You don't have to sell all your possessions if you file for bankruptcy. With Chapter 13 bankruptcy, you work with the local Spokane bankruptcy courts to develop a repayment plan based on your income. If you're dealing with significant debt but make some payments, Chapter 13 bankruptcy could be the perfect solution to help you regain control of your finances.
Our experienced Spokane-based bankruptcy attorneys have helped countless clients find relief through Chapter 13 over the past 30 years. We understand the unique financial challenges people face in Spokane and Spokane County, from families in neighborhoods like Browne's Addition to individuals living in rural areas like Spokane Valley. Call our local Spokane law offices now for your free consultation.
What Is Chapter 13 Bankruptcy?Chapter 13 bankruptcy, often called "reorganization" bankruptcy, allows you to keep your property while repaying a portion of your debts. Instead of liquidating assets, you enter into a court-approved debt repayment plan for 3 to 5 years (11 U.S. Code § 1325). You will make the payments regularly until the period is complete, and then the court will dismiss the rest of your debt.
What Is A Chapter 13 Repayment Plan?A Chapter 13 repayment plan is a legal agreement between you and the court, outlining how you plan to repay your creditors over time. Here are some things to take note of about a Chapter 13 repayment plan:
If you want to qualify for Chapter 13 bankruptcy in Spokane County, you must meet the following criteria:
If you meet these qualifications, Chapter 13 may provide the relief you need to reorganize your debt and keep your property.
How The Spokane Bankruptcy Courts Approve Chapter 13 PlansAfter we file your petition, we will submit a proposed repayment plan. Your bankruptcy trustee will review it, and there's a confirmation hearing in Spokane federal court (usually remote these days). Creditors can object, but we often resolve those through negotiation. If the court finds that your plan meets the legal requirements under 11 U.S. Code § 1325 and your income supports the payments, the judge will approve it. We handle all of this for you and make sure your plan complies with the law.
FAQs About Chapter 13 Bankruptcy Answered By Our Spokane AttorneysA: Your monthly payment depends on your income, expenses, the type of debts you have, and any non-exempt assets. According to 11 U.S. Code § 1325, we'll work with the court to build a budget that reflects what you can realistically afford. In Spokane, this could mean paying a few hundred dollars a month for some, while others may pay more.
A: Yes. Once we file your Chapter 13 case, the automatic stay under 11 U.S. Code § 362 immediately goes into effect and stops all wage garnishments, lawsuits, and most collections, including those from Spokane County Superior Court. The automatic stay provides you with relief and a fresh start.
A: Not necessarily. You will develop your Chapter 13 payment plan based on your income, expenses, and non-exempt assets. According to 11 U.S. Code § 1322, many clients in Spokane only pay a portion of their unsecured debt. The courts discharge the remainder at the end of the case.
A: Yes, in many cases, you can include back taxes in your Chapter 13 case. Under 11 U.S. Code § 507(a)(8), you can pay tax debts owed to the IRS and the Washington Department of Revenue through your repayment plan. Chapter 13 allows you to avoid penalties and interest from growing while repaying tax debts over time.
A: Life changes can impact your ability to make payments. Jobs get lost, medical bills pile up, or something unexpected hits your budget, and now you can't pay. Unfortunately, missing a payment can lead to serious consequences, but it's not always the end of your case. Under 11 U.S. Code § 1307(c), we can request a temporary adjustment or modification to your plan from the Spokane bankruptcy court. We'll work with the court to make sure you stay on track and avoid default.
A: You're required to report any changes in income under 11 U.S. Code § 521(a)(1)(B). If your income increases, we may need to adjust your monthly payment to reflect the change. In some cases, we can adjust your expenses to balance them out. However, if your situation is long-term, we'll submit a modification under 11 U.S.C. § 1329(a) to the Spokane bankruptcy court to adjust your payment.
If you have debts from credit cards, medical bills, or regular expenses, Chapter 13 might be the right plan for you. Contact our Spokane law offices today to schedule your free consultation. We'll help you understand all your legal options.