Chapter 13 Bankruptcy Attorney in Oklahoma City, Oklahoma

There is a common misconception that bankruptcy is synonymous with financial failure. However, that's not true. Bankruptcy is a strategic tool that allows individuals and businesses dealing with overwhelming debt to effectively manage or eliminate their existing debts.

Chapter 13 bankruptcy, specifically, provides a route to debt relief for those with a regular income who can commit to repaying their debts over a three-to five-year period. 

At Deborah Brooks & Associates P.C., I am experienced in helping my clients seek debt relief by providing them with the tools they need to file for Chapter 13 bankruptcy. I serve clients throughout Western Oklahoma, including cities like Oklahoma City, Norman, Edmond, and Lawton. 

Understanding Chapter 13 Bankruptcy 

Chapter 13 bankruptcy, also known as the wage earner's plan, allows individuals with a steady income to reorganize their debts into a structured repayment plan. This plan helps them repay all or part of their unsecured debts, including personal loans, credit card debt, and medical bills. 

Under Chapter 13, debtors will draft a court-approved repayment plan that details the installments they will pay over three to five years. This offers a structured way for those with overwhelming debt to manage their finances and work toward long-term financial stability. 

At Deborah Brooks & Associates, P.C., I am committed to helping my clients understand the benefits of filing for Chapter 13 and develop a repayment plan that respects their financial situation and future goals.

What Does Chapter 13 Do? 

Chapter 13 bankruptcy is a powerful tool for restructuring your finances and it offers various unique benefits that are not available under Chapter 7 bankruptcy. These include: 

• Stops foreclosure proceedings: Filing Chapter 13 immediately halts foreclosure on your home, giving you a chance to catch up on missed payments. 

• Consolidates debts: Chapter 13 allows you to consolidate your debts into one manageable repayment plan, simplifying your payments to creditors. 

• Prevents asset repossession: Chapter 13 helps prevent the repossession of essential assets, such as your house and vehicle, as long as you can keep up on payments. 

• Stops collection actions: Once you file for Chapter 13, an automatic stay goes into effect which requires creditors to stop all collection efforts. This includes wage garnishments and collection calls, letters, or emails. 

• Protects your assets: Unlike Chapter 7, which requires you to liquidate your assets to pay back creditors, Chapter 13 allows you to keep your assets while following your repayment plan. 

• Discharges some debts: After completing the repayment plan, Chapter 13 may discharge your remaining unsecured debts, freeing you from certain financial obligations. 

• Improves your credit over time: While filing for bankruptcy will initially affect your credit score, you can improve it over time by making consistent payments under your repayment plan. 

Knowing how Chapter 13 can work for you can help develop a plan to manage your overwhelming debt. As an experienced bankruptcy attorney, I can help you determine whether filing for Chapter 13 is the right debt relief option for you. 

What Doesn't Chapter 13 Do? 

While Chapter 13 offers numerous benefits for managing significant debt, there are some limitations. These primarily include: 

• Does not discharge all debts: While many of your unsecured debts can be discharged under Chapter 13, it does not discharge certain secured debts, such as child support, alimony, most tax debts, student loans, and debts incurred through fraud. 

• Does not automatically protect co-signers: Chapter 13 bankruptcy stops creditors from collecting from the debtor but does not protect co-signers. Creditors can still go after co-signers for payments, although Chapter 13 is less risky for them than Chapter 7. 

• Cannot prevent future foreclosure or repossession:- If you miss mortgage payments after filing, lenders can still foreclose on your house. Chapter 13 may pause foreclosure, but you must keep up with mortgage payments and your repayment plan to keep your home. 

Chapter 13 Bankruptcy FAQ 

How do I know if I qualify for Chapter 13 bankruptcy? 

Chapter 13 bankruptcy is designed for individuals with a regular source of income who can commit to a repayment plan. To qualify, your unsecured debts must total less than $419,275 and your secured debts must be below $1,257,850, as per current federal limits.

These limits are periodically adjusted. Additionally, you must have filed your tax returns for the previous four years. 

How does filing for Chapter 13 affect my credit score? 

Filing for Chapter 13 bankruptcy will have an initial negative impact on your credit score. The bankruptcy will remain on your credit report for seven years from the filing date.

However, as you make consistent payments under your repayment plan, your credit score can begin to improve. Over time, successfully completing the plan can provide a more stable financial footing and help rebuild your creditworthiness. 

What happens if I miss a payment under my Chapter 13 plan? 

Missing a payment in your Chapter 13 repayment plan can have serious consequences. If you cannot make a payment, it’s crucial to reach out to a bankruptcy attorney immediately.

The court may dismiss your case if you fall behind on your payments, which would end the automatic stay protecting you from creditors. In some cases, you might be able to modify your repayment plan, but it requires court approval. 

How do I know if Chapter 13 is a good option for debt relief? 

Chapter 13 bankruptcy is particularly suited for individuals who are struggling with debt but have a steady income that can allow them to develop a structured repayment plan.

This type of bankruptcy is particularly suitable for those who wish to avoid foreclosure, stop vehicle repossession, and keep valuable non-exempt property that might otherwise be lost in a Chapter 7 filing. It’s also a viable solution for individuals who have previously filed for Chapter 7 bankruptcy but require further debt relief.