Chapter 13 Bankruptcy
In this section about filing bankruptcy, you will learn about:
- Chapter 13 bankruptcy and its applications;
- the value of having a Chapter 13 bankruptcy attorney in your corner;
- Chapter 13 bankruptcy pre-filing requirements;
- the Chapter 13 bankruptcy process;
- the Chapter 13 bankruptcy repayment plan;
- Chapter 13 bankruptcy pre-discharge requirements;
- who can file Chapter 13 bankruptcy;
- Chapter 13 bankruptcy benefits;
- the importance of speaking to a local bankruptcy attorney about Chapter 13 bankruptcy.
What is Chapter 13 Bankruptcy?
Many Americans are often faced with short-term financial setbacks such as job loss, illness or large and unexpected expenses. In these instances, filing Chapter 13 bankruptcy often provides the solution they need. If you have a regular income and are able to make regular monthly payments, but have fallen behind on bills because of an unexpected crisis, filing for Chapter 13 bankruptcy may offer the break you need, to allow you time to get back on your feet.
Those who want to stop foreclosure or avoid repossession often choose Chapter 13 bankruptcy. It combines the automatic stay with giving you the chance to catch up on your past due debts. You are given a period of three to five years to recover financially and pay off your old debts, while still remaining current on your monthly payments that are not past due.
Does Chapter 13 bankruptcy sound like the relief you are looking for? Find out by letting ABC Bankruptcy connect you with an attorney in your area. Take a minute to fill out our free bankruptcy evaluation form; we will match your information with a local bankruptcy lawyer who can answer your questions and provide the personal attention you deserve.
Why a Local Bankruptcy Lawyer who Specializes in Chapter 13 Cases May be Your Best Resource
Filing for Chapter 13 bankruptcy can be a complicated and confusing process; mistakes can only hinder you, and can cost you the protection of the automatic stay, prevent a repayment plan from being accepted, or just delay the entire bankruptcy process. A local attorney who specializes solely in Chapter 13 cases can make the process less stressful and easier to understand. They can help you better understand if filing for Chapter 13 is the right option for you, and guide you through the entire process if you decide it is. With a lawyer on your side, you won't have to worry about filing requirements and deadlines being met, or if you have accounted for all of your allowable expenses. They will also help in proposing a plan that will allow you to make payments on your past due debts, while still keeping current on your regular expenses.
What are the Pre-Filing Requirements for Chapter 13 Bankruptcy Cases?
All personal bankruptcy petitioners filing bankruptcy under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code are now required to complete a U.S. Trustee approved Credit Counseling Briefing, as introduced in October, 2005. Once you have completed the briefing, your attorney will file the certificate of your completion along with your bankruptcy petition. Those petitions filed without a credit counseling certificate may be dismissed, causing potentially catastrophic consequences for you, as it may allow creditors the window they need to take collection actions or to move ahead with foreclosure and/or repossession because there is not an automatic stay in effect.
Your Chapter 13 bankruptcy attorney may suggest an approved Counseling Agency, or you can procure an approved Credit Counseling Briefing online at www.StartFreshToday.com.
What To Expect in The Chapter 13 Bankruptcy Process
Once the bankruptcy petition has been filed in a bankruptcy court, the Chapter 13 case has officially begun. Generally, the court will enter an automatic stay, whic prevents your creditors from taking any further action against you while the case is pending, or until further notice from the court.
Once the automatic stay has been entered, the bankruptcy court will notify all of the creditors you listed in your petition, and assign a bankruptcy trustee to your case.
A Notice of Commencement of Case will be sent to you, as well as your creditors within 15 days after filing the petition. This notice will include information regarding the time, date, and location of the creditors meeting, as well as the deadlines for your creditors to file claims and/or objections to your petition.
Any schedules that contain your debts, assets, expenses and income must be filed within 15 days after the case is commenced; most often these schedules are filed at the same time as the bankruptcy petition, unless there is an emergency situation, such as a foresclosure or reposession. In these instances, the bankruptcy petition is filed immediately to stop further action, and the remaining information and schedules can be filed within the 15 day time period. The 15 day deadline also applies to filing your Chapter 13 repayment plan.
What is the Chapter 13 Bankruptcy Repayment Plan?
Chapter 13 bankruptcy differs from Chapter 7 bankruptcy in that your assets are not liquidated to "clear your slate" in a short period of time. Chapter 13 bankruptcy is intended to help those who are facing financial difficulty keep their property, while slowly catching up on their past due debts. Generally, a Chapter 13 repayment plan allows between 36 and 60 months to repay your past due balances. During that period of time, you keep up with your current bills, while also making monthly payments towards your past due balances. Debts are prioritized, ensuring that secured debts get paid first. Any remaining disposable income goes to pay unsecured creditors in a hierarchy that is established by the Bankruptcy Code. Pending you make your payments as scheduled, unsecured debts at the bottom of the hierarchy may be discharged.
Are There any Pre-Discharge Requirements in Chapter 13 Bankruptcy?
As required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, you must complete an approved Debtor Education Course before getting your bankruptcy discharge. The Debtor Education Course is a personal financial management course aimed at educating you in preventing the need for bankruptcy in the future. You may get a referral from your bankruptcy attorney about where to attend an approved financial management class, or you can procure an approved Debtor Education Course online at www.StartFreshToday.com.
Who Can File for Chapter 13 Bankruptcy?
Not everyone will qualify for Chapter 13 bankruptcy protection. In order to qualify, a debtor must:
- Receive a regular income that allows you to make pre-determined payments to the bankruptcy trustee, who will use it to pay your creditors;
- After paying your current bills, have disposable income that affords you to make regular payments to the trustee, while still covering your current necessary living expenses;
- Meet the pre-set limits for secured and unsecured debts. The limits are updated periodically; a local bankruptcy attorney can keep you posted about the current limits.
If you do not qualify for Chapter 13 bankruptcy, do not worry. You may still qualify for filing Chapter 7 bankruptcy.
What are the Benefits of Filing Chapter 13 Bankruptcy?
Facing serious financial difficulties offers no "easy" answers and there is no one right solution for everyone. Whether filing for Chapter 7 or Chapter 13 bankruptcy, or choosing an alternative to bankruptcy, the choice is up to the individual debtor to know what's right for them. People often find Chapter 13 bankruptcy their best option when they:
- Are unable to stay current on their payments on secured property they wish to keep. A Chapter 13 petition can halt the process of a foreclosure or vehicle repossession. It can also be just as useful for catching up on other secured debts, while keeping the property in the process.
- Have tax debts that cannot be discharged in a Chapter 7 bankruptcy case. In a Chapter 13 repayment plan, certain tax debts that are non-dischargeable may be included in the plan and can be paid over time.
- Have non-exempt property that they want to keep. In a Chapter 13 bankruptcy, a repayment plan is established, making it possible to keep your non-exempt property, unlike the liquidation of non-exempt property in a Chapter 7 case.
- Are not eligible to file for Chapter 7 bankruptcy, because they have done so within the previous eight years.
- Have co-signers whose credit they would like to protect. As long as the debtor adherers to the repayment options in a Chapter 13 case, the co-signer is protected. In a Chapter 7 case, a non-filing co-signer remains liable.
- Have student loan debt that is past-due. Student loans cannot be discharged in a Chpter 7 case, except under very specific circumstances, but they may be included in a Chapter 13 repayment plan.
Part of the information gathering process necessary when deciding whether filing for Chapter 13 bankruptcy is right for you includes talking to a bankruptcy attorney. Don't wait until it is too late and you are days away from a foreclosure or repossession; consult with an attorney who can help you make informed, thorough and accurate decisions on whether filing Chapter 13 bakruptcy protection is right for you. Keep the things that are most important to you - talk to an experienced Chapter 13 bankruptcy attorney in your area today. .
To learn more about filing bankruptcy and to see which bankruptcy option is right for you, let us help. ABC Bankruptcy can connect you with a bankruptcy attorney in your area who will give you the personal attention you deserve. Don't live another minute in fear. Fill out our online case evaluation form - it only takes a few minutes and could be your light at the end of your financial tunnel.