Chapter 13 Attorney in Savannah, Georgia

Bankruptcy is a legal process that allows individuals and businesses dealing with overwhelming debt to manage or eliminate their debts and work toward a fresh financial start. It is not an admission of failure, but rather, a practical way for individuals and businesses to get back on their feet.

Among the different types of bankruptcy, Chapter 13 allows individuals with a regular income to keep their assets and develop a plan to repay all or part of their debts over a specific period. 

If you're suffering from unmanageable debt, Chapter 13 bankruptcy could provide the debt relief you need. At Pytte Law, I have twenty-five years of experience in helping people relieve financial burdens, protect their property, restore their credit ratings, and work toward securing a bright financial future.

Located in Savannah and Hinesville, Georgia, I proudly serve clients throughout the state, including Statesboro, Richmond Hill, and Ludowici. 

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, commonly known as a wage earner's plan, offers individuals with a steady income the opportunity to create a structured plan for repaying all or part of their unsecured debts, such as credit card debts, medical bills, and personal loans.

Under Chapter 13, debtors propose a repayment plan that outlines scheduled installments they will make to creditors over a period typically spanning three to five years. This approach provides a systematic way for individuals to manage their financial obligations while working toward more stability. 

Chapter 13 offers advantages over other forms of bankruptcy, particularly Chapter 7 bankruptcy, by allowing debtors to avoid asset liquidation and granting them the opportunity to reschedule secured debts over the term of their proposed plan. An experienced bankruptcy attorney can help you understand the benefits of Chapter 13 bankruptcy and determine whether it is the right option for your financial situation. 

What Does Chapter 13 Do?

Chapter 13 bankruptcy offers a variety of benefits that are designed to provide debt relief and a path to financial stability, including: 

• Stops Foreclosure Proceedings: Filing for Chapter 13 immediately halts foreclosure on your home, giving you a chance to catch up on missed payments throughout your repayment plan. 

• Consolidates Debts: It consolidates your debts into a single repayment plan, making it easier to manage payments to creditors and work toward debt relief. 

• Prevents Repossession of Assets: Chapter 13 protects valuable assets, like a car, from being repossessed, allowing you to reorganize your finances without losing essential property. 

• Stops Wage Garnishments and Collection Calls: Upon filing, an automatic stay goes into effect, which requires all creditors to cease all collection efforts, including wage garnishments and incessant phone calls. 

• Allows Retention of Assets: Unlike Chapter 7, which requires the liquidation of assets to pay off debts, Chapter 13 allows you to retain your assets while working through your repayment plan. 

• Discharges Certain Debts: After the successful completion of the repayment plan, Chapter 13 may discharge your remaining unsecured debts, freeing you from certain financial obligations that were not fully repaid under the plan. 

• Improves Credit Score Over Time: Although filing for bankruptcy will initially impact your credit score, your credit score will improve over time as you consistently make payments and reduce your debt. 

Understanding these key functions of Chapter 13 bankruptcy can help individuals facing financial difficulties see a path forward and make informed decisions about their financial future. 

What Doesn't Chapter 13 Do?

While Chapter 13 bankruptcy offers several significant benefits, it's important to recognize its limitations and what it doesn't do:  

• Does not eliminate all kinds of debts: Certain obligations such as student loans, alimony, child support, and certain taxes cannot be discharged under Chapter 13.  

• Does not protect cosigners on your debts: While the automatic stay applies to the debtor, creditors can still pursue collection actions against any cosigner not included in the bankruptcy filing. This could potentially strain relationships if the cosigner is a spouse, family member, or close friend who was helping you manage your debt. 

• Does not prevent future foreclosure: Mortgage lenders can still foreclose on your home if you cannot make your mortgage payments after filing. While Chapter 13 can stop foreclosure proceedings temporarily, maintaining your home requires that you continue making regular mortgage payments in addition to your repayment plan. 

Understanding the limitations of Chapter 13 bankruptcy is crucial for individuals considering this as an option for debt relief. It offers a pathway to financial stability for many, but it's essential to have a clear understanding of what Chapter 13 can and cannot do before proceeding. 

When Is Chapter 13 a Good Debt Relief Option? 

Chapter 13 bankruptcy is an excellent option for individuals who find themselves trapped under overwhelming debt but still have a regular income that is sufficient to manage a repayment plan. It often appeals to those who wish to protect their assets from liquidation. Unlike Chapter 7, where certain assets might have to be sold to pay off creditors, Chapter 13 allows individuals to retain their property, making it a suitable option for those with personal or real property they wish to keep.  

It is particularly beneficial for those who wish to avoid foreclosure on their homes and are looking for a way to catch up on missed mortgage payments over time. Additionally, it can be a great choice for individuals with significant amounts of non-dischargeable debts, such as certain taxes or student loans, as a structured repayment plan can help manage these debts more effectively. 

Deciding to file for Chapter 13 bankruptcy is a significant financial decision. At Pytte Law, I can help you prepare the necessary documentation and devise an optimal repayment plan tailored to your unique financial situation. 

How Do I Qualify for Chapter 13?

To qualify for Chapter 13, you must meet specific criteria that demonstrate your ability to adhere to your proposed repayment plan: 

• You must have a regular income. This can be in the form of employment, business operations, seasonal work, royalties, or even from Social Security or pensions, and it indicates that you have the means to pay off your debts over time. 

• Your total secured and unsecured debts must not exceed certain limits. As of 2023, unsecured debts—like credit card bills or medical expenses—must be less than $419,275, and secured debts—such as mortgages and car loans—must be under $1,257,850.  

• You must be up-to-date on your tax filings. You must have filed federal and state income tax returns for the last four years before your bankruptcy filing. If you haven't, your case could be delayed or dismissed. 

• You must have completed a credit counseling course. This course must be from an approved agency and must be completed within 180 days before filing. It is designed to make sure you understand the implications of bankruptcy and have explored all other debt-relief options. 

Qualifying for Chapter 13 bankruptcy can seem daunting, but it's structured to ensure that it's a viable path for those who can genuinely benefit from a debt restructuring plan. At Pytte Law, I can guide you through the qualification process, help gather the necessary documentation, and provide the legal advice you need to work toward financial stability.