Can Chapter 13 Bankruptcy Help Me Reduce My Monthly Payments?

Can Chapter 13 bankruptcy help with monthly payments?

The short answer is “Yes” for most people. Chapter 13 bankruptcy typically provides a global solution to your financial situation for the vast majority of people. Financial problems don’t “go away” by themselves. But, there are effective tools for you to take control of your financial situation and set you up for a fresh start and success going forward.

When your income or circumstances change

If you’re considering bankruptcy because you took a pay cut, lost an income source, got divorced or some other long-term change, lowering your monthly payments can be a huge long-term help. The need to own a vehicle or have a home isn’t going away, and you’re able to pay for it, just not at the same price you were able to afford before things changed.

Vehicle loans and reaffirmation

Filing for bankruptcy can help lower monthly payments on items like cars and boats, but it depends on what kind of bankruptcy you file. Chapter 7 generally does not restructure your car loan payments. If you want to keep a financed vehicle, discuss your options with your attorney. A valid reaffirmation agreement keeps you personally liable for the reaffirmed debt despite the discharge in that bankruptcy case. If you default, the creditor may repossess the vehicle and you may owe a remaining balance after it is sold. Reaffirmation does not, by itself, make the debt nondischargeable in every future bankruptcy.

Review your options with an attorney

Here is the key thing to remember: Most bankruptcy attorneys will meet with you for free to find out if filing bankruptcy would be a benefit for you. Therefore, you can find out your options for free. 

Over the past 34 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can review whether bankruptcy may help stop your garnishment and address your debts through a repayment plan. If money has already been garnished, recovery may be possible in some cases, depending on the timing of the transfers, available exemptions and other legal requirements. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.