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Chapter 13 Bankruptcy in Richmond, VA

At the Agarwal Law Firm, we believe that our valued community members work hard to provide the best life possible for themselves and their families. We also recognize that there are forces beyond people’s control that can cause an unexpected financial downturn. What can be particularly frustrating is getting up every day, earning a salary and continue to fall deeper into debt. It may feel like swimming in quicksand.

That’s precisely why Chapter 13 bankruptcy laws were created. The process provides a pathway for good people not to lose everything while getting out of debt. If you are earning a living that doesn’t keep pace with living expenses and outstanding liabilities, contact our Richmond, VA, office and get the financial relief you deserve. A Chapter 13 has many tools not available in a Chapter 7 bankruptcy like restructuring mortgage debt, stopping foreclosures, restructuring other secured debt like vehicle payments, and restructuring tax, student loan and child support debt.


What is Chapter 13 Bankruptcy?

Although many people consider Chapter 7 the primary process to wipe out debts, Chapter 13 bankruptcy can be a viable alternative if you have valuable assets to protect and. some way of repaying the debt. Often called “wage earners” bankruptcy, this filing allows you to create a manageable repayment plan and discharge certain debts without losing things such as your home, automobile and others.

It’s important to understand that Chapter 13 is not a quick financial fix. With the guidance of one of our bankruptcy lawyers, a three to five-year repayment plan will be crafted and submitted to the court for approval. A limited percentage of your disposable income — after living expenses — will be assigned to debt repayment. Depending on your earnings, expenses and debts, repayment funds will be distributed to all or some of your creditors.

Chapter 13 does not promptly discharge debt, but it stops collections immediately and gives you some breathing room. In fact, it may not remove all of a filer’s debts, but what it does do is create a way to maintain ownership of items you might not be able to hold on to in a Chapter 7 filing. It can also help you with catching up on arrears on child support, mortgages, car payments and tax debt, and it can sometimes prevent student loans from collecting against you for up to five years.

Once the repayment plan has run its course, soft debts such as credit cards and medical bills may be wiped out. If you meet the qualifications for a Chapter 13 bankruptcy filing, our bankruptcy law firm can shepherd you through the process.


Who Can File Chapter 13?

Chapter 13 bankruptcy proves to be an attractive option for everyday people who are drowning in debt but have assets worth protecting. It is also a great choice for people who have a previous Chapter 7 filing and cannot file another Chapter 7.  Most people qualify for a Chapter 13. What is different for each person is what you may have to pay back and what debts are discharged.

Another common reason that struggling people opt for Chapter 13 is that their income exceeds the Chapter 7 means test. You are also generally required to fulfill a credit counseling requirement and include proof with the initial paperwork or soon after in some cases. Although a Chapter 13 takes a few years to complete, it provides actionable long-term benefits. Depending on your income and assets you could pay as little as three percent on your unsecured debt and restructure your student loans, mortgage payments, car payments and tax debt to make an affordable payment plan.


Benefits of Filing Chapter 13 Bankruptcy

To say there is a valuable upside to a successful Chapter 13 bankruptcy would be something of an understatement. The moment our bankruptcy lawyer files the paperwork with the court will be the first step toward renewed financial health and reduced stress. These are benefits you can expect.

  • Peace of Mind: Once Chapter 13 has been filed, creditors will be required to stop the sometimes-harassing phone calls, emails and text messages. Some outfits can be excessively aggressive, and this puts an end to unwelcome contact and intrusions into your life.
  • Stabilize Finances: A court-approved repayment plan includes all of your anticipated living expenses. It would be a percentage of your discretionary income that is applied to debt repayment. Filers enjoy a set budget during the repayment process.
  • Unsecured Debts: Those debts that are not supported by collateral are generally discharged at the conclusion of the process.
  • Secured Debts: Eligible filers may be able to lower the total amount owed on certain secured debts. You can also catch up in back payments on mortgages, car payments, furniture bills and tax debt within the plan. If you last financed your vehicle more than 2.5 years ago, we can lower the amount paid on the vehicle to just what the vehicle is currently worth.
  • Lower Monthly Payments: A court-approved repayment plan often calls for lower monthly installments that are realistic given the filer’s financial hardship.
  • Home Ownership: The Chapter 13 filing halts mortgage lenders from foreclosing on your primary residence. You will be given an opportunity to keep your home under terms set in the repayment plan. It can also help stall foreclosure so you can apply for a loan modification in some instances.  In some cases, we can wipe out an entire second mortgage if there is no equity in the property.
  • Protects Co-Signers:Under federal law, third parties who co-signed for a loan may also enjoy protection from creditors.
  • Affordable:Chapter 13 bankruptcy proceedings are a cost-effective way to reduce debt and keep valuable assets.

One of the hesitations that people in severe financial straits have is worrying that once a court-mandated repayment plan has been established, your economic circumstances could change. While this is undoubtedly a conscientious way of thinking about repayment, the courts understand that the process does not happen in a vacuum.

Forces beyond your control such as job loss at no fault of your own, a sudden debilitating illness or other hardships can upend your intentions. In such cases, the court may be open to revisit the plan and make reasonable changes. At the end of the day, it’s in everyone’s best interest to see the Chapter 13 process through to a successful conclusion.


Chapter 13 Bankruptcy Solutions in Richmond, VA

If you fall behind on your mortgage, credit card bills and other debts, you may qualify for Chapter 13 bankruptcy relief. At The Agarwal Law Firm, we provide everyday Virginians with affordable bankruptcy representation and a financial fresh start. Call or contact our Richmond law firm to schedule a free Chapter 13 bankruptcy consultation with our lead attorney today.


Frequently Asked Questions

What Qualifies You for Chapter 13 Bankruptcy?

A person may qualify for the Chapter 13 bankruptcy if they have a way to make the payments and are unable to meet current debts. If you earn below the state’s median income, a three-year repayment plan may be approved. Struggling with high debt while making more than the state’s average income may result in a five-year plan.

How Much to File for Chapter 13 Bankruptcy in Richmond, VA?

Filing for Chapter 13 remains one of the more affordable debt relief options. At the Agarwal Law Firm, the cost of the process runs $500. That price includes filing fees, credit counseling, debtor education, credit report, and initial attorney fees. The balance of the attorneys’ fees which is set out by Department of Justice guidelines is paid out and built into the payment plan.

Does Filing for Chapter 13 Bankruptcy Affect Your Credit?

If you are in a position to file a Chapter 13 bankruptcy, in all likelihood your credit is low or in jeopardy. Credit is very personal to each individual. You will rebuild your credit by making your plan payments and once the case is completed, most filers will see a substantial rise in their credit score after a couple of months.  Although it can stay on your credit report for up to 7 years, it does not mean that it will impact your credit for the whole 7-year period.

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