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.
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.
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.
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.
Getting 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.
