Bankruptcy can help people get a fresh financial start and reclaim their assets. But there are several things you need to know before filing for bankruptcy.
First, you should meet with a credit counselor and bankruptcy attorney. These initial consultations are free and will help you decide if bankruptcy is right for you.
Your Phoenix Chapter 13 Lawyer will work with you to determine your debts, assets and income. They will then create a plan to repay your debts over three to five years, while keeping your property and remaining solvent.
You can file for Chapter 13 without a lawyer, but that can be risky. If you skip a step or make a mistake on the paperwork, your case could be thrown out and you could not have certain debts covered.
Chapter 13 is the most common form of personal bankruptcy, and it’s a good choice for people who have a steady income and whose assets aren’t worth much. It’s also a good option for people who need to catch up on missed mortgage or car payments.
It’s important to remember that, even if you choose Chapter 13, your debt will remain on your credit report for 10 years. Your creditors can still try to collect the money from you, and they might appear at your meeting of creditors.
Depending on the type of debts you have, your Phoenix Chapter 13 Lawyer may be able to negotiate a deal with your creditors to reduce or eliminate some of them. For example, if you have credit card balances with high interest rates and you agree to pay them off in full over a period of three to five years, your attorney might be able to reduce the balance to a more reasonable amount or eliminate it altogether.
The best Chapter 13 Bankruptcy Attorney in Phoenix will have the knowledge and experience to make sure your case goes smoothly. They’ll also be able to offer you a variety of options and explain how each one works.
A primary goal of a Chapter 13 is to help you keep your home or avoid foreclosure. In most cases, this is achieved by negotiating a mortgage modification with your lender through a Loss Mitigation program.
In some circumstances, a Chapter 13 bankruptcy can also be used to cure mortgage arrears or other types of secured debt. The most common way to cure mortgage arrears in a Chapter 13 is through the “catch-up” plan, which combines post-petition monthly mortgage payments directly to the lender with a separate monthly Chapter 13 payment designed to cure pre-petition mortgage arrears and all other debt to a court-appointed trustee.
For this reason, it is critical to have a lawyer experienced in mortgage law and negotiating with lenders to get the best results possible.
You might be able to cram down your secondary loan (home equity or second mortgage) under Chapter 13. This means that the loan can be recharacterized as an unsecured debt, and you’ll be able to pay it off at a fraction of its original value in your Chapter 13 repayment plan.