Bend Chapter 13 Bankruptcy Attorney
Expert Chapter 13 Bankruptcy Guidance in Central Oregon
Are your debts overwhelming you? If a friend said: “You know, you can eliminate those debts and keep everything you have if you just reorganize and pay them to the best of your ability,” you’d probably listen — and listen intently.
But then if your friend mentions the word “bankruptcy,” you may start to shudder, thinking to yourself: “No, bankruptcy means failure, and the court can seize my property and sell it.”
However, your friend is right if they are referring to Chapter 13 of the bankruptcy code. This type of bankruptcy usually allows debtors to retain all their property.
If you’re in this situation — debts overwhelming you and creditors on your case daily seeking payment — you should consider the Chapter 13 bankruptcy option. It may sound simple on the surface, but you need the help of our experienced Bend Chapter 13 bankruptcy lawyer to help you navigate through the process and obtain the fresh start you’re seeking.
Contact Oregon Fresh Start today — we’ve handled more than 11,000 cases for individuals seeking bankruptcy protection. We can help you prepare all the paperwork, fashion a reorganization and repayment plan that the court will approve, and stand with you through the whole process.
Understanding the Chapter 13 Bankruptcy Process
Chapter 13 of the bankruptcy code is often called the “wage earner’s option.” To qualify for Chapter 13, you need to have a regular income and enough disposable cash left after you pay your monthly living expenses to make a payment to creditors. It is also often referred to as the reorganization-repayment plan.
A central part of a Chapter 13 filing, after showing you have enough disposable income to make a monthly payment, is to create a plan to consolidate your obligations that will satisfy not only the bankruptcy court but also your creditors.
Shortly after you file for Chapter 13, the trustee assigned to your case will arrange a meeting of creditors, which you must attend. The creditors might object to your plan, which could force you back to the drawing board or even into a Chapter 7 liquidation plan. For this reason, you definitely need the counsel and guidance of our skilled and experienced Chapter 13 bankruptcy attorney in Bend.
The repayment plan can be either three to five years in length; though, during COVID, some cases were extended to seven years. During the repayment period, you will make a monthly payment to the bankruptcy trustee assigned to you, who will then pay creditors. You cannot skip payments, or the court may dismiss your filing. If your income drops, you may be able to modify the monthly amount.
At the end of your three or five years of payments, you will be discharged from bankruptcy, and your dischargeable debts will be gone.
Eligibility Criteria for Chapter 13 Bankruptcy
The first step in qualifying for a Chapter 13 repayment plan is to have a regular income. Also, Chapter 13 is available only for individuals and families, not for businesses like partnerships or corporations (who must use Chapter 11). If you are a sole proprietor of a business, you may qualify for Chapter 13 protection.
The bankruptcy code also sets limits on the amount of debt you can incur to qualify for Chapter 13. The maximum amount of unsecured and secured debt is $2,750,000.
You must complete an approved credit counseling course within 180 days before filing. You cannot file for Chapter 13 if you’ve been discharged from a Chapter 7 filing within the past four years or from a Chapter 13 within the past two years.
You must be up to date on filing tax returns. You will be required to submit your tax filings annually during the length of your repayment plan, and any refunds you receive will probably be turned over to the trustee.
Exclusions in Chapter 13 Bankruptcy Protection
A Chapter 13 cannot relieve you of your child or spousal support obligations, and those payments must be factored into the calculation of your disposable income. You also cannot discharge most student loan obligations. Taxes due are also largely not subject to discharge.
It also should be noted that, in order to keep your home and car, you will need to continue making regular monthly payments. If you are behind in payments, you can include the arrears amounts in your repayment plan, but then you must continue to meet your normal monthly obligation.
Contact Our Bend Chapter 13 Bankruptcy Lawyer Today
Though it’s technically possible to file for Chapter 13 on your own, it’s certainly not advised. The paperwork requirements and legal hoops will be taxing, to say the least. You can rely on us to assess your situation and come up with a repayment plan that will satisfy both the court and creditors.
Contact Oregon Fresh Start today to schedule a meeting with our Chapter 13 bankruptcy attorney in Bend!
Have Questions?
We Have Answers!
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WHAT DOES IT MEAN WHEN A CREDITOR WANTS ME TO REAFFIRM MY LOAN WITH THEM? IS THAT DIFFERENT FROM REDEMPTION?Secured creditors (those creditors who have collateral for their loans, such as a car or boat) will want you to reaffirm the loan. When you reaffirm the loan, you re-obligate yourself to all of the loan terms just as if you were getting a new loan from the creditor. Although this may sound harmless, it has serious consequences. If you reaffirm and then later default on the loan, you are personally liable to pay the balance and you will have no protection on that debt from the bankruptcy. One of the major changes made to bankruptcy law in 2005 is that a creditor can repossess the collateral if you do not reaffirm. This change does not apply to real estate debt. Your reaffirmation agreement is subject to court approval in some circumstances. If your income is less than your monthly expenses, you may be required to participate in a telephone hearing with the court where you will be required to explain to a bankruptcy judge why the reaffirmation is in your best interest and how you intend to make the payment. More often than not, when you file bankruptcy, you owe more on the collateral securing the loan than it is worth. If your loan is more than 2 1/2 years old, under a process called REDEMPTION, bankruptcy law allows you to reduce the amount owing on the debt to the value of the collateral if you can pay it all at once. Many debtors can find a source of family financing or, perhaps, borrow from a 401K account, etc. and come up with the full value. There is also a company on the internet that specializes in redemption funding for cars. Talk with OREGON FRESH START about this for more information. WOULDN'T IT BE BETTER TO SETTLE MY DEBTS THROUGH A DEBT CONSOLIDATION PLAN? Although there may be a few reputable credit counseling services out there, most will not and cannot give you what they promise. Usually, they promise they can settle your debts for 50 cents on the dollar and that when you get done, you will have great credit. The facts are that (1) most people do not complete the "plans" because they usually do not work, and if you do complete the plan, (2) your credit is trashed. Creditors report to credit bureaus exactly what happened. If you get hooked on a 50% plan, your credit report will show that you did not pay all of the debt and that the unpaid balance was charged off. Most creditors do not waive interest or late fees. In addition, most credit counseling programs will charge you a fee (a portion of each payment) and they often do not send your money to the creditors for several months. This gives them an interest-free loan working with your money. Most debtors would be better off filing a Chapter 7 or Chapter 13 bankruptcy which can force the creditors to accept your terms of repayment. In addition, and this is a big one, the amount that was charged off by the creditor will likely be reported to the IRS with a 1099 tax form and you will be required to pay income taxes on the charged-off amount which will be a very unpleasant surprise for you when you file your tax returns for that year. CAN STUDENT LOANS BE DISCHARGED? Yes, but it is not easy. It will also, probably, be expensive. Once upon a time, federally guaranteed student loans were dischargeable if the loan was more than 7 years old. In 1998, the federal government changed all that. Now, federally guaranteed student loans cannot be discharged unless you can prove that being required to repay the loan will cause an undue hardship - not just a hardship, but an "undue" hardship. To have an opportunity to prove your case, you will be required to sue the federal government in bankruptcy court through an adversary proceeding. You will be required to prove all of the following: repayment of the loan would prevent you from maintaining a minimal standard of living your financial circumstances are not likely to change in the foreseeable future you made a good faith effort to repay the loan before you became unable to pay Frequently, the federal government will try to show that you could get a reduced payment plan by going through a consolidation program that will stretch out your payments for 20 years or more based upon an "ability to pay." In short, it is possible to discharge a student loan, but the government has made it very difficult. Also, remember that the government has a raft of lawyers to defend the federal government in the lawsuit who are paid for by your taxes. On the other hand, you will be required to pay for your attorney.
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ARE LOANS OWING TO RELATIVES GIVEN SPECIAL TREATMENT IN BANKRUPTCY?It is not uncommon for you to owe money to a relative. As discussed in other answers to questions, you must list every debt. This includes debts you owe to your family members. The bankruptcy court looks closely at loan transactions between family members. As we all know, if we owe money to several creditors and one of them is a family member, we will probably be inclined to pay the family member first. In a bankruptcy context, this often means that family members have been paid while the other creditors have not been paid. One of the main ideas behind filing bankruptcy is that all creditors share your misfortune equally. One of the questions asked in the bankruptcy petition is whether you have repaid any loans from relatives within the past year. If you have, you are required to disclose the amount. If the amount is large enough, the bankruptcy trustee has the power to get the money back from the relative and spread it out equally among all the creditors. While there is no set rule as to what amount is "large enough," if the amount were $2,000 or more, that would definitely be "large enough." There are other factors that go into the trustee's decision, including whether you have any other assets which exceed the exemption amounts and how likely it is the trustee can obtain a return of the money from the relative. A relative who has already spent the money and whose only source of income is Social Security is not likely to be a target for the trustee. If you have a loan from a relative and are considering filing bankruptcy, stop paying on the loan until you consult with OREGON FRESH START.
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CAN I TRANSFER PROPERTY TO A FRIEND OR RELATIVE TO PROTECT IT FROM BANKRUPTCY?If you transfer any of your property to a relative, even by selling it, within 1 year of filing for bankruptcy, the bankruptcy trustee can reverse that transfer if it was transferred for less than the fair market value of the property. For example, if you gave Uncle Joe your car 30 days prior to filing bankruptcy because you did not want it to show as an asset in your bankruptcy, the trustee has the power to sue Uncle Joe and get the car back. Unfortunately, some people engage in such an activity before consulting with an attorney. It is also not advisable if you have already made the transfer to attempt to transfer it back without first obtaining expert legal advice.
