Chapter 13 cases are often called “repayment” or “partial repayment” plans. These are bankruptcy reorganizations, where a payment schedule is set up to deal with your creditors. Chapter 13 is very similar to a debt consolidation program, but with many more special options and protections set up for you…and the power of the Federal Courts to keep every creditor from bothering you!!
Clients make small payments for a period of 3 to 5 years, and often pay creditors as little as a few pennies on every dollar owed!! In the end, ALL of your financial problems are fixed, you will finish the case with a Federal Court Order saying you are absolutely current on any longer-term obligations (like house payments) AND you will totally walk away from the rest of what was owed to other creditors!!
Like all other forms of bankruptcy, just the FILING of a Chapter 13 case gets a person IMMEDIATE protection from every sort of debt collection (no more foreclosures, repossessions, lawsuits, garnishments, threatening letters or harassing phone calls). The best part is that most creditors do not even get a choice about stopping their collection efforts…the Federal Bankruptcy Judge and your attorneys are there to force them to stop!! We’ve got your back!!
What special problems can Chapter 13 fix?
A Chapter 13 case can fix almost every financial problem you are facing…even the very challenging ones!! Most people (even many lawyers doing bankruptcy) do not realize how many different areas of special help can be given through a Chapter 13 case!! For example:
Home: If you are behind on your home mortgage payments, we can absolutely stop the foreclosure process and allow you 3 to 5 years to pay those past-due mortgage payments, spread out S-L-O-W-L-Y over time (just a little extra every month) to let you get back on your feet!!
Vehicle: If you are behind on a vehicle and worried about a repossession, we can stop the Repo Man in his tracks and allow you those 3 to 5 years to pay off the vehicle! If the payments are just too high for your car or truck, sometimes we can lower them by stretching the payments all the way out over 5 years, making them much more affordable for our clients. Also, we are often able to get a vehicle back for you after it has been repossessed (if we file the case soon enough!!).
Student Loans: Many people are facing high student loan payments, with very little flexibility or help from the lenders. In a Chapter 13 case we can lower those huge payments for up to 5 years, allowing you to really get your feet firmly planted before having to face a normal repayment schedule on the student loans. Many of our clients are saving hundreds of dollars each month off what they used to pay on their student loans! And again, the best part is that the student loan companies usually can do nothing to stop it!!
Income Taxes owing: If you owe Federal or State income taxes, we can put them into a Chapter 13 case and often reduce the amount you owe. Also, and most importantly, we can structure a repayment plan to the IRS that allows you up to 5 years to pay them back with NO INTEREST AND NO PENALTIES OWING during those 5 years!! This saves our clients thousands of dollars!!
Second and Third Mortgages: Many times, we can strip these mortgages totally off and away from the house (depending on the overall value of the house itself & the amount owed on your first mortgage). Over the years, we have helped hundreds of clients totally wipe away these extra mortgages (sometimes known as Home Equity Loans, Lines of Credit, or Window/Construction liens). The cost savings allows clients to keep houses they might otherwise lose!!
Co-Signed Loans/Credit Cards: If you want to protect a co-signer on one of your loans or charge accounts, a Chapter 13 Plan will allow you to pay back that money over 3-5 years, and during that time the creditor cannot bother your co-signer in any way!!
Tickets: Some clients face multiple tickets and fines that are just overwhelming them, and they cannot get things under control. In a Chapter 13, we can pay the fines on those tickets slowly, over several years, and often allow you to get your drivers’ license back soon after your case is filed!! We can also deal with Drivers’ Responsibility Fees and Drivers License suspensions stemming from having an accident without insurance coverage.
Friend of the Court Money Owed: If you owe past-due child support and are worried about huge garnishments or worse, we can do a Chapter 13 case and propose to pay some or all of the arrears back over 5 years, usually giving you total protection during that time. In some instances, we have even kept clients out of jail who otherwise would be arrested for being so far behind on their child support!! The key is in proposing to pay those arrearages, or make a good effort at paying as much as possible during the case.
Property Taxes: We file many cases each year to help clients avoid losing their homes because of past due property taxes. Again, we can propose to pay those back very slowly, taking up to 5 years to do it!
Past due Water Bills (Even Shutoffs): We can get water service turned back on almost immediately, and again can allow you years to pay any past due bill. Like all other creditors, the Water Department and the City have no choice but to cooperate with the Bankruptcy Court Judge’s Orders!!
Rental Properties: In some cases, we have told mortgage companies that they will ONLY receive the amount of money that the rental property is worth, NOT the total amount of money owed on the mortgage. Clients have ended up saving thousands and thousands of dollars in the process, leaving the case 5 years later totally owning their rental properties!!
A Chapter 13 case, and what it can do for you, is only limited by your imagination!! It is a versatile tool to help with every problem listed above…and more!! Frego & Associates does more Chapter 13 cases than any law firm in Michigan, so when you really need help be sure to go to the people who know what they are doing!! We try to make the entire process simple and basic, helping you every step of the way. When it comes to protecting you and your family from these tough problems… EXPERIENCE COUNTS!!!
James Frego is the owner and managing member of Frego & Associates—The Bankruptcy Law Office, which is Michigan’s largest consumer bankruptcy law firm. It has offices in Warren, Dearborn Heights, Flint and Ann Arbor, with its practice focused primarily on helping people get the protection they need from creditors, especially through the filing of bankruptcy. To schedule a no-obligation visit with an attorney at any of our offices, please call (800) 978-4788 or visit FregoLaw.com for more information. The law is there to help you… and so are we!
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