BANKRUPTCY UPDATES

Chapter 13 Bankruptcy Basics

If you've fallen behind in bill payments, Chapter 13 bankruptcy may be able to help you get back on track.

Did you know that Chapter 13 bankruptcy was designed to stop foreclosure, repossession, wage garnishment and some lawsuits?

Million of people have turned to filing bankruptcy as a way to get out of debt, protect their hard-earned property and get back on track. Find out if it's right for you by reading on for more information about filing Chapter 13 bankruptcy.

If you're ready to take the next step towards eliminating your debt and protecting your home, complete the free case evaluation form on this page and we'll connect you with a local bankruptcy lawyer right away.

Filing Bankruptcy: The Chapter 13 Bankruptcy Option

Chapter 13 bankruptcy often provides relief for people who have faced short-term financial setbacks like job loss, illness or large unexpected expenses.

For people who have fallen behind on their bills but have regular income, filing bankruptcy under a Chapter 13 bankruptcy may allow the breathing room they need to get back on track with their payments and keep their property.

Many people looking to stop foreclosure or avoid repossession file Chapter 13 bankruptcy because it allows them to catch up past due payments over a period of three to five years while keeping current payments up to date.

When a person officially files Chapter 13 bankruptcy, they typically receive the protection of the automatic stay, which is a court order that prohibits further collection efforts from creditors.

That means the calls stop and most legal action (like foreclosure, repossession, lawsuits or wage garnishment) is ceased. Sound like what you're looking for? Fill out the above form right now and talk to one of our sponsoring bankruptcy lawyers.

A Local Chapter 13 Bankruptcy Attorney May be Your Best Resource

Chapter 13 bankruptcy can be a complicated process and mistakes in that process could potentially cost a bankruptcy petitioner the protection of the automatic stay or prevent a Chapter 13 bankruptcy repayment plan from being approved.

One of our sponsoring local bankruptcy attorneys can help you determine whether filing Chapter 13 bankruptcy is the right option for you. Then the bankruptcy lawyer can guide you through the process, ensuring that all filing requirements and deadlines are met and that you've accounted for all of your allowable expenses and proposed a plan that will allow you to make payments while keeping up your regular expenses.

Complete our simple and free bankruptcy case review form to talk to a local bankruptcy lawyer today.

Pre-Filing Requirements for Chapter 13 Bankruptcy Cases

Since October of 2005, all personal bankruptcy petitioners filing bankruptcy under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code have been required to complete a U.S. Trustee approved Credit Counseling Briefing.

Your bankruptcy lawyer should file the Credit Counseling certificate with your bankruptcy petition.

This is an  important action because bankruptcy petitions filed without a Credit Counseling certificate may be dismissed. This can have catastrophic results because it may allow creditors a window in which to take collection action, like moving forward with foreclosure or repossession.

Before filing bankruptcy, your bankruptcy attorney can direct you to an approved Credit Counseling agency or you can purchase an approved online Credit Counseling briefing at Start Fresh Today.

The Chapter 13 Bankruptcy Process

A Chapter 13 bankruptcy case officially begins with the filing of the bankruptcy petition.

In most cases, the court will enter an automatic stay as soon as the case is filed, prohibiting creditors from taking any further collection action while the bankruptcy case is pending or until further order of the bankruptcy court.

The bankruptcy court will send notice to all of the creditors listed in the Chapter 13 petition and will assign a bankruptcy trustee to the case.

Within about 15 days after the petition is filed, the court will send a Notice of Commencement of Case to the bankruptcy petitioner and to all of the creditors listed in the bankruptcy petition.

This notice will include important information like the time, date and location of the creditors meeting and the deadlines for claims and/or objections from creditors.

Schedules containing information about the petitioner's debts, assets, income and expenses must be filed within 15 days after the case is commenced.

These schedules often are filed along with the petition; but where an emergency situation exists (for instance, if the petitioner is filing bankruptcy in order to stop foreclosure or repossession), they may be filed separately so that the petition can be filed immediately, without waiting to collect the required information and documentation for the schedules.

The 15-day deadline also applies to filing the Chapter 13 repayment plan.

The Chapter 13 Bankruptcy Repayment Plan

Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy doesn't liquidate assets and discharge unsecured debts in a short period of time.

Instead, Chapter 13 bankruptcy is intended to help people facing financial difficulty keep their property while gradually catching up on past due balances.

A typical Chapter 13 bankruptcy repayment plan is between 36 and 60 months.

During that time, the bankruptcy petitioner keeps current payments current and makes monthly payments toward past due balances. Debts are prioritized by the bankruptcy court and secured creditors get paid first.

Remaining disposable income goes to pay unsecured creditors, in a hierarchy established by the Bankruptcy Code.

A good aspect to filing Chapter 13 bankruptcy is that if all payments have been made as scheduled, unsecured debt remaining at the end of the plan may be discharged.

Pre-Discharge Requirements in Chapter 13 Bankruptcy

In addition to making payments as agreed to when filing bankruptcy under the Chapter 13 plan, Chapter 13 bankruptcy petitioners must complete a U.S. Trustee approved financial management course (often called Debtor Education) before a discharge may be granted. Your bankruptcy attorney may refer you to a Debtor Education course, or you can purchase an approved, online Debtor Education course at Start Fresh Today.

Can I File Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is not for everyone. In order to qualify for Chapter 13 bankruptcy, a debtor must:

• Have a regular source of income from which to make pre-determined payments
  
• Have enough disposable income to make regular payments after covering current necessary living expenses
• Fall within pre-set limits for secured and unsecured debts. The limits are updated periodically and a local bankruptcy attorney can tell you the exact current limits for secured debts.

For those who do not qualify to file Chapter 13 bankruptcy, filing bankruptcy may still be an option; but perhaps in the form of Chapter 7 bankruptcy.

Should I File Chapter 13 Bankruptcy?

Whether filing bankruptcy under Chapter 7 or Chapter 13 or going with another alternative outside the bankruptcy process is the best fit depends upon the debtor, the circumstances, the amount and nature of the debt, current income and a variety of other factors.

Often, people find Chapter 13 bankruptcy helpful when:

• They are behind on payments on secured property that they want to keep. Many people file Chapter 13 bankruptcy petitions specifically to stop foreclosure or vehicle repossession, but Chapter 13 may be equally useful for catching up on other secured debts while keeping the property that secures the debt.
• They have tax debts that cannot be discharged in a Chapter 7 bankruptcy case. Certain tax debts are non-dischargeable but some may be included in a Chapter 13 repayment plan and paid over time.
• They have non-exempt property that they want to keep. In a Chapter 7 bankruptcy case, non-exempt property can be liquidated (sold) for the benefit of creditors, but in a Chapter 13 repayment plan, the debtor maintains his or her property while making scheduled payments.
• They have filed for Chapter 7 bankruptcy within the previous eight years, and thus are not eligible to file Chapter 7.
• They wish to protect co-signers on certain debts. In a Chapter 7 bankruptcy case, a co-signer remains liable for a debt even if that debt has been discharged for the primary debtor. However, if a debt is included in a Chapter 13 repayment plan, the co-signer is protected so long as the debtor complies with the plan.
• They have past-due student loan debt. Student loans are not dischargeable in a Chapter 7 bankruptcy case except under certain very narrow circumstances, but some student loan debt may be included in a Chapter 13 repayment plan.

Is Chapter 13 Bankruptcy Right for You?

Just talking to a bankruptcy attorney doesn't necessarily mean you've made a decision--it can just be part of the information-gathering process when deciding whether filing bankruptcy under a Chapter 13 plan may help.

Unfortunately, many people wait until their circumstances are desperate to talk to a bankruptcy lawyer and then find themselves with only days in which to stop foreclosure, vehicle repossession or other collection actions.

The best decisions are usually based on thorough, accurate information and a Chapter 13 bankruptcy attorney may be the best source of that information.

If you'd like to learn more about filing bankruptcy--whether it's Chapter 7 or Chapter 13 bankruptcy--all you have to do is pick up the phone and call 877-349-1309 or fill out the above free bankruptcy case review form.

We'll connect you with one of our sponsoring bankruptcy lawyers who can assess your financial situation and help you decide which alternative might be right for you. Don't wait one more day. Fill out the form right now and get started today.