Chapter 13 Bankruptcy Law
Washington, DC • Virginia • Maryland

Chapter 13 bankruptcy (Adjustment of Debts of an Individual with Regular Income), often referred to as wage earner bankruptcy, is designed for people with a regular income who want to, but are unable to, pay off their debts. Harris S. Ammerman routinely helps people struggling to pay their bills file for Chapter 13 bankruptcy.

Under Chapter 13 bankruptcy, unlike Chapter 7 bankruptcy, debtors are allowed to keep all their possessions. Debtors are able to consolidate their debts and make payments over a three to five year period. During this time, creditors are prohibited from beginning or continuing collection actions. Some of the debts that can be consolidated under Chapter 13 bankruptcy include outstanding mortgage payments, auto payments, student loans, credit cards, and any other unsecured debts.

BIG CHANGES IN BANKRUPTCY LAW

A major reform of the bankruptcy system took effect on October 17, 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 presents additional challenges to people facing financial problems. 

The new law marks the biggest change to bankruptcy law since 1978. It prohibits some people from filing for bankruptcy altogether. The law makes it harder for those who qualify to come up with manageable repayment plans and provides fewer protections from collectors than the prior law. Nevertheless, you still have many legal options to resolve your financial problems.

Harris S. Ammerman is committed to assisting clients in financial hardship. Our legal services, including debt relief agency expertise, will be available to anyone who is over-burdened by debt. If you have questions regarding Chapter 13 bankruptcy, call our Washington area bankruptcy attorneys for a free phone consultation.

Stop Home Foreclosure

Filing for Chapter 13 bankruptcy can prevent or terminate the foreclosure of your home. Under Chapter 13 bankruptcy, a payment plan will be developed that will allow you to keep your home despite mortgage arrears. You will still have to make regular monthly mortgage payments. However, while under a Chapter 13 bankruptcy plan, mortgage companies cannot foreclose or attempt to collect past due mortgage payments.

Prevent Your Car from being Repossessed

Under Chapter 13 bankruptcy your car cannot be repossessed. Automobile payments are part of the Chapter 13 bankruptcy debt consolidation. Any back payments and future payments will be made to the Chapter 13 bankruptcy trustee who will make payments to the finance company. In some cases, we can recover repossessed automobiles.

Consolidate Student Loans

Under Chapter 13 bankruptcy student loans can be consolidated along with your other bills. Unlike Chapter 7 bankruptcy, Chapter 13 student loan consolidation allows you to end harassing collection actions and garnishments. Under a Chapter 13 bankruptcy payment plan student loans can be paid off over three to five years as part of the loan consolidation plan.

Protect Cosigners

If a friend or family member has cosigned for an automobile or other loan, filing for Chapter 13 bankruptcy can prevent or end collection actions against you and your cosigner. Once Ammerman & Goldberg files your Chapter 13 bankruptcy petition, your cosigners receive the same protection from creditor collections that you receive. We can include your cosigned debts as part of the Chapter 13 debt consolidation plan.

Be Aware of Refinancing

Chapter 13 bankruptcy can protect the equity you have built up in your home. Refinancing a home in an effort to avoid bankruptcy can add another mortgage payment that in the end may force you to file a Chapter 7 liquidation bankruptcy, rather than a Chapter 13 bankruptcy. An experienced Chapter 13 bankruptcy lawyer can explain the laws and protect you from the negative consequences of additional mortgage payments you can not afford. Our bankruptcy attorneys can help protect you from high interest loans that can eat away at the equity you have in your home.

While the federal courts have exclusive jurisdiction over bankruptcy cases, there are local rules in every jurisdiction. It is important to have an attorney who is familiar with and routinely handles Chapter 13 bankruptcy cases in the jurisdiction in which you live.

For more information about bankruptcy, please visit our other practice centers: Bankruptcy General, Bankruptcy Chapter 7, Bankruptcy Chapter 13, and Bankruptcy Debtor - Creditor.

Our bankruptcy law practice represents clients throughout the District of Columbia, Maryland, and Virginia, including Silver Spring, Bethesda, Rockville, Landover, Greenbelt, Bowie, Upper Marlboro, Arlington, Alexandria, Falls Church, Vienna, Fairfax, and Washington D.C. including Prince George's and Montgomery counties.

Chapter 7 - An Overview

Both individuals and small businesses can find themselves with more debts than they can pay when due. In such cases, filing bankruptcy may provide a solution to what seems like an insurmountable problem. Bankruptcy law provides two basic forms of relief: (1) liquidation; and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A skillful attorney can advise individuals and businesses alike on whether Chapter 7 may be the right choice for them. The bankruptcy lawyer's goals are to help debtors make a fresh start and ensure that creditors get paid.

Because bankruptcy law is primarily federal in origin, it varies little from state to state. The individual states do, however, retain jurisdiction over certain debtor-creditor issues that are not addressed by and do not conflict with federal bankruptcy law, such as which property remains exempt from creditors' claims.

Debts that Remain After a Chapter 7 Discharge

The rules on which debts are discharged, or eliminated, are different depending on which type of bankruptcy is filed. A lawyer experienced in bankruptcy law can advise his or her clients on whether and how particular debts will be affected by a bankruptcy discharge. Generally speaking, in a Chapter 7 proceeding, the following debts are not discharged.

What is a "Discharge" Under Chapter 7?

"Discharge" in the bankruptcy sense refers to clearing the debtor's slate of all, or most, past debts. Although many people expect that filing bankruptcy will wipe out all of their debts, that is not always the case. Bankruptcy only discharges certain debtors of certain debts. The availability of discharge depends on the type of bankruptcy proceeding involved, who the debtor is, and what type of debts the debtor has. An experienced bankruptcy attorney can advise his or her clients as to which debts will be discharged by a Chapter 7 bankruptcy and which debts will remain.

Exempt vs. Non-exempt Property Under Chapter 7

In a Chapter 7 liquidation case, the debtor has to turn certain property over to the bankruptcy trustee so that the property can be sold and the proceeds used to pay off debts. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. Experienced bankruptcy lawyers can answer these and other questions, allay fears, and keep the process moving forward as painlessly as possible.

Non-Bankruptcy Workouts

The term "workout" is used to describe a non-bankruptcy negotiated modification of debt. More simply stated, a workout is an agreement worked out between a debtor and his or her creditors for repayment of the debts between them, which is negotiated without all the procedural complications-and perhaps the stigma-of the bankruptcy process. Lawyers experienced in bankruptcy and debtor-creditor law can advise both debtors and creditors on whether a non-bankruptcy workout may be their best course of action.