Bankruptcy can happen to even the largest organizations. For instance, General Motors filed for chapter 11 bankruptcy in 2009. They are now a very healthy and profitable business with far less debt. Some hard decisions had to be made, but it was worth it.
Chapter 13 – The Reorganization Bankruptcy for Individuals
Individuals have a similar bankruptcy option when they can’t afford their current payments but could afford to make smaller debt payments. If someone has fallen behind in paying their mortgage or car payment and is facing foreclosure, chapter 13 bankruptcy may be a viable solution. Once someone falls two or three payments behind, lenders aren’t interested in working with you. If you can’t pay all of the late payments immediately, they foreclose. Many people in this situation have talked to a bankruptcy attorney in Rockville.
Chapter 13 is most often used by people who are desperately trying to keep their home or other secured debt such as a car. Often, homeowners will have a fair amount of equity they have built up over the years and don’t want to lose it. They may have children and don’t want to drag them out of their schools and away from their friends. At this point, someone should call a bankruptcy attorney in Rockville immediately to discuss their options.
Once a bankruptcy case has been filed with the court, foreclosure and other collection attempts must stop. An affordable repayment plan for back payments and certain other debts will be worked out. It will be necessary to live on a strict budget and remain current with the mortgage but, after three to five years, the payment plan will be completed. The homeowner will have succeeded in saving the home and remaining balances on other debts will be discharged.
Qualifying for Chapter 13
To file for chapter 13, it’s necessary to have a steady income since this involves a repayment plan. Secured debt such as the mortgage cannot exceed $922,975, and unsecured debts such as medical bills and credit cards can’t be greater than $307,675. Before filing for bankruptcy, credit counseling from an approved counseling agency is also required.
When you’re facing foreclosure, call a bankruptcy attorney in Rockville before it’s too late. Attorney Laura Margulies has been providing exceptional bankruptcy services in the are of Maryland and DC for more than 25 years.
