Chapter 13

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Waco Chapter 13 Bankruptcy Attorney

Helping Clients Throughout Central Texas With Debt

When you are considering bankruptcy in Waco, Killeen, or elsewhere in Texas, Erin B. Shank and her paralegals are here to help. Erin has been practicing bankruptcy law for  40 years, and her services are  dedicated exclusively to bankruptcy law in Killeen & Waco.

Erin is committed to your safety and your convenience:

  • She offers virtual and remote services with no in-person meetings. You can discuss your entire financial situation and get answers to your financial questions in a free telephonic conference.
  • Erin electronically gathers the bankruptcy documents you need.
  • Erin meets with you via Zoom to review all your bankruptcy paperwork to ensure it is perfect before it is filed.
  • Erin obtains your signature touch-free method ─ a simple email sent to your email account.
  • Erin represents you in a telephonic court appearance with the Trustee.

Erin also offers several free videos that answer questions her clients frequently ask. Click here to watch any videos where Erin answers typical bankruptcy and debt relief questions. Ready to take the next step? Get in touch with Erin today. Contact her online or call her now to schedule your initial free consultation.

Learn more about how we can help you by contacting us online or calling (254) 690-4110 today!

What Is Chapter 13 Bankruptcy In Texas?

Also known as “reorganization bankruptcy”, Chapter 13 is a legal pathway that allows you to restructure your debt so that it is more manageable. If you file for Chapter 13 bankruptcy in Texas, you will be able to create a repayment pan spanning 3 to 5 years that allows you to repay your debts. When the plan is completed, any outstanding debts are forgiven and you will be free of debt and you can have a fresh financial start.

How Does a Chapter 13 Bankruptcy Repayment Plan Work?

If you determine that Chapter 13 is the right choice for you, Erin Shank will prepare all of the bankruptcy documents needed to file your case.  You supply Erin with bank statements, pay stubs, and a list of your assets and creditors that are the core required documents for Erin to prepare and file a Chapter 13 bankruptcy case for you. 

Once your case is filed, a stay against all lawsuits, foreclosure, and collection activities is automatically put in place. This automatic stay is in place upon filing bankruptcy cases under Chapters 7, 11, 12, and 13 of the Bankruptcy Code. 

Within two weeks of filing the bankruptcy petition, your remaining documents, including your Chapter 13 repayment plan, are due to be filed. Your wages and income tax refunds are garnished so your plan payments can be made. You have been in an active bankruptcy case for three to five years. During that time, you are unable to work to restore your credit and can not incur debt. For example, suppose you need to replace a vehicle due to an accident or normal wear and tear. In that case, this will be virtually impossible because you have been in an active bankruptcy case for three to five years, and lenders do not want to loan money to individuals in an active bankruptcy case. For these reasons, Erin considers a Chapter 13 case a last resort. If you have been told that Chapter 13 is the only way to address your financial challenges, please see Erin B. Shank's firm for a free initial consultation.  

What is the difference between Chapter 13 and Chapter 7?

Chapter 13 is a type of case in which you are in an active bankruptcy case for three to five years. You cannot purchase assets are incur debts for that entire period. Your wages and income tax refunds are garnished to repay your creditors for three to five years. Another bankruptcy attorney, the Chapter 13 Trustee, is paid a 10% commission on each payment you make to your creditors. You must report any income changes during the entire three to five-year period so that the Trustee can move to increase your monthly wage garnishment. Chapter 13 is about financial prison.

Texas is a non-garnishment state. That means most creditors, excluding child support, student loans, taxes, and some out-of-state creditors, cannot garnish your wages. However, when you file a Chapter 13 bankruptcy case in Texas, you ask a federal judge to garnish your wages to pay your creditors even though you live in a non-garnishment state.

Erin uses Chapter 13 as a last resort. She will attempt to find all other viable alternatives, including alternatives available under non-bankruptcy law, to address your financial problems. However, if someone has told you that Chapter 13 is the only way to manage your financial situation, don't hesitate to contact Erin for a free, virtual initial consultation to discuss your options.

Is Chapter 13 the only option to retain my home if I am behind on my mortgage and facing foreclosure?

No. If you file Chapter 13 to save your home, your mortgage payments will increase, not decrease, making it more probable that you may lose your home. This is because the Chapter 13 Trustee makes your mortgage payments through wage garnishment and charges a 10% commission on each monthly mortgage payment he makes for you. For instance, if your monthly mortgage payment is $1,000.00 and you file a Chapter 13 case, your mortgage payment will be $1,000.00 plus the 10% commission resulting in a new mortgage payment of $1,100.00. Additionally, all your past due fees, plus interest plus another 10% commission to the Chapter 13 Trustee, are garnished from your wages. Therefore, a typical client with a house payment of $1,100.00 can see their monthly mortgage increase to $2,500.00 or $3,000.00 in a Chapter 13 case.

Therefore, Erin tries every alternative other than filing a Chapter 13 case to save homes for clients that are delinquent on their mortgage payments. She files Chapter 7 cases to stop the foreclosure and applies for a home loan modification to cure her clients= late mortgage payments. In those modification applications, she also requests and obtains reductions in mortgage interest rates and extensions of the term of the mortgages to reduce her clients= mortgage payments rather than increasing them through a Chapter 13 bankruptcy case filing.

If someone has told you that Chapter 13 is the only way to retain your home, don't hesitate to get in touch with Erin B. Shank for a free, virtual initial consultation to get a second opinion from an attorney with four decades of experience in bankruptcy law. Erin practices bankruptcy law exclusively and is exceptionally qualified to represent you and address your financial challenges. 

Chapter 13 Eligibility Rules

Unfortunately, Chapter 13 is not an option for everyone. When you file your bankruptcy petition, you must be able to demonstrate that you meet the following requirements to be considered eligible:

  • You must earn a regular income.
  • You must be current on filing your taxes.
  • You must not have more than $2,750,000.00 of debt (including your home loan)
  • You must not have received a discharge for a Chapter 13 case filed within the past two years or a Chapter 7 case filed within the past four years.

Chapter 13 May Not Be Your Best Option

Chapter 13 is not the best option for most people with financial problems. It is a three to five-year wage and income tax refund garnishment. If you are considering a Chapter 13 bankruptcy, there are possible alternative ways to handle your financial situation.

If you have decided to pursue a Chapter 13 bankruptcy, speak with bankruptcy attorney Erin B. Shank, and get a second opinion. Erin may be able to develop a plan that gets the results you want without the negatives of a Chapter 13 case. However, before committing to a three to a five-year active bankruptcy case, ensure you have explored all of your alternatives!

Dismissal and Discharge Under Chapter 13 – What’s the Difference?

Under Chapter 13, your case may be dismissed or discharged. It is important that you understand the difference:

  • Dismissal: A dismissal usually occurs when the court throws a case out for several reasons. The vast majority of Chapter 13 cases are not successful and result in dismissal. This results in a bankruptcy filing appearing on your credit report. However, you still owe all your creditors because your case was dismissed, not discharged.
  • Discharge: A debtor receives a Chapter 13 discharge only if they make all of the Chapter 13 plan payments over the three to five-year plan. Your case is dismissed if you don=t surrender virtually all of your income tax refunds to the Trustee during that period. If you are not current on all of your secured debt when you make your final Chapter 13 Plan, you will not be discharged from your debts. If you have student loans, they are not paid during Chapter 13. Your student loan is more significant when you exit Chapter 13 because default interest rates on those student loans continue. At the same time, you pay the rest of your creditors in your Chapter 13 case. A Chapter 13 discharge is tough to achieve because people's financial situations change over three to five years - they lose jobs, get divorced, get sick, etc. This is why Chapter 13 debtors receive a discharge much less frequently than individuals who file Chapter 7 cases in which a release is almost always granted. This is why Erin Shank points to Chapter 13 bankruptcy cases for her clients as a last resort.

Talk to a Waco & Killeen Chapter 13 Bankruptcy Lawyer Now

Are you considering a Chapter 13 bankruptcy? Do you need a Chapter 13 bankruptcy lawyer in Waco, Texas, Killeen, Texas, or any surrounding areas? Then, make the right move by contacting Erin B. Shank today for a free initial consultation. 

Erin is committed to your safety and convenience. She offers a 100% virtual process, including telephonic and Zoom consultations, electronic document gathering, digital signatures, and e-filing. As a result, you rarely have to leave the comfort and safety of your own home when you file bankruptcy with the law firm of Erin B. Shank, P.C.

Erin has been practicing bankruptcy law in Texas for 40 years,  and her practice is devoted entirely to bankruptcy. Erin has the skills and experience you deserve. For a free virtual consultation, contact Erin online or call her today.

Call (254) 690-4110 or contact us online today!

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