Chapter 13 Bankruptcy Questions and Answers
*This Seattle, Washington Chapter 13 bankruptcy questions and answers is provided for informational purposes and should not be taken as actual legal advice.
- Q: If I decide to retain a bankruptcy attorney at Symmes Law Group, PLLC in a chapter 13 Bankruptcy what does my fee cover?A: The lawyers at Symmes Law Group will prepare and file your bankruptcy petition with the court, put together a repayment plan that will be confirmed by the court, answer your questions, attend your 341 trustee meeting with you, and attend a confirmation hearing on your behalf. The trustee meeting is most likely the only time you have to go to court.
- Q: What does it cost to for a file chapter 13 bankruptcy? A: A flat fee will be quoted to you during your free initial consultation depending on the facts of your case. There is a court filing fee of $313, credit counseling fee of $25-$50, and a credit report fee of $37 per person which is an additional cost in addition to the flat fee legal fee that we quote you. The legal and credit report fees are due prior to Symmes Law Group filing your case, however the court filing fee may be paid in installments with the bankruptcy court. You may retain us for as little as $100 and make payments which will stop creditors from harassing you, however we cannot file your case until the full legal fee is paid.
- Q: Who qualifies for a chapter 13 bankruptcy? A: Generally, most debtors qualify for a chapter 13 bankruptcy as long as they can afford to make the required payments every month and you are within the debt limits to file for chapter 13 bankruptcy. If you have filed a chapter 7 bankruptcy in the last 4 years you are not eligible to receive a discharge in chapter 13 bankruptcy.
- Q: How do I know if I will be on a 3 year or 5 year repayment plan? A: A 3 year repayment plan is reserved for debtors who otherwise would qualify for a chapter 7 bankruptcy based on their household income and family size, but are filing a chapter 13 bankruptcy for other reasons, such as making up missed payments on a mortgage. Most chapter 13 bankruptcy cases will be 5 year plans for debtors whose household income is above the median in their state.
- Q: Which debts are dischargeable? A: The most common debts such as credit cards, medical bills, and payday loans are dischargeable in a chapter 13 bankruptcy after you have made payments into your payment plan for the required period. Student Loans, taxes incurred within the last three years, alimony, child support, debts from illegal activity, and any account in which you charged $600 or more in the last 90 days prior to filing are all considered priority debts in which you must pay them back 100% in your repayment plan. This could increase the payments that you are required to make every month.
- Q: How much of my personal belongings can I keep when I file Chapter 13 Bankruptcy? A: In chapter 13 bankruptcy, no assets are liquidated or sold. You will be allowed to retain all of your personal items including vehicles and a personal residence. A bankruptcy lawyer with Symmes Law Group will assess your situation and determine whether the federal or state bankruptcy exemptions should be applied to your case. If your property is in excess of exemption law, you may be required to pay additional money into your repayment plan to make up the difference.
- Q: When and where do I have to go to court? A: In most cases you will only be required to attend a court meeting one time telephonically to meet with an attorney from the chapter 13 trustee’s office who will question you about your bankruptcy petition, assets and income. This meeting usually occurs in about 5-6 weeks from your filing date and is called the meeting of creditors. The meeting will be held in the jurisdiction for which you live and you will have a Seattle bankruptcy lawyer attend with you. Since the Covid-19 Pandemic all meetings have been telephonic and the US Trustee plans to keep it that way or possibly move to Zoom hearings.
- Q: Who do I make my monthly chapter 13 installment payments too? A: You will be required to make your payments directly to the chapter 13 trustee for the Western District of Washington. Your first plan payment will be due 30 days after your case is filed. In most cases you will sign up for automatic withdrawals from your paycheck or bank account, but you may be allowed to make your payments online through the trustee’s online payment system.
- Q: Can I file my case in Washington State?A: You may file your chapter 13 bankruptcy case in Washington State if you have lived in Washington for the greater part of the last 180 days.
- Q: How long until my debts are completely discharged? A: Generally the entire chapter 13 bankruptcy process takes about 3-5 years from the date of filing. You will be notified by mail of your discharge. After you file your case you will have the protection of the automatic stay which forbids creditors from collecting on debts.
- Q: May I convert my chapter 13 case to a chapter 7 case? A: Yes. If your household has suffered a decrease in household income that will cause your household to be below the median income for the family size, then you may petition the court by filing a legal motion to convert your case to a chapter 7 bankruptcy. In general, you must show some sort of hardship for why you cannot make your chapter 13 plan payments.
- Q: If I am being garnished, can a chapter 13 bankruptcy stop the garnishment? A: Yes, a chapter 13 bankruptcy will stop your garnishment after we file your case and notify your employer.
- Q: Will a chapter 13 bankruptcy stop a foreclosure on my home? A: Filing a chapter 13 bankruptcy will stop a foreclosure on your home and in most cases allows a debtor to catch up on missed mortgage payments. These arrears would have to be paid back in full over the course of you repayment plan. This will cause your monthly payments to increase the more you are behind, however if you can afford to make the payments and wish to keep your home, a chapter 13 bankruptcy is a good option for you.
- Q: How often can a person file a chapter 13 bankruptcy? A: A debtor may file for chapter 13 bankruptcy after 4 years have passed from the original chapter 7 bankruptcy filing date to receive a discharge, and 2 years after previously completing a chapter 13 plan.
- Q: Do I have to make a minimum monthly income to file a Chapter 13 bankruptcy? A: Yes. A debtor must be able to make payments into their repayment plan every month. If you cannot afford your monthly payments, your case will be dismissed and you will not receive a discharge of any remaining debt.
- Q: Can I keep my bank accounts or credit account that I like open? A: No, in chapter 13 bankruptcy you cannot choose which debts you would like to include, and which debts you would not like to include. You must include all of the debts you are aware of at the time of filing. Whether a bank or credit card company wishes to keep you as a customer is up to them. You will need to call them to find out what will happen if you file bankruptcy.
- Q: How long does a bankruptcy stay on my credit report? A: A chapter 13 bankruptcy will stay on your credit report for a period of 10 years. After you file bankruptcy you may immediately start rebuilding your credit through obtaining higher interest rate credit cards, car loans and prepaid credit cards. Filing a chapter 13 bankruptcy will most likely have a more favorable result on your credit score than filing a chapter 7 bankruptcy due to the fact that you are making payments on some of your debts.
- Q: Can I strip and discharge my second mortgage in a Chapter 13 Bankruptcy?A: Whether you can discharge and strip your second mortgage will depend on how much your home is worth and how much mortgage debt you owe. If your home is valued at less than your first mortgage you may completely strip off the second mortgage and get it discharged through a chapter 13 bankruptcy. If your home is worth more than your first mortgage, lien stripping will not be an option for you.
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