For many, a Chapter 13 bankruptcy offers the most viable solution to their debt problems. Our attorneys at Bankruptcy Advocates can help you understand the differences between Chapter 13 and the other bankruptcy filings. We will explain the process and examine your finances to help you decide if Chapter 13 is right for you. This type of bankruptcy helps individuals with regular income to create a plan to repay all or parts of their debts to their creditors.
Repayment will take place between 3 to 5 years, depending on the debtor's monthly income. While under a plan, a creditor cannot start or continue collection efforts.
Chapter 13 bankruptcy offers debtors several benefits, including stopping home foreclosures. By filing under this chapter, individuals can stop foreclosure proceedings and may also cure negligent mortgage payments in time; however, they must still make all mortgage payments on time under this plan.
Additionally, individuals can make a scheduled payment plan for all other secured debt within the life of the Chapter 13 plan, which could also lower the individual's payments.
Chapter 13 also has a special provision that protects third parties who are liable with the debtor on consumer debts, which may protect co-signers. Finally, Chapter 13 acts like a consolidation loan in which an individual makes payments to a Chapter 13 trustee, who will distribute the payments to creditors. In some cases, payments to unsecured creditors are not required.
Any individual is eligible for Chapter 13, even if they are self-employed or are operating an unincorporated business, so long as their unsecured debts are less than $388,175 and their secured debts are less than $1,149,525.
An individual cannot file for Chapter 13 bankruptcy if a prior bankruptcy petition was dismissed due to the willful failure of the individual to appear or comply in or with court hearings during the 180-day proceeding.
If you're thinking about filing for Chapter 13 bankruptcy, you will need to file a petition with the local bankruptcy court. You will need to file four things:
- Schedules of assets and liabilities
- Schedule of current income and expenditures
- Schedule of executory contracts and unexpired leases
- A statement of financial affairs
In order to complete the Official Bankruptcy Forms that make up the petition, you will need to provide a certificate of credit counseling, a copy of a debt repayment plan designed through credit counseling, evidence of payment from employers 60 days prior to filing, a statement of monthly net income, a list of all creditors and the amounts and nature of the claim, a detailed list of your monthly living expenses, and more.
Don't let your financial woes control you. The attorneys at Bankruptcy Advocates can help guide you through the entire process from start to finish. Just call us at 618-549-9800 for your free consultation today.
We are a debt relief agency. We help people file for debt relief under the U.S. Bankruptcy Code.