultation and advice: A knowledgeable bankruptcy attorney will listen to your financial goals and explain your options under Chapter 13.
Repayment plan guidance: After evaluating your income, debts, and assets and determining how much you can afford to pay, the lawyer will draft a plan that complies with legal requirements.
Protection against creditors: Hiring a bankruptcy attorney allows you to avoid the stress of collection calls, as creditors must contact your attorney rather than you directly.
Document preparation and filing: The filing process for Chapter 13 involves a considerable amount of paperwork. An attorney prepares and files your bankruptcy petition and repayment plan, ensuring that all disclosures are accurate and supported by required documentation.
Ongoing guidance: Completing a Chapter 13 plan requires a significant investment of time, and financial challenges often arise during the plan period. A bankruptcy lawyer will guide you through your options, file any necessary motions, and attend hearings.

Did you know?

While it's true that you repay only a portion of certain debts in Chapter 13 bankruptcy, you must fully repay others. These include child support, alimony, some tax debts, and student loans. However, you are allowed up to five years to make these repayments through the Chapter 13 plan.

Common Questions About Chapter 13

Potential filers often have a number of questions about Chapter 13 bankruptcy—here are some common ones.

Q: Can I keep my property when filing for Chapter 13?

Many worry that filing for bankruptcy will cause them to lose all their belongings. Chapter 13 lets you keep the property needed to sustain a home and employment. However, filers whose property isn't protected by state laws must pay the property's value through the plan.

Q: Will a Chapter 13 bankruptcy appear on my credit report?

Chapter 13 offers a fresh start but will impact your credit report for some time—Chapter 13 bankruptcy can stay on your credit report for up to seven years. However, the impact diminishes faster in Chapter 13 than in Chapter 7, allowing many people to rebuild their credit soon after completing bankruptcy.

Q: Is filing for Chapter 13 bankruptcy a sign of financial failure?

No one wants to file for bankruptcy, so perceiving it as a failure isn't unusual. However, the truth is that filing Chapter 13 is a strategic financial decision that allows you to take control of your debt and make proactive steps toward long-term financial stability.

Q: Is it possible to file for bankruptcy more than once?

Yes. If the bankruptcy court dismissed your last case before you completed it, you can often refile it immediately, depending on the circumstances. However, if you received a debt discharge in the previous case, several years must elapse before you qualify for another.

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Related practice areas

Bankruptcy and debt

If individuals or businesses have significant debt, they can file for bankruptcy in order to get rid of these debts and start over.

Chapter 7 bankruptcy

Chapter 7 bankruptcy can discharge small business debts for which you are personally liable, but it usually means closing down the business.

Chapter 11 bankruptcy

Businesses deeply in debt have the option of filing for Chapter 11 bankruptcy. Chapter 11 lets a business plan for repayment while still operating.

Debt collection

Debt collection options for small business owners include the use of collection agencies, small claims court, mediation, and arbitration.