Chapter 13 Bankruptcy
 

Chapter 13 Bankruptcy Lawyer

Chapter 13 bankruptcy is a bankruptcy case involving a financial reorganization plan, allowing you to pay off priority debts in a more manageable manner. You have important protections from collection action during the case, and you can receive a discharge of nearly all remaining balances at the end of a successful repayment plan.

The discharge in Chapter 13 covers some debts that cannot be discharged in Chapter 7. It is a powerful tool for many people to keep their assets, regain control of their financial lives, and get a meaningful fresh start.

While Chapter 13 is not as common for consumers as Chapter 7 bankruptcy, it can be highly beneficial if the circumstances are right. You should never hesitate to discuss the possibility of a case with our Chapter 13 bankruptcy lawyers at Consumer Law Attorneys.

Below is some additional information about the Chapter 13 process and how it can benefit those struggling with certain types of debt.

When is Chapter 13 the Right Choice for Consumers?

Chapter 13 bankruptcy is not right for everyone. In your consultation with our bankruptcy attorneys, we will assess which type of bankruptcy is the most appropriate for your situation.

The nature of your debt can play a significant role in determining if Chapter 13 is the right choice for you. If you have specific debts that are not dischargeable under Chapter 7, such as certain tax obligations or domestic support arrears, Chapter 13 may provide a way to address these debts while maintaining control of your assets. You might choose Chapter 13 if you have liens that are larger than the value of the assets securing the debt, are behind on car or house payments, or are repaying retirement fund loans not dischargeable in Chapter 7.

If you find yourself ineligible for Chapter 7 bankruptcy due to your income level, Chapter 13 may be the solution. This type of bankruptcy allows individuals with a steady income to restructure their debts and create a manageable repayment plan over three to five years. You might also steer in the direction of Chapter 13 if your assets are worth more than the available exemptions in Chapter 7.

With Chapter 13, you can catch up on missed mortgage payments, reduce the interest on certain debts, and even protect nonexempt property that you want to retain. You have this option even with higher income that disqualifies you from other types of consumer bankruptcy.

It is worth discussing this option with our team at Consumer Law Attorneys today.

Meeting the Requirements of Your Chapter 13 Case

To qualify for Chapter 13 bankruptcy, you must meet certain requirements. One of the key qualifications is having a regular source of income, such as employment or business income. You must also have unsecured debts below a certain threshold and secured debts within a specified limit.

Additionally, you must attend credit counseling from an approved agency before filing for bankruptcy. Your attorney will guide you through the entire process and ensure you meet all the requirements for a successful Chapter 13 case.

Chapter 13 Repayment Plans

Chapter 13 bankruptcy allows individuals with regular income to create a repayment plan to pay back their debts over a period of three to five years, depending on your financial capabilities. This plan is tailored to the individual’s income and expenses, enabling them to restructure their debts and avoid liquidating assets.

During the repayment period, you will make a single monthly payment to a bankruptcy trustee, who will then distribute the funds to your creditors according to the plan.

At Consumer Law Attorneys, we ensure our clients receive reasonable repayment plans that set them up for success, supporting them throughout the entire process. Here are some key points about Chapter 13 repayment plans.

Paying Priority Debts in Full

Under a Chapter 13 plan, priority debts such as taxes and domestic support obligations must be paid in full, according to the Bankruptcy Code. These debts are considered non-dischargeable and take precedence over other debts.

Fractional Payments of Other Debts

Non-priority unsecured debts, like credit card balances and medical bills, are often paid back at a fraction of the total amount owed. This allows individuals to manage their debts more realistically based on their income.

Obtaining a Fair Plan Based on Your Income and Expenses

To ensure a fair repayment plan, it’s essential to accurately disclose your income and expenses. Working with bankruptcy attorneys can help you negotiate a plan that reflects your financial situation accurately, increasing your chances of success.

Adjusting Your Plan if Necessary

Life circumstances can change during the three or five years of your Chapter 13 bankruptcy, possibly impacting your ability to stick to the original repayment plan. In such cases, you can work with your bankruptcy attorney to modify the plan with the court based on your current situation.

Successful Discharge of Remaining Debts

Upon successful completion of your repayment plan, any remaining eligible debts will be discharged. This means that you will no longer be legally obligated to repay those debts, and the creditors cannot pursue further collection efforts. However, some debts, such as child support and alimony, are not dischargeable through bankruptcy, even Chapter 13.

The Chapter 13 discharge often eliminates some debts that cannot be discharged in Chapter 7, like recent tax penalties and non-support debts incurred in the course of a divorce. It permits the debtor time to pay debts that can’t be discharged in either chapter, like recent taxes or back child support, defaults on home mortgages, or liens to the extent the lien is greater than the value of the asset.

If you’re considering Chapter 13 bankruptcy, always consult with a knowledgeable and experienced bankruptcy and consumer law attorney. We can help you explore the best path forward based on your debts and other financial circumstances.

Contact Our Chapter 13 Bankruptcy Lawyers

At Consumer Law Attorneys, we know that Chapter 13 can be highly beneficial, but the process has to be handled properly. We guide clients through successful bankruptcy filings, and we can advise on your best options for dealing with overwhelming debt. Contact us today for more information and a consultation.

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