Debtors can escape fear and harassment from debt collectors by exploring various bankruptcy options. Chapter 13 is an excellent option if you’re looking for debt relief of some kind.
Chapter 13 bankruptcy allows you to repay your debts under the new repayment plan but doesn’t wipe out your debts. The Family Law attorneys in Kingston helping families through financial challenges can help you determine if Chapter 13 bankruptcy suits you, how much you would be required to pay each month and for how long.
Under What Circumstances Can I File Chapter 13 Bankruptcy?
If you are unsure about whether your financial situation allows you to apply and qualify for Chapter 13 bankruptcy, a bankruptcy attorney in Kingston, TN, can listen and advise you appropriately. You can consider it if you:
- Need a mortgage loan modification.
- Want to surrender a completely underwater investment property.
- Need protection after filing Chapter 7 bankruptcy eight years ago.
- Want to “strip off” a second mortgage since it is underwater, and there isn’t sufficient equity to pay the first in full.
- Cannot qualify for Chapter 7 bankruptcy because your assets’ worth exceeds the upper limit – and you do not want to liquidate them.
- Failed the Means Test because your income is higher than is required for Chapter 7 bankruptcy.
- Want to prevent a repossession or foreclosure and have the arrears repaid over five years.
What Disqualifies Debtors from Chapter 13 Bankruptcy?
Several things can make you unfit for Chapter 13 bankruptcy. People that are disqualified by these factors can speak to a Kingston bankruptcy attorney who can help them explore other options like Chapter 7 bankruptcy. You may have to forget about Chapter 13 bankruptcy if you:
- Do not have a monthly income and cannot make definite monthly payments.
- Earn an income that is too low to repay all or some of the debt.
- Have too much debt – over $300,000 in unsecured debts and over $1 million in secured debts.
How is Chapter 13 Bankruptcy Advantageous?
Chapter 13 is the best way to keep most, if not all, your valuable assets. Talk to bankruptcy attorneys in Kingston, TN, to determine the bankruptcy type that is most beneficial for you. Here is what you can gain from Chapter 13:
- It gives you time to pay back taxes and prevents interest from further accruing on the tax debt.
- You get to keep your property as you continue to pay the lender in more manageable installments.
- It saves your home from foreclosure and gives you time to catch up on due payments.
- You will be able to pay a lesser amount every month for your secured loans.
- It protects co-signers of your loans and other debts from constant harassment from debt collectors.
- The court allows you to re-classify an unsecured second mortgage and repay it like other unsecured debts.
- The bankruptcy court supervises mortgage modification processes, which accelerates the process. Notably, the lender has to explain to the court a case of denial or delay in the process.
- The waiting period before you can file another Chapter 13 bankruptcy isn’t as long. People wait longer to file for another bankruptcy after filing for Chapter 7 bankruptcy.
- Unlike in Chapter 7 bankruptcy, where you pay the attorney fees upfront, Chapter 13 allows you to pay the attorney through the repayment plan over a prolonged period.
- Certain debts, usually not dischargeable in Chapter 7, can be discharged in Chapter 13 bankruptcy, for instance, property settlement obligations following a divorce.
Are there Mandatory Courses for Chapter 13 Bankruptcy?
The bankruptcy court might bar you from filing Chapter 13 bankruptcy if you do not demonstrate that you have undertaken a mandatory credit counseling course. The agency offering the education needs to have approval from the United States Trustee’s office. Notably, the session involves evaluating whether your income is enough to pay back the creditors.
Debtors should expect to pay between $25 and $35 to take up the course. Remember that most filers of Chapter 13 bankruptcy do not qualify for the free or discounted counseling services offered to Chapter 7 filers; you may have to pay for it. And after you have already filed, you will be required to take another course.
How Do Debtors Come up With a Repayment Plan?
A repayment plan is central to a Chapter 13 bankruptcy, and the debtor is required to present it to the creditors and the court. Depending on where you file, you can either use the local court’s form or the official plan to write up an account of all debts. A debt collection defense lawyer in Kingston can help you complete the forms correctly.
Notably, you will begin making monthly payments the month following the month that you filed for bankruptcy. Furthermore, note that the bankruptcy trustee or a creditor can object to your proposed repayment plan. The trick is to make appropriate adjustments to everyone’s satisfaction and receive the court’s approval at the confirmation hearing. Your schedule will be approved if:
- It complies with the bankruptcy law.
- You are not trying to manipulate the process, and you made the plan in good faith.
- You have enough money to make payments, and thus, the plan is feasible.
A Compassionate Attorney helping You Get Your Finances Back in Order
Debt repayment is not as easy and straightforward as it sounds. There are a lot of procedures that need the guidance of a knowledgeable and skilled bankruptcy attorney. If you mess up, you might not get the much-needed debt clearance.
When faced with endless calls from creditors and debt collectors, consider bankruptcy as one of the legal options you could use to take back control of your finances. Talk to an expert that focuses on the client’s needs. Call our law firm today at (865) 221-8217 to schedule a free case evaluation.