Chapter 13 Bankruptcy
If you don't qualify for Chapter 7 bankruptcy, or if you would prefer not to file for Chapter 7 bankruptcy but still want to organize your debt and get relief from creditors, then you may want to consider the possibility of filing under Chapter 13. When you file for this type of bankruptcy, an attorney can help you to develop realistic goals to incorporate all of your debt into one monthly repayment plan.
The repayment plan will be supervised by the trustee of the bankruptcy court. Normally, the payment plan will last from three to five years, during which time you will pay consistently to establish good credit and eliminate the costs.
Attorney G. Donald Golden has experience as a former staff attorney for a Chapter 13 trustee. This background gives him unique insight into how trustees approach cases. Consult The Golden Law Group to learn how to handle your situation effectively.
Benefits of Chapter 13 Bankruptcy
With Chapter 13 bankruptcy, you can do some of the things that Chapter 7 won't allow, such as stripping off second or third mortgages and / or incorporating them into your original mortgage. You can also protect your car from repossession with a similar strategy regarding your car payments. Also, Chapter 13 allows some filers to reduce monthly payments on student loans or government debts.
You can include these costs in your payment plan and can avoid accruing arrears and penalties. Additionally, Chapter 13 does not have as big of an impact on the individual's credit report as other choices. Creditors know that you are meeting your obligations and have the cash flow to slowly pay them back.
While your credit score will inevitably drop temporarily, you shouldn't have a hard time building it back up so that you can secure loans when necessary.
Am I eligible for Chapter 13 bankruptcy?
To file for Chapter 13 bankruptcy, you must meet the following requirements:
- You must be an individual: You cannot file for under Chapter 13 as a business or a corporate entity. Married couples can file as joint petitioners if they consider all income to be marital income as well as all assets and debts joint.
- You must be able to meet the monthly terms: Normally, the bankruptcy court wants to know that you have a steady income, so that you will be able to meet your monthly payments. You may need to prove that you have an income that will allow you to steadily pay off the debts.
- Your unsecured debts cannot total more than $337,000: This requirement is based on the United States Bankruptcy Code. Secured debts cannot total more than $1,010,000.
- You cannot have had any debt discharged under Chapter 7: You cannot file for Chapter 7 and then subsequently file for Chapter 13 bankruptcy. You must wait 4 years after discharging debt in order to file.
Organizing Debt for a Chapter 13 Bankruptcy Case
If you file for Chapter 13 bankruptcy, then the court will organize your debts into three separate categories::
- Priority claims
- Secured debt
- Unsecured debt
After your debts have been organized accordingly and your payment plan has been drafted, you will need to attend a confirmation hearing. At this hearing, the court will determine whether or not a repayment plan is realistic. Creditors can attend this hearing and have the right to object to the plan or specific elements of the plan if they see fit.
Creditors typically object if the repayment of the debt is much less than they would receive if the debtor's listed asset were to be liquidated under Chapter 7 bankruptcy. Creditors are also allowed to object if they believe that a plan doesn't commit enough of the debtor's disposable income toward repayment.
Six-Month Lookback Period
For a Chapter 13 bankruptcy filing, individuals are required to submit to a six-month lookback period. The courts perform this check to make sure that there has not been a major liquidation of assets or a deliberate reduction in income in anticipation of filing bankruptcy.
Factors reviewed during the lookback assessment include:
- Tax refunds
- Retirement fund distributions
- Interest and dividend income
- Wages earned
- Significant gifts and personal loans from family members
- Bonuses earned
- Inheritance and trust distributions
If you are concerned about this lookback period, then The Golden Law Group can help. In most cases, the firm can help find a solution to make your bankruptcy petition successful, even if you are worried that you won't qualify.
How The Golden Law Group Can Help You
If you are considering Chapter 13 bankruptcy, don't hesitate to call a skilled attorney at the firm today. Your lawyer can attend your confirmation hearing and handle all records, petitions, and court meetings that will be a part of your bankruptcy. If you want to learn more about Chapter 13, call The Golden Law Group today to receive a free consultation and discuss your case with a bankruptcy lawyer in Brandon!