Liberty Chapter 13 Bankruptcy Attorney
If you are struggling to pay your debts, this can be a stressful and alarming time. Phone calls from creditors may be increasing, and you may wonder what will happen next. You do not have to face this alone. Contact the compassionate Liberty bankruptcy lawyers of House Packard McElderry, LLC by calling (816) 381-9105 today.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a legal proceeding that can provide needed debt relief. This type of bankruptcy is often called “wage earner’s bankruptcy.” One of the qualifications to file Chapter 13 as an individual is that you must earn regular income.
When you file for Chapter 13 bankruptcy, you must submit a payment plan that includes repaying a portion of or all your debts. This is typically structured across a period between three and five years. You will make installment payments to creditors during this time, and creditors are prohibited by law from making collection efforts while you repay.
In Chapter 13 bankruptcy, your debts are reorganized, and some may be eliminated. You can typically keep your property, such as your house and cars. The amount you will be required to pay to creditors depends on your unique situation, the amount and types of debt, and the applicable exemptions.
How Does Chapter 13 Bankruptcy Differ from Chapter 7 Bankruptcy?
A major difference is that in Chapter 13 bankruptcy, you can usually keep all your property. In Chapter 7 bankruptcy, the bankruptcy trustee might liquidate some non-exempt property to make payments to creditors. Your trustee in Chapter 7 decides what property might be non-exempt, such as a valuable art collection or a second car.
Filing for Chapter 7 requires demonstrating that you do not have the means to repay your debts. Filing Chapter 13 bankruptcy does not have this requirement. For this reason, Chapter 13 may be an alternative if you are not eligible to file Chapter 7 because your income is too high.
Chapter 7 and Chapter 13 bankruptcy also differ in the time between filing and receiving your discharge. In Chapter 7, this may often be less than six months. In Chapter 13, you do not receive your discharge until you have completed all payments in your repayment plan. Depending on your situation, this may be between three and five years.
Am I Eligible to File Chapter 13?
To be eligible for a Chapter 13 bankruptcy, you must satisfy several requirements. These include:
- You must file as an individual, not a business, even if you run an unincorporated business
- You must be employed and receiving regular income
- You must be current on income tax filing for the prior four tax years
- Your unsecured debt must be less than $465,275
- Your secured debt must be less than $1,395,875
- You must receive credit counseling within 180 days before filing
Examples of unsecured debt are credit cards, utility bills, and medical bills. Secured debt refers to debt that is backed by collateral. Examples include mortgages, car loans, and home equity lines of credit (HELOC).
In addition to these requirements, you must not have filed a bankruptcy petition during the previous 180 days that was dismissed for specific reasons. These include intentionally failing to appear before the court, failing to comply with court orders, or seeking voluntary dismissal in order to recover property.
What Happens After I Finish Making All Payments?
If you comply with your repayment plan, you will receive a discharge once all payments are complete. You will be able to keep your property, such as your home and car, and your accounts will be current.
It’s important to note that your bankruptcy filing will show up on your credit report and may affect your credit score. A Chapter 13 bankruptcy can stay on your credit report for up to seven years. This contrasts with Chapter 7 bankruptcy, which stays on a credit report for up to 10 years. However, the benefits of filing Chapter 13 may outweigh the negative impacts. This is especially true if credit scores were previously already affected due to struggling to make payments.
In addition, completing a Chapter 13 bankruptcy repayment plan demonstrates that you have successfully made monthly payments on time for a period of several years. This can work in your favor in the years following discharge when you are ready to pursue mortgages or car loans.
How House Packard McElderry, LLC Can Help
The process of filing for Chapter 13 bankruptcy can be difficult and lengthy. It can also be challenging to navigate, especially since you are likely already stressed because of your debts. When your goal is to achieve a financial fresh start, you need to make sure everything is in order and that you have satisfied all requirements, so the bankruptcy goes smoothly.
Our attorneys understand how bankruptcy can affect your future. House Packard McElderry, LLC has a depth of experience in bankruptcy law. We are prepared to use this experience to help you make the best decision for your future.
There is a significant amount of paperwork and documentation involved in filing for Chapter 13 bankruptcy. You must complete financial schedules that include specific information about your debts, assets, expenses, and income. All forms and values must be correct and accurate, under penalty of perjury. You can rest easy knowing that our attorneys will complete all documentation and forms for you.
You must comply with the debt payment plan that is created during Chapter 13 bankruptcy. This means that you will be making these installment payments for the next three to five years. It’s critical that the payment plan is created correctly and that you understand how each element will affect you.
House Packard McElderry, LLC can help guide you through the process of filing bankruptcy. Our lawyers can help you determine which type of bankruptcy may be right for you. We are proud to share the testimonials of our prior clients. We are ready to provide the same level of professionalism and client service to you.
Contact a Bankruptcy Attorney
If you are struggling with overwhelming debt and you’re concerned about how your debts may impact your future, you should speak with an experienced bankruptcy lawyer about your situation. Call (816) 381-9105 today to speak with a House Packard McElderry, LLC lawyer about your case. We are ready to schedule a free consultation to help you understand your options.