Chapter 13 Overview
When you file for Chapter 13, your goal is to repay some or all of the debts in your name, with lower or no interest. This allows you to use whatever income you currently have and in the future to pay off creditors. This way if you own assets you would not necessarily have to liquidate them, like you would with Chapter 7 bankruptcy.
You do need to have a regular income and can afford to request for such adjustments, or reductions. You will have to prove to the court that you can afford to do this. If you income is irregular or too low, you may not qualify for Chapter 13 bankruptcy.
You secured debts cannot be more exceed $922,975 and your unsecured debts cannot be more than $307,675. Under the US Bankruptcy code the debtor will have 5 years, to pay the creditors back. A attorney with be helpfully in safeguarding your interests.
How it Chapter 13 works
Before you can file for bankruptcy you must receive credit counseling form the approved agencies under the United states Trustee's Office. You will receive a certificate at the completion of your counseling sessions. You must file this certificate with the court, along with a packet of forms listing what you own, earn, owe and spend. Also needed will be your federal tax return for the previous year and proof the you filed both federal and state tax returns for the past four years. This is where a attorney can help you stay organized and make sure all of the paper work is in order. Finally you will have to submit a repayment plan showing how you will pay off your debt.
A debtor can keep all of their property, while court approves a new interest-free plan for repayment. You will receive a written plan that gives you the all of the transactions that will occur, and the duration of the same. You repayments must begin within 30 to 45 days after the case has started.
What debts must be paid back
Administrative claims must be paid back 100%
-Filing fee
-The trustee's commission
-Attorneys fees
Priority debts need to be paid 100%
-Back alimony and child support
-most tax debts
-wages you owe to employees
-what you owe to an employee benefits
-Mortgage defaults will be paid (if you want to keep your house)
-Any other secured debt defaults-like your car payment
Unsecured debts can be paid anywhere from 0 to 100% this depends on
-the total value of your nonexempt property
-the amount of disposable income you have
-How long your plan lasts
Are you eligible for Chapter 13 bankruptcy fill out our Free Bankruptcy Evaluation to find out.
FREE CASE EVALUATION