Chapter 13 Bankruptcy Basics
There are two main ways to file personal bankruptcy under the U.S Bankruptcy Code: Chapter 7 and Chapter 13 Bankruptcy. Chapter 13 Bankruptcy allows debtors to consolidate their outstanding debt through the form of a wage earner’s plan. It allows debtors to develop a plan to repay their outstanding debt by monthly installments. Usually, these installments occur over the course of three to six years. Chapter 13 Bankruptcy has its advantages. Most notably, it ceases all foreclosure proceedings after filing. Delinquent mortgage payments can be paid over the course of the plan along with the current ongoing mortgage. Chapter 13 Bankruptcy is ideal for those looking to keep significant assets, while wanting to spread out the time period to pay past due accounts and debt. Individuals who are able to pay regular living costs but may have fallen behind on mortgage and automobile payments should strongly consider filing under Chapter 13.
To qualify for relief under Chapter 13, any individual, even if self-employed or operating an unincorporated business is eligible for Chapter 13 relief. The Consumer Price Index however, determines the allowed amount of debt an individual debtor must be below to qualify. Currently, any individual debtor whose unsecured debts are below $419,275 and whose secured debts are less than $1,257,850 may qualify. These numbers are subject to change by law. If eligible, the case proceeds by filing a petition with the court. The debtor is responsible for also filing a schedule of current income, schedule of assets and liabilities, a schedule of current financial state, and a schedule of contracts and unexpired leases. It is vital that the inquiry be done with care; any inconsistencies may be noted as fraud and can severely affect the success of your filing. A certificate of credit counseling by a credit service is also required prior to filing. An impartial trustee will be appointed and will review your tax return in addition to the remaining documents in your filing.
Your case trustee will be appointed with the responsibility of conducting a deposition-like meeting with you, and your creditors may also be in attendance. The case trustee is tasked with gathering information about your financial history, current financial status and property within your possession. Creditors are given a period of 90 days from the first meeting to file any additional claims with the court. Simultaneously, a debtor must file a repayment plan with the petition or 14 days after the filing of such petition for court approval. In accordance with the law, even if the repayment plan has not been reviewed or approved by the court, it is the debtor’s responsibility to immediately began making payments to the trustee within 30 days after filing with the court. If the court does not confirm the plan, there are alternative options available. The debtor may file a modified plan or switch to convert the case under chapter 7. For more information regarding Chapter 7 Bankruptcy, click here. Our Bankruptcy Attorneys serving Jackson and the State of Mississippi can consult to answer any additional question regarding the differentiation between Chapter 7 and Chapter 13.
Chapter 13 is a great option for individuals who have a steady income and can pay their regular expenses but may not be able to handle their outstanding debt. Chapter 13 Bankruptcy does not involve liquidation of current assets but rather a repayment plan that usually stays in effect for a number of years.
Our Bankruptcy Attorneys at Davis & Williams have an extensive track record of satisfying clients who inquire about their options for Bankruptcy filing. Below you can find important information ensure you understand the duties of a competent, quality Bankruptcy Attorney.
Contact Us today for a Free Consultation.
Our Bankruptcy Attorneys at D&W are located in Jackson, Mississippi.