A Bankruptcy Repayment Plan Could Be Your Ticket to Financial Freedom especially if you are behind on mortgage payments or car payments.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney
  • Are you behind on your home loan and need to stop a foreclosure to save your home? 
  • Are you afraid that your car could be repossessed any day?
  • Do you owe taxes that cannot be discharged?  
  • Are you behind on child or spousal support payments? 
  • Do you have equity in a house or own a car free and clear?
  • Have you filed a Chapter 7 within the past 8 years?

If you answered yes to one or more of these questions then a Chapter 13 Bankruptcy may be best for you. 

A Chapter 13 bankruptcy in Virginia is designed for people with income to repay some part of their debts over three to five years. During the three to five year period, creditors cannot attempt to collect debts to include calling you about a debt or trying to sue you in state court.

There are some benefits of Chapter 13 not offered by a Chapter 7 bankruptcy. A Chapter 13 allows homeowners a chance to save their home from foreclosure. Instead of foreclosure, under Chapter 13 debtors can catch up on their late mortgage payments over time. However, you must resume making the regular payments after the Chapter 13 bankruptcy is filed. Chapter 13 also allows debtors to modify secured debts, like a car loan, and pay them back through the plan. You also may be able to remove a 2nd mortgage or home equity loan or judgment lien in a Chapter 13.

Once you decide to file a Chapter 13 bankruptcy, you file a petition with the bankruptcy court. Along with the petition, you must file information about assets, liabilities, income, expenses, and other financial information. You must pay filing fees at the time of filing the petition. The filing of the petition will stop most collection actions against the debtor, although there are exceptions. Any foreclosure proceedings will also be stopped, and you can propose to bring the past-due payments current through the payment plan.

After the petition is filed, a trustee will be appointed to administer the case. The trustee will hold a hearing, called the meeting of creditors, after the petition is filed. However, normally, no creditors actually attend the hearing. After the meeting, there is a period of time for the trustee and the creditors to review your proposed repayment plan, which must be submitted with the petition or shortly after the petition is filed. If there are no objections to the plan, the Court will confirm the plan and it is binding on all creditors.

Within 30 days after filing the case, you must begin making payments to the trustee. The trustee will disburse the payments received from you to the creditors according to the plan. Most unsecured creditors will only get a small percentage of their claim.

Once all payments have been made under the Chapter 13 plan, you should be entitled to a discharge. The discharge will release you from all debts provided for in the plan. Some debts will not be discharged in a Chapter 13, such as debts for alimony or child support, some taxes, most student loans, debts from injuries because of the debtor’s drunk driving, and debts related to a criminal conviction.

For more information on Chapter 13 bankruptcy, check out our frequently asked question "Am I Eligible for A Chapter 13 Bankruptcy".

If you are ready to be debt free, contact us or call (757) 320-2010. We will schedule a no cost, no obligation appointment so we can show you how to become debt free.

Serving debtors by stopping foreclosures and repossessions and ending creditor harassment with Chapter 13 Bankruptcy Filings throughout Hampton Roads to include Virginia Beach, Norfolk, Chesapeake and Portsmouth.