Chapter 13 Bankruptcy
If you’re struggling with overwhelming debt but have a reliable income, Chapter 13 bankruptcy may be the ideal solution. At KSwartzLaw, we understand the stress of financial challenges, and we’re dedicated to guiding you through the complexities of Chapter 13 bankruptcy law.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is often called a "reorganization bankruptcy." Unlike Chapter 7, which involves the liquidating certain assets to pay off creditors, Chapter 13 allows you to retain your property while repaying debts over a set period.
For many, this path provides a practical alternative to foreclosure and allows for more financial control. Through a Chapter 13 plan, debtors can make manageable monthly payments based on their income and expenses, typically spread over three to five years. With Chapter 13, your debt is reorganized into one simplified payment plan, often consolidating various unsecured debts like credit cards and medical bills. The plan can also include any overdue house payments, tax debts, or car payments, giving you time to catch up and potentially saving your home or vehicle from repossession.
Filing Chapter 13 stops the craziness of creditors in their tracks and puts you back in control of your financial life, making it boring, structured and predictable. This type of bankruptcy case will run for 3 to 5 years in length.
The moment you file Chapter 13, the Court issues an order stopping all creditor collection actions, lawsuits, foreclosure auctions, wage and bank garnishments, and vehicle repossessions.
We then prepare and file a Plan with the court. The Plan must (1) represent your “best efforts” at repaying your debt; and (2) give the creditors what they would have received if you filed a Chapter 7 (“Best interests”).
(1) “Best Efforts” simply means:
Gross Income
(-) Less taxes, insurance, retirement contributions, retirement loan repayments, FSAs
(-) Less your personal “reasonable & necessary” expenses
(=) Your best efforts.
(2) “Best interests” calculation:
We run a hypothetical Chapter 7, remember, under Chapter 7 the trustee sells any non-exempt assets to repay your creditors something. A good example would be if your home was worth $500,000 and you owed $250,000. The trustee under Chapter 7 would likely sell a home with this much equity. Under Chapter 13 they would not sell the home, but they would require you to give the creditors the same amount that the Chapter 7 trustee would have given them. To figure out what that amount would be we would run a calculation like this:
Home $500,000 (funds from the sale)
(-) Costs of sale (8%) $ 40,000 (realtor commissions and closing costs)
(-) Mortgage balance $250,000
(-) Homestead $150,000 (amount Oregon law protects for you as of 1/1/25)
(-) Ch7 Trustee fee $ 18,750
(=) NET $ 41,250 (the amount paid to creditors under ch7)
In this example your “Best interests” would require you to pay your creditors a minimum of $41,250 through the Plan.
This type of filing is a personal bankruptcy filing for people who:
(1) Make too much money to qualify for Chapter 7; or
(2) Want to protect/keep an asset that could be sold under a Chapter 7; or
(3) Have debts that can’t be wiped out in a Chapter 7 (and want to focus on paying that creditor through the Chapter 13 Plan); or
(4) Have filed a prior Chapter 7 within the last 8 years.
How KSwartzLaw Can Help You with Chapter 13 Bankruptcy
Customized Legal Strategy
Protection from Foreclosure and Creditors
Protection from Foreclosure and Creditors
As your bankruptcy lawyer, we analyze your financial circumstances in detail to create a repayment plan tailored to your needs. We aim to secure a solution that relieves financial stress while helping you reach long-term stability.
Protection from Foreclosure and Creditors
Protection from Foreclosure and Creditors
Protection from Foreclosure and Creditors
Filing for Chapter 13 bankruptcy triggers an automatic stay, which halts foreclosure proceedings, stops creditor calls, and prevents wage garnishments. This stay offers you breathing room to reorganize your finances without immediate pressure from creditors.
Experienced Guidance
Protection from Foreclosure and Creditors
Experienced Guidance
Bankruptcy laws and processes vary by state, and our team at KSwartzLaw has extensive experience in navigating Oregon’s bankruptcy court system. As your experienced bankruptcy attorney, we ensure that each step is handled efficiently, providing clarity on what to expect under the bankruptcy code.
The Benefits of Chapter 13 Bankruptcy Law
Asset Retention
One of the most significant advantages of Chapter 13 is that it allows you to keep essential assets, like your home and car. This is especially beneficial if you’ve fallen behind on mortgage or auto payments, as the repayment plan allows you to catch up over time without losing your property.
Avoiding Foreclosure
For many, avoiding foreclosure is a priority. Chapter 13 gives you a way to stop foreclosure proceedings and regain control over your mortgage payments. It can provide the time needed to work toward financial recovery while maintaining ownership of your home.
Debt Consolidation into a Single Payment
Chapter 13 simplifies debt management by consolidating multiple unsecured debts, like medical bills and credit card debt, into one monthly payment. With a single, manageable amount to pay each month, budgeting becomes easier, and clients can feel more in control of their finances.
Partial Debt Discharge
In some cases, completing a Chapter 13 repayment plan may result in a discharge of remaining unsecured debt by negotiating with unsecured creditors, freeing you from certain obligations once the plan is complete.
The Chapter 13 Filing Bankruptcy Process with KSwartzLaw
1. Initial Consultation
2. Developing a Payment Plan
2. Developing a Payment Plan
During your initial consultation, we assess your financial situation to determine if Chapter 13 is the best solution. We will discuss your income, expenses, assets, and debt, as well as your goals, to recommend a path forward.
2. Developing a Payment Plan
2. Developing a Payment Plan
2. Developing a Payment Plan
If Chapter 13 is right for you, our team will work closely with you to develop a realistic repayment plan that fits within your budget. We’ll help you calculate reasonable monthly payments based on your disposable income.
3. Filing and Documentation
2. Developing a Payment Plan
4. Automatic Stay Protection
We handle all paperwork and filings, ensuring that your petition is completed accurately and filed promptly with the bankruptcy court. By overseeing the filing process, we reduce the risk of errors or delays.
4. Automatic Stay Protection
6. Ongoing Support and Guidance
4. Automatic Stay Protection
If you are struggling with student loan debt, our attorneys can help you explore your options for reducing or eliminating your debt. We can also help you understand your rights as a borrower and develop a plan to manage your student loan payments.
5.Court Representation
6. Ongoing Support and Guidance
6. Ongoing Support and Guidance
Throughout the bankruptcy process, KSwartzLaw represents you in court and in any necessary meetings with the bankruptcy trustee. We are there to ensure your rights are protected and to handle any legal matters that may arise.
6. Ongoing Support and Guidance
6. Ongoing Support and Guidance
6. Ongoing Support and Guidance
The journey to financial freedom doesn’t end with filing. Our team continues to provide guidance throughout your repayment period, answering questions and offering support to help you stay on track and complete your plan successfully.
Let us help you regain control and find a fresh start!
Get Started on the Path to Financial Freedom with KSwartzLaw
If you’re ready to explore Chapter 13 bankruptcy as a solution to your financial challenges, KSwartzLaw is here to help. Our team has the knowledge and experience to guide you through each step of the bankruptcy petition process with confidence, compassion, and care.