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Chapter 13 Bankruptcy

Dedicated Chapter 13 Bankruptcy Attorney Helps Debtors in Joplin, MO

Trustworthy advice on payment plans to defeat home foreclosure

Consumers who do not qualify for Chapter 7 dissolution bankruptcy may qualify for a Chapter 13 restructuring of their debt. Chapter 13 is often the best choice for consumers who make a steady income but have large amounts of secured debt, such as a home they want to keep. If you are considering Chapter 13 protection, you need detailed guidance from an experienced and concerned bankruptcy attorney. Don’t settle for an impersonal bankruptcy mill, where they put paperwork before people. At Charles H. Lonardo, Attorney at Law, you get personalized guidance based on your specific circumstances. Drawing on more than 30 years of experience, I review all your financials, listen to your concerns, and explain your options in detail. Bankruptcy is not a one-size-fits-all process. So, only trust your case to an attorney who is willing to give you the time and attention you deserve.

How Chapter 13 bankruptcy differs from Chapter 7

Chapter 13 does not deliver the quick discharge of debt you get with Chapter 7. Under Chapter 13, you submit a payment plan to the court, based on your monthly disposable income. You must demonstrate your ability to repay your creditors at least as much as they would get through a Chapter 7 dissolution. Depending on your income, your payment plan can run anywhere from three to five years.

As with Chapter 7, you get an automatic stay, which prohibits your creditors from contacting you to attempt to collect. You must also attend a §341 meeting of creditors. Creditors in a Chapter 13 procedure can object to your payment plan, so it’s important to have an experienced attorney who is capable of asserting your case. At a hearing, the bankruptcy judge will either confirm or deny your payment plan. When your plan is approved, you must commit to completing it, after which the court will discharge your remaining eligible debt.

Stopping foreclosure through Chapter 13 bankruptcy

If you earn a good income but are worried about losing your home to foreclosure, Chapter 13 bankruptcy might be the answer. Chapter 13 allows you to create a payment plan based on your disposable income that is usually less than what you pay in bills already. Your payment plan can keep you current with mortgage payments. Then, at the end of your plan, the court discharges your remaining eligible debt, so you have breathing room to continue paying your mortgage. As long as you remain faithful to your plan, you should be able to keep your home.

In addition, Chapter 13 can help you discharge a second or third mortgage in a process known as lien stripping. A lien is a legal claim for a certain amount of the value of your home. When you take out a second mortgage for, say, $50,000, the lender has a claim against $50,000 of the home’s value. But what if there isn’t enough value to cover the lien?

Imagine you have a home that was valued at $250,000 when you bought it. You still owe $180,000 on the home, but you took out a home equity loan on which you still owe $50,000. You owe $230,000 on a house that’s worth $250,000, so each of your creditors has a lien. But what if the housing market was overheated when you bought the house, and prices have plummeted since? Your home could be worth $170,000. That means your second home loan has no home value to secure it. In bankruptcy, the court will treat that second loan as unsecured debt, so when you complete your payment plan, the court will discharge that debt. You keep your home, free of that $50,000 debt.

Contact a reliable Chapter 13 bankruptcy attorney serving Jasper, Newton and McDonald counties

If you are a homeowner or have a steady income but are still struggling with overwhelming debt, Chapter 13 bankruptcy may provide the relief you need. Call Charles H. Lonardo, Attorney at Law today at 417-691-8238 or contact my office online to schedule a consultation. My Joplin office is at 430 W 7th Street, the historic Route 66, just one block south of the Jasper County Courthouse.