How will filing chapter 13 help if I have a judgment against me? 26 Answers as of June 29, 2013

I was involved in a car accident (my fault) that caused more damage than my isurance covered . I was sued and orderd to pay over 10k. I simply cant afford to pay all my debt + this judgment. I don't think my wife and I would qualify for chapter 7. So my question is how would chapter 13 help with the judgment?

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Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Chapter 13 is a payment plan. You qualify if you have regular income.
Answer Applies to: California
Replied: 6/29/2013
Marc S. Stern
Marc S. Stern | Marc S. Stern
I am not sure why you think that you would not qualify for a Chapter 7 but that is a different matter. A chapter 13 will discharge most anything that a Chapter 7 would. Whether you accident would be discharged is another question. Also, did your insurance tender policy limits? You may have a bad faith claim against your insurance company and that is something to think about.
Answer Applies to: Washington
Replied: 6/18/2012
Ross Smith, Attorney at Law
Ross Smith, Attorney at Law | Charles Ross Smith III
Please do assume that you are not eligible for a Chapter 7 Bankruptcy. Have an attorney check. Most the DIY tests I have seen on the internet are misleading. If you do choose to file a Chapter 13, you will have the same relief ordered as in a Chapter 7. Your creditors will be forbidden to call, write sue, garnish or take any other action to collect their claim. The only thing they can do is file a claim for payment through the Chapter 13 plan. If they don't file by the deadline, they lose their claim. If they do file a claim, you can "dispute" it in the Bankruptcy Court. In short, you will be well protected in a Chapter 13. And you will be able to get your driver's license back. I know, you're worried about how much the payment to the plan will be. Stop worrying. It will be a lot less than what will be garnished out of your pay if you don't file. And how are you planning on making a living without a drivers license? Your plan will probably be for 5 years. It will call for your unsecured debts, including the judgment, to be paid at 0% interest. Unsecured creditors will be paid between 1% and 100% of their allowed claim. The percentage is based on your budget listed on Schedules I + J of your petition. It is also determined according to the Form 22C which I salso attached to your petition. The object of the above forms is to show the Bankruptcy Court what "disposable income" you can afford to pay to your creditors. Being protected in a 5 year Chapter 13 plan is a heck of lot better than being pecked to death by your creditors for the rest of your life. So, screw up your courage, find a local bankruptcy attorney that also does Chapter 13s, and go see them. Now. Before you get crippled by a garnishment. The attorney can explain how you pay fees in a Chapter 13 plan. And yes, you can afford the fees.
Answer Applies to: Ohio
Replied: 6/15/2012
Debt Relief Law Center | Roger J. Bus
Chapter 13 has two components: A 100% Plan usually pays all unsecured debt back over 60 months with no interest and no late fees and prohibits further collection activity. A less than 100% Plan (based on your joint income, reasonable expenses, and good faith ability to repay) allows you to pay what you can afford with the remainder to be discharged, depended on the type of ticket that was issued.
Answer Applies to: Michigan
Replied: 6/15/2012
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
While chapter 7 is a complete discharge of all of your debts, chapter 13 of the bankruptcy code allows you to create a payment plan for either three or five years in which you may pay off all of your unsecured and secured debts. This also allows you depending on your income to discount your unsecured debt to a certain percentage depending on your Secured debt and income.
Answer Applies to: Connecticut
Replied: 6/15/2012
    Alvin Lundgren | Alvin Lundgren
    It could, as you can prorate debts in a chapter 13 plan. It will depend on all of your financial factors.
    Answer Applies to: Utah
    Replied: 6/15/2012
    Weber & Phillips, P.A.
    Weber & Phillips, P.A. | John G. Phillips
    When you file Chapter 13, an automatic stay goes into effect against all creditors. In this case, the judgment is just an unsecured debt no different from a credit card or medical bill. In the Chapter 13, we could file a motion to avoid the judgment lien to remove the judgment lien from your property and the case itself would discharge the judgment. Further, they could not garnish you while you are in the case and you may not even have to pay very much of the judgment back, if any, depending on your means test and a few other factors. Unsecured creditors in Chapter 13 are not entitled to interest or late fees so even if you paid the entire debt back, it would be far less over time just due to the lack of interest. The Chapter 13 can also help you to reorganize any and all other debt you may have as well. This is of course based upon my experience in Arkansas and some legal issues can vary greatly between the States, but most of this should be generally applicable.
    Answer Applies to: Arkansas
    Replied: 6/15/2012
    Ryan Legal Services, Inc.
    Ryan Legal Services, Inc. | Kevin Ryan
    You should talk to an attorney who handles only consumer bankruptcy matters. I frequently hear clients say "I don't think I qualify for Chapter 7" because they completed some basic online "means test." In some cases, attorneys who do not handle a lot of bankruptcy cases don't realize the full amount of deductions which apply on the means test, and therefore give outright WRONG advice to the person, setting them on the wrong course. Always ask the attorney for his or her amount of experience in bankruptcy, whether they also handle Chapter 13s, which is usually a sign that the attorney is competent (if they can handle both 7s and Ch 13s) to see all of the potential issues. Yes, there are lawyers who "only" take Chapter cases. You should ask yourself how in the world this lawyer would be able to see the complete picture and the pros and cons of your filing chapter 7 versus chapter 13.
    Answer Applies to: Ohio
    Replied: 6/15/2012
    Steven Alpers | Steven Alpers
    This sounds more like a chapter z than a 13 7 would result in a total discharge.
    Answer Applies to: California
    Replied: 6/15/2012
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    A chapter 13 case can help you pay less than the original amount. If you do not qualify for a chapter 7, you can still pay less than the amount you owe by filing a chapter 13 case.
    Answer Applies to: California
    Replied: 6/15/2012
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    You may compromise the debt and pay what you can afford to pay & discharge the remaining amount owed.
    Answer Applies to: Michigan
    Replied: 6/15/2012
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Chapter 13 may allow you to pay only part of the debt back, depending on your financial condition, and receive a discharge on the part you did not pay back. For the most part, Chapter 13 is based on what you can afford to pay, and what equity you have (what you own).
    Answer Applies to: Indiana
    Replied: 6/15/2012
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    A chapter 13 could force a payment plan, but so could the court where the judgment was entered, avoiding the necessity of a bankruptcy.
    Answer Applies to: Michigan
    Replied: 6/15/2012
    Law Office of Pho Ethan Tran PLLC
    Law Office of Pho Ethan Tran PLLC | Pho Ethan Tran
    Chapter 13 will help in the sense that you will be allowed to make monthly payments to your creditors based on your disposable income for a period of 3-5 years. After the payment plan has been completed, any remaining balance will be discharged by the court. In essence, you will be paying pennies on the dollar.
    Answer Applies to: Texas
    Replied: 6/15/2012
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Your lawyer would calculate what you could or must pay. That would be the payment you would have to make. What percentage of the total debt that pays I don't know. You need to see a lawyer for that calculation. What does not get paid is discharged.
    Answer Applies to: California
    Replied: 6/15/2012
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    First, you need to talk to an experienced BK attorney to determine if you pass the Means Test. It is very complicated and not at all intuitive. Unless your debt is criminal restitution it is probably dischargeable under either Ch 7 of Ch 13.
    Answer Applies to: Colorado
    Replied: 6/15/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    It would allow you to pay it over the 5 year period, but if you can not afford 10k, then you may qualify for a chapter 7 and should speak to an attorney.
    Answer Applies to: New York
    Replied: 6/15/2012
    Law Office of Robert Sisson | Robert Sisson
    As long as the accident t was not due to drunk driving, it should be able to be discharged in Bankruptcy. A chapter 7 would be preferable for you, as it would get rid of most of your undecided debt; a chapter 13 gives u a period of typically 5 yrs to pay it back, based upon the plan your atty. Submits and the trustee approves.
    Answer Applies to: Wisconsin
    Replied: 6/15/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    It would take care of the judgment. But don't jump to the conclusion that you do not qualify for a chapter 7. Bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
    Answer Applies to: Arizona
    Replied: 6/15/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    It would be paid either in whole or a percentage of what is owed, depending on what the amount of your Chapter 13 plan payment would be. Whether you can qualify for Chapter 7, or if not what the Chapter 13 plan payment and amount to be paid can be determined by consulting a qualified bankruptcy attorney.
    Answer Applies to: California
    Replied: 6/15/2012
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Possibly get you repayment to that judgment creditor and all other non priority debts to as little as 0 percent. This is how 13 could help you.
    Answer Applies to: California
    Replied: 6/15/2012
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    A Chapter 13 Bankruptcy is specifically for people who can afford to pay something to their Creditors, just not everything that they are asking for. A Chapter 13 will allow you to develop a "Plan" to pay a portion, if not all, of your creditors in a manner in which you can afford.
    Answer Applies to: New Hampshire
    Replied: 6/15/2012
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    Just as a chapter 7, all your unsecured debts, including the amount ordered by the judgment, would be wiped out. In a chapter 13, however, you will have to commit to a payment plan of 36 to 60 months. The amount of monthly payment is determined by either your diagnosable income, or your assets, whichever is higher. The calculation method is quite complicated, I highly advise that you speak with an attorney.
    Answer Applies to: Florida
    Replied: 6/15/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    It would get the judgment removed, but you need the right motion and order for it to be done correctly, and this procedure is not always included in the attorney's fees usually charged. You need to consult with a chapter 13 bankruptcy attorney.
    Answer Applies to: Florida
    Replied: 6/15/2012
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First of all, don't assume you can't file Chapter 7. Let an attorney who knows all the ways to work the means test see if you can pass it through accepted adjustments. Even if you cannot do a 7, some 13s will wipe out some or all of the debt from the claim, so a 13 may also be a viable route for you.
    Answer Applies to: Georgia
    Replied: 6/15/2012
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