How long is my repayment plan in Chapter 13 bankruptcy?
Chapter 13 has valuable benefits, but the most powerful is that it can help you save your home, and you probably won’t lose any personal property. Chapter 13 bankruptcy will stop the sale of foreclosures or stop a lawsuit for foreclosure. It allows you to catch up on mortgage payments through your Chapter 13 repayment plan and avoid foreclosure. Find a Richmond VA bankruptcy lawyer to help you start the process.
Starting the Process
To start a Chapter 13 bankruptcy, you must disclose all aspects of your financial situation, including your income, property, debt, and your financial transactions for the years immediately preceding your filing. Once your income for the past six months has been calculated, your bankruptcy attorney will determine if it is more or less than the median income in your state. This determines how long your payment plan will be. If your income is more than the state median, your plan, with a few exceptions, will last five years. If your income is less than the median, you can propose a three-year plan or anything between three and five years. See the help of one of the best bankruptcy lawyers in Hopewell va.
How does a repayment plan work in bankruptcy?
Once the bankruptcy attorney in Richmond VA knows how long your plan should be, he can calculate your Chapter 13 payment plan and submit it for bankruptcy court approval. Your plan should show how you intend to pay specific obligatory debts such as arrears in taxes and child support, secured debts (secured debts with collateral) on the property that you intend to keep. If you have enough income, a portion of that income should be allocated to your credit card debt, medical bills, and any other unsecured creditors you may have. Under Chapter 13, creditors cannot collect claims directly from you; instead, you make regular structured payments to the Chapter 13 trustee for the time period specified in the plan.
The Recommended Choice
Chapter 13 bankruptcy is the choice made by the consumer who is not eligible to file a Chapter 7 bankruptcy. One of the main reasons would be the income threshold exceeded according to the law. For those consumers who want to hold on to their assets, the Chapter 13 bankruptcy would be the best option recommended by a bankruptcy attorney Hopewell located. In the Chapter 13 bankruptcy plan, the debtors would establish a monthly repayment plan and give the consumer up to a maximum of five years and a minimum of three years to complete payment. The amount of the payments will be decided according to the person’s expenses, income, and existing circumstances.
If The Situation Changes
Since a Chapter 13 plan lasts three to five years, it is not uncommon for a change in financial circumstances to occur during that time. If you get sick, lose your job, or face an unexpected expense, you could have trouble making your Chapter 13 payments. In these circumstances, you can request a plan modification, find an excuse for late payments, or request “rehabilitation for hardship” by filing a motion in bankruptcy court. See one of the best bankruptcy attorneys in Hopewell VA for more explanation.
How Can an Attorney Help?
The problem is that Chapter13 law can be complicated and requires a thorough understanding of bankruptcy law. Most people don’t understand what will happen to their assets, how much they will have to pay creditors and other complicated Chapter 13 payment plan requirements. This is where a Richmond VA bankruptcy attorney is necessary, not only to explain everything but also to help you through the process. Canfield Wells LLP is one such law firm that specializes in bankruptcy law.