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Providing Peace of Mind Through Chapter 7 and Chapter 13 Bankruptcy

Chapter 13 Bankruptcy Attorney Toledo, Ohio

Toledo Chapter 13 Bankruptcy Lawyer

There are two different approaches one can take to filing for personal bankruptcy: Chapter 7 and Chapter 13. If you’ve heard about the court taking your possessions and selling them off, you’ve heard about Chapter 7 bankruptcy. Chapter 13 is also appropriate for those whose gross income is too high to qualify for a Chapter 7, or for those who filed a Chapter 7 less than 8 years ago.
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Secured vs. Unsecured
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Your Chapter 13 bankruptcy attorney in Toledo, Ohio will categorize your creditors as either secured or unsecured. Secured creditors tend to have collateral, and unsecured creditors do not. Collateral is something valuable that is pledged by a borrower to a lender as a guarantee that a loan will be repaid.  If the borrower defaults on the loan, the predetermined collateral must be forfeited to the creditor. A creditor may also be secured if they have a judicial lien against you.
Here are some examples of secured creditors: the financial institution that holds your mortgage or car loan, leasing companies, rent-to-own companies, and finance companies. Conversely, here are some examples of unsecured creditors: credit card companies, medical institutions, student loan providers, and utility companies.
In order to qualify for Chapter 13 bankruptcy, your total secured debts cannot exceed $1,184,200 and your total unsecured debts cannot exceed $394,725. For this reason, it’s important to understand the difference between secured and unsecured creditors.
If you’re interested in filing for bankruptcy with a Chapter 13 bankruptcy attorney in Toledo, Ohio, it must first be determined that your secured and unsecured debts burdens are low enough for you to qualify.
Creating a Plan
When you work with a seasoned Chapter 13 bankruptcy attorney in Toledo, Ohio, they will help you to create a long-term payment plan. In this case, long-term means over the course of 3-5 years. The creation of a payment plan is the main difference between Chapter 13 bankruptcy proceedings and those of Chapter 7.
When creating the payment plan, each of your outstanding debts will be placed into one of three categories: secured debts, unsecured priority debts, or general unsecured debts. Each type of debt is treated differently.
You must continue to make your regular payments on secured debts, such as mortgage payments or car loans. Your payment plan must also include the repayment of any arrearages on those debts if you plan to keep the collateral. An arrearage is the amount by which you’ve fallen behind on your loan payments. In other words, your secured debts will be repaid in full.
You are also required to repay your unsecured priority debts in full. Examples of unsecured priority debts include: child support, alimony, wages you owe to employees, certain tax obligations, and your Chapter 13 attorney’s fees.
General unsecured debts do not need to be repaid in full. You are only responsible for paying a percentage of what you owe. The percentage that you’re responsible for paying is determined by the amount of disposable income that remains after prioritizing the repayment of your secured and unsecured priority debts. Examples of general unsecured debts include: credit card debts, personal loans, medical bills, and utility bills.
Follow the Plan
After creating your payment plan with the help of a Chapter 13 bankruptcy lawyer in Toledo, Ohio, payments will be automatically deducted from your paychecks. This guarantees that you follow your payment plan and prevents you from misusing your income.
Upon completion of your payment plan, you will be discharged from your remaining debts, and your creditors can no longer come after you in search of payment.
Schedule a Free Consultation
Contact our bankruptcy attorney in Toledo, Ohio at 567-825-3635 or schedule a free consultation.