Rockville Chapter 13 Bankruptcy Lawyer
Filing for a Chapter 13 Bankruptcy in Germantown & the Surrounding Areas
If you or a loved one are wondering if a Chapter 13 bankruptcy is right
for you, The Diamond Law Group can help. With a commitment to respond
within 24 hours, we are dedicated to ensuring you get the representation
you deserve.
Read our testimonials here.
If you or someone you love is thinking about filing for bankruptcy, reach out to
our firm today to learn how we can help by scheduling a free, no-obligation consultation.
Call us at
(301) 417-5855 or
contact us online.
What Is a Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy allows you to declare
bankruptcy and follow a Court made repayment plan over a period of three to five
years without having to liquidate your assets.
This stops collection attempts and creditor harassment while consolidating
your debts into one trust. The repayment of these debts is administered
by a Court selected trustee.
This allows individuals with income to both retain their property and repay
their debts. Such a plan can provide a structured way to put you back
on track to financial stability.
When Should You Consider Chapter 13 Bankruptcy?
You should consider a Chapter 13 bankruptcy if:
- Your unsecured debt is less than $394,725.00.
- Your secured debt is less than $1,184,200.00.
- You have a regular income or salary.
How a Chapter 13 Bankruptcy Works
You must file for a Chapter 13 bankruptcy and provide the Court with all
the information about your assets and liabilities.
The Court then constructs a repayment plan tailored for you in which debts
are prioritized and paid off over three to five years. After completing
the plan, you are absolved of liability and can once again chase your
dreams of a debt free future.
Will My Trustee Look at my Bank Account?
When going through a Chapter 13 Bankruptcy repayment plan, you will be
assigned a trustee to your account. This trustee will be in charge of
your assets temporarily while you are going through your repayment plan.
The trustee will, in fact, have access and management over your bank account.
Can You Get Rid of a Second Mortgage by Filing for Bankruptcy?
An advantage of Chapter 13 is that it allows people with two mortgages
to eliminate their second mortgage through a Chapter 13 filing. This process,
also known as “lien stripping” or “lien avoidance,”
can be done when the value of the property is less than the value of the
first mortgage.
The logic is simple. Usually when people file a Chapter 13 bankruptcy,
they must repay 100% of their secured debts while unsecured creditors
may not be getting 100% of their debt paid. When the case is over, any
debt owed to an unsecured creditor is discharged.
Even though mortgages are secured debts, Chapter 13 allows some individuals
to get rid of their second mortgage by filing a Motion with the Court
asking to “avoid” the second mortgage by making it an “unsecured”
debt under an equity theory.
Understand all your options available before filing for bankruptcy. Nobody
wants to file a bankruptcy, but if you do file, our
Rockville Chapter 13 attorney can ensure that the bankruptcy is tailored for your future success.
