Maui Chapter 13 Bankruptcy Attorneys
Proudly Helping Clients Tackle Burdensome Debt
If you are deep in debt and unsure of what to do, then filing for Chapter
13 bankruptcy can put an end to creditor calls and put you on the right
track to clear your debt. Sometimes referred to as the “Wage Earner’s
Plan,” Chapter 13 enables people who have regular income to form
a plan to efficiently repay all their debts.
Chapter 13 Bankruptcy includes statements where debtors can propose a repayment
option to make installments to their creditors over three to five years.
The key thing about Chapter 13 is that in no way does the debtor lose
any property. Additionally, no assets are taken by a trustee or administered
to repay creditors in Chapter 13 bankruptcy.
If you file for Chapter 13 bankruptcy and your current income is less than
the state median, then the minimum period to pay the debt will be three
years unless you are approved for a longer period. If your current income
is higher than the state median, then the plan can be extended for five
years. Under no circumstances will the period be longer than five years.
Within the specified period, the law forbids the creditors from collecting
anything from debtors.
What Are the Advantages of Chapter 13 Bankruptcy?
One of the key aspects of Chapter 13 is that debtors with real property
delinquencies can cure those arrearages inside the plan and prevent the
mortgage company from foreclosing. Also, unlike in Chapter 7, car payments
can oftentimes be favorably lowered on a monthly basis with Chapter 13.
How Chapter 13 Bankruptcy Can Save Your Home in Maui
A Chapter 13 bankruptcy establishes a payment plan whereby you can catch
up with your secured debt obligations (including a mortgage). Once the
plan is approved by the court, you will make one single monthly payment
to the bankruptcy trustee. This repayment plan will include provisions
to help pay off any accumulated mortgage arrearages (the back amount owed).
Chapter 13 bankruptcy is the cheapest, most sure-fire way to save your
home and other real property from foreclosure.
Chapter 13 bankruptcy also benefits homeowners who have a second mortgage
and owe more money on the primary mortgage than the property is worth.
In this situation, the second mortgage or line of equity may be eligible
for a complete discharge, known as a “lien strip.” This can
be extremely helpful for homeowners whose property value has dropped in
How Chapter 13 Bankruptcy Can Save Your Vehicle
If you owe more than the actual value of your vehicle, then filing for
bankruptcy might qualify you for what is called a “cramdown.”
A cramdown reduces the amount owed to the car’s actual value because
this is the amount that the lender would receive if it was repossessed
and sold at an auction. To qualify, you must have purchased the car more
than 2 ½ years before filing for bankruptcy, along with other requirements.
Our dedicated Maui Chapter 13 bankruptcy attorney can review the facts
of your situation to see if a cramdown is available for you.