Maui Chapter 13 Bankruptcy Attorneys

Proudly Helping Clients Tackle Burdensome Debt

If you are deep in debt and unsure of what to do, then filing for Chapter 13 bankruptcy can put an end to creditor calls and put you on the right track to clear your debt. Sometimes referred to as the “Wage Earner’s Plan,” Chapter 13 enables people who have regular income to form a plan to efficiently repay all their debts. Our financial restructuring attorneys in Maui can help guide you through this process and develop a repayment plan tailored to your situation.

Chapter 13 Bankruptcy includes statements where debtors can propose a repayment option to make installments to their creditors over three to five years. The key thing about Chapter 13 is that in no way does the debtor lose any property. Additionally, no assets are taken by a trustee or administered to repay creditors in Chapter 13 bankruptcy.

If you file for Chapter 13 bankruptcy and your current income is less than the state median, then the minimum period to pay the debt will be three years unless you are approved for a longer period. If your current income is higher than the state median, then the plan can be extended for five years. Under no circumstances will the period be longer than five years. Within the specified period, the law forbids the creditors from collecting anything from debtors.

What Are the Advantages of Chapter 13 Bankruptcy?

One of the key aspects of Chapter 13 is that debtors with real property delinquencies can cure those arrearages inside the plan and prevent the mortgage company from foreclosing. Also, unlike in Chapter 7, car payments can oftentimes be favorably lowered on a monthly basis with Chapter 13.

How Chapter 13 Bankruptcy Can Save Your Home in Maui

A Chapter 13 bankruptcy establishes a payment plan whereby you can catch up with your secured debt obligations (including a mortgage). Once the plan is approved by the court, you will make one single monthly payment to the bankruptcy trustee. This repayment plan will include provisions to help pay off any accumulated mortgage arrearages (the back amount owed). Chapter 13 bankruptcy is the cheapest, most sure-fire way to save your home and other real property from foreclosure.

Chapter 13 bankruptcy also benefits homeowners who have a second mortgage and owe more money on the primary mortgage than the property is worth. In this situation, the second mortgage or line of equity may be eligible for a complete discharge, known as a “lien strip.” This can be extremely helpful for homeowners whose property value has dropped in recent years.

How Chapter 13 Bankruptcy Can Save Your Vehicle

If you owe more than the actual value of your vehicle, then filing for bankruptcy might qualify you for what is called a “cramdown.” A cramdown reduces the amount owed to the car’s actual value because this is the amount that the lender would receive if it was repossessed and sold at an auction. To qualify, you must have purchased the car more than 2 ½ years before filing for bankruptcy, along with other requirements. Our dedicated Maui Chapter 13 bankruptcy attorney can review the facts of your situation to see if a cramdown is available for you.

Eligibility for Chapter 13 Bankruptcy

Chapter 13 gives relief to the debtor unless their debt amount is more than a certain amount. It means that the debtor must have:

  • Regular income
  • Unsecured debts of $419,275 or less
  • Secured debts of $1,257,850 or less

These amounts are adjusted periodically as the Consumer Price Index changes.

Does Chapter 13 Impact Your Credit Score?

Although your credit is going to take a hit when you file for bankruptcy, our legal team at Blake Goodman, PC, Bankruptcy, and Debt Settlement Attorneys can help you get your credit back up far quicker than you think. We offer a 720 Credit Program that is meant to help our clients repair their credit scores after bankruptcy, so they can take full advantage of reorganizing their finances. With our 720 Credit Program, you’ll be back up to 720+ credit and back in good standing in 12-24 months. Many of our clients even find finance options for their homes and vehicles while still in the Chapter 13 process.

If you are still concerned about your future credit options, such as future interest rates, then come in and discuss your concerns with us. We may be able to help with any fears you still have.