Are You Eligible to File for Chapter 13 Bankruptcy?
Bankruptcy laws underwent a huge change in October 2005. Either way, no matter what you may have heard about it, bankruptcy protection is available to everyone. The change added some additional requirements, but none of these requirements were designed to prevent you from getting the opportunity you deserve to start over. If you need to file for bankruptcy, you can still do so. Should you file Chapter 13 bankruptcy? The decision is very important as it affects various aspects of your life now and in the future. You may qualify for bankruptcy. If you consult with a bankruptcy attorney Hopewell located, he will be able to inform you on the best route to take. It will be dependent on your particular situation.
What is Chapter 13 Bankruptcy?
Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy is for people who have income or assets above a certain level. Also called a salaried plan, Chapter 13 bankruptcy allows people with regular incomes to create a plan to pay off all or part of their debts. In a Chapter 13 bankruptcy, the debtor, you, proposes a plan to pay your creditors in installments over a period of three to five years. Depending on your income, the court determines the duration of the plan. During this repayment period, creditors are prohibited from continuing collection efforts. Remember that the payment plan is based on mandatory court estimates that follow IRS guidelines and the penalties for non-payment are severe.
Do you qualify for Chapter 13 bankruptcy?
To be eligible to file for Chapter 13 bankruptcy, you must have a steady income with monthly disposable income or assets. This is not the same as Chapter 7 bankruptcy, where you must demonstrate that you have no disposable income. Disposable income is the money left over after paying for your basic living expenses such as food, utilities, rent, and so on. You cannot file for Chapter 13 bankruptcy if your secured debt is in excess of $1,081,400. This would include any real estate or other secured assets, which can be seized by a creditor if the payment is not made on time. Get help from one of the best and most knowledgeable bankruptcy attorneys in Hopewell va.
The Primary Focus
The main focus in a Chapter 13 bankruptcy case is the payment plan to creditors. The length of the plan is decided by the court based on your income, and no plan can exceed 5 years. People who have the following often file Chapter 13 bankruptcy:
- The debtor would try to bring their mortgage loans current in order not to lose their real estate or other assets
- Tax debt, child support, student loans, or any other type of debt that cannot be discharged in a Chapter 7 bankruptcy
- People who are not eligible for Chapter 7 bankruptcy because they have exceeded their disposable income
The main benefit of bankruptcy law is that it allows people to get out of debt and out of a bad financial situation. It also gives the debtor the possibility of defining new payment terms and waiving interest. One of the bankruptcy lawyers in Hopewell VA will tell you that another great benefit is that throughout the process, the debtor has financial protection, and so he is not exposed to an increase in interest or a garnishment.
How Can an Attorney Help?
Canfield Wells LLP, bankruptcy attorney in Richmond VA provides clients with an avenue to use professional help to get back on track financially. Because the bankruptcy process can be so tedious, it is best to hire a legal professional to handle all the ins and outs for you. A Richmond VA bankruptcy attorney will speak on your behalf in court, handle all the paperwork and keep you in the loop on the progress of your case. So, the best decision is to consult with a Richmond VA bankruptcy lawyer.