Chapter 13 Is A Bail Out Of Bankruptcy

Chapter 13 is a bankruptcy proceeding in which the debtor reorganizes his or her finances under the supervision and approval of the courts. Some debtors cannot file for Chapter 7 leaving Chapter 13 as the only option. A Chapter 7 means one may sell or pay the value of all of their non-exempt assets to settle the creditors while Chapter 13 involves monthly payments made over the course of a 3-to-5-year payment plan. When one files for Chapter 13 bankruptcy, they must file a set of bankruptcy documents with the court with information about their income, recurrent monthly expenditure, assets, and debts. bankruptcy lawyers dallas allows the debtor to suggest a payment plan to pay creditors in installments of three or five years approved by the court. The debtor proposes a payment plan based on his income and expenses. Then an automatic stay goes into effect. Therefore, creditors cannot take any action in an attempt to collect their debt. Chapter 13 trustee receives and reviews the whole bankruptcy petition including the repayment plan and documents. He ensures all calculations are correct, and expenses are reasonable. Chapter 13 offers a way to catch up on past due amounts and stretch payments out over time to give you time get back on track.

Some of the advantages of Chapter 13 and why it might be what one needs are;

  1. It saves the home from foreclosure

This is the biggest reason people file for Chapter 13.The automatic stay stops the foreclosure while they continue to pay and get back to track with their payments.

  1. One can retain assets you would have to give up in a Chapter 7 bankruptcy

Since Chapter 13 allows people to pay the value of their non-exempt assets over time, it should be considered by those who have average non-exempt assets that they want to keep. A Chapter 13 bankruptcy allows one to pay the unsecured creditors what they could have received in Chapter 7 bankruptcy over 3 to 5 years payment plan.

  1. If lags behind in car payments, mortgage, or taxes

Chapter 13 would allow one to make up their past-due payments over the course of the suggested payment plan. The same case also applies to people with back-taxes instead of paying them all off at once.

  1. If one has a stable income

As long as one has stable income that can meet their living expenses and still have some left over, they can pay the creditors over the course of the payment plan and make payments on the assets they want to keep. This is partly because they may not qualify to file a Chapter 7 if their income is above a certain level.

Why People File Chapter 13 Bankruptcy

When it comes to filing for bankruptcy, there is a major difference between filing for Chapter 13 and filing for Chapter 7. Those who file for Chapter 13 bankruptcy meet an entirely different set of specifications. Let’s take a closer look at the reasons why people file for Chapter 13 bankruptcy.

Retaining Assets

These bankruptcies are designed to help those who have the means to start a court ordered payment plan. Instead of being forced to liquidate assets, Chapter 13 filers have the option of establishing a payment plan, catching up on past due bills and maintaining possession of their most crucial assets. They keep their property and pay off their debts over a period of three to five years.

Their Debts Are Still Manageable

There are certain debt requirements associated with filing a Chapter 13 bankruptcy. Their debts must be unsecured and cannot reach a total of $336,000. As for secured debts, these must be less than $1,010,650.

For those who are unfamiliar with the process, unsecured debts include medical bills and credit card debts, whereas secured debts are those that are protected by property. Creditors have the ability to revoke a person’s right to their own property if these debts are not paid off.

Sufficient Income Is Available

Debtors must have enough income after all of their allowable expenses have been deducted to afford their monthly payments in order to qualify for a Chapter 13 bankruptcy. Debtors are even able to include their spouse’s income, even when they are not a part of the bankruptcy, making Chapter 13 particularly useful for married couples who are trying to avoid further financial difficulties.

More Time To Make Payments

Chapter 13 bankruptcies are not filed by those who are in search of a quick financial fix, they are filed by people who have the money to make their required payments and simply need more time to do so. A Chapter 13 bankruptcy trustee is usually more lenient and flexible when it comes to your payment terms.

There are numerous options available, including stretching out the payments, reducing the monthly amount and surrendering an item that you’re currently making payments to get out from under them for good. You can also decide to keep your property and continue to make monthly payments.

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Willingness To Surrender Credit Cards

The idea of surrendering all credit cards is enough to give pause to some folks, but in most instances, overuse of credit cards is what you got them into the dire straits that they’re in. Debtors who are ready and willing to hand over the plastic tend to benefit most from Chapter 13 bankruptcy and if they follow the terms of their repayment plan, they can apply for a new line of credit within one to three years of their initial filing.

How To File A Chapter 13 Bankruptcy

If your financial life hasn’t been going all that well and if you need to file for bankruptcy, there are certain steps you need to know of in order to be able to do it properly.

The first thing you need to do, however, is to determine whether or not bankruptcy is really the best choice in your situation. Analyze things carefully and talk to experts, there are a lot of implied things in the middle so be careful about what you’re doing – remember that the future might hold a lot of surprises.

-Remember chapter 13 is an alternative

If you really want to follow through remember that Chapter 13 bankruptcy is an alternative to the Chapter 7 bankruptcy – you have a choice in here and you’re looking for that one. By filing Chapter 13 bankruptcy you are declaring that you have a regular income and that you are going to pay your debts, but you need time to do so.

The first thing you need to do is to file a petition. In the petition, that you’re going to send to your local bankruptcy court, you need to declare your current income and expenditures, and other types of financial information. If possible, ask a lawyer to help you out with this. Remember, there’s a fee attached so save up some money to pay it.

After the petition, you now need to file a plan on how you will be paying the money you owe. It would be great to simply say you can pay it, but you need a real plan that’ll convince creditors you are able to do so. It can go with the petition or up to 2 weeks later.

-It’s time to start paying

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Now that you’ve filed everything you need to have a meeting with creditors. They’ll schedule it and they’ll have doubts about your payment plan and your financial situation, so be prepared for anything that might end up happening.

Then, you need to attend a confirmation hearing. It’ll be held in court and in it there will be a judge trying to see if your plan is actually doable and whether or not you’ll be able to do it as well. Creditors will be there and they may object, so your better nail your meeting with them first.

If your financial life hasn’t been going all that well and if you need to file for bankruptcy, there are certain steps you need to know of in order to be able to do it properly.

The first thing you need to do, however, is to determine whether or not bankruptcy is really the best choice in your situation. Analyze things carefully and talk to experts, there are a lot of implied things in the middle so be careful about what you’re doing – remember that the future might hold a lot of surprises.

-Remember chapter 13 is an alternative

If you really want to follow through remember that Chapter 13 bankruptcy is an alternative to the Chapter 7 bankruptcy – you have a choice in here and you’re looking for that one. By filing Chapter 13 bankruptcy you are declaring that you have a regular income and that you are going to pay your debts, but you need time to do so.

The first thing you need to do is to file a petition. In the petition, that you’re going to send to your local bankruptcy court, you need to declare your current income and expenditures, and other types of financial information. If possible, ask a lawyer to help you out with this. Remember, there’s a fee attached so save up some money to pay it.

After the petition, you now need to file a plan on how you will be paying the money you owe. It would be great to simply say you can pay it, but you need a real plan that’ll convince creditors you are able to do so. It can go with the petition or up to 2 weeks later.

-It’s time to start paying

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Now that you’ve filed everything you need to have a meeting with creditors. They’ll schedule it and they’ll have doubts about your payment plan and your financial situation, so be prepared for anything that might end up happening.

Then, you need to attend a confirmation hearing. It’ll be held in court and in it there will be a judge trying to see if your plan is actually doable and whether or not you’ll be able to do it as well. Creditors will be there and they may object, so your better nail your meeting with them first.

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