Understanding Chapter 13 Bankruptcy With A Bankruptcy Attorney
Bankruptcy can be a life-changing experience. Whether you are struggling with medical bills, credit card debt or any other form of debt, filing for bankruptcy can help you get a fresh financial start. Regardless of the type of bankruptcy that you file, it is important to seek the assistance of an experienced Phoenix Chapter 13 Bankruptcy Attorney.
A qualified and experienced Phoenix Chapter 13 Bankruptcy Attorney can make all the difference in ensuring that your case is filed correctly and has every possible advantage. They will review your entire financial situation to determine if you are eligible for chapter 13 and then assist you in creating a repayment plan that works best for you.
The Chapter 13 process involves preparing and submitting a budget, bankruptcy schedules, and other significant documentation to the Court for confirmation. It also involves negotiating with creditors about their claims and obtaining approval for the plan. This can be an extremely difficult process and requires the services of an experienced Phoenix Chapter 13 Bankruptcy Lawyer.
Your Phoenix Bankruptcy Lawyer will be able to guide you through the process, ensure that all your debts are covered, and explain any complications or issues that could arise along the way. They will also represent you in court, if necessary.
Chapter 13 Bankruptcy is a debt relief process that allows individuals to pay off their debts over a period of three to five years. It is often used as a solution for people who are not eligible to file for bankruptcy under Chapter 7 or who have nonexempt assets that they wish to protect from being liquidated in a Chapter 7 case.
Unlike Chapter 7, in which nonexempt assets are liquidated in order to pay off debt, in Chapter 13, debtors can keep valuable property like their homes and cars while they make court-approved payments under a reorganization plan. This can be especially helpful to people who are behind on their car or mortgage payments and want to catch up before the house is foreclosed upon.
Lien Avoidance and Stripping
Certain liens can be avoided through the Chapter 13 process, such as IRS liens on real estate. Other types of liens may be stripped from your home, such as second mortgages, and the principal balance on secured loans can be reduced through a loan cramdown.
Disposable Income Test
In a Chapter 13 bankruptcy, the debtor’s current monthly income must be sufficient to support a proposed Chapter 13 repayment plan and ongoing living expenses. This is based on the debtor’s average monthly income from all sources over the six months before filing for bankruptcy. This includes both the debtor’s income and that of any spouse living in the same household, as well as any contributions to the household’s expenses made by other persons (usually other adult family members).
Unsecured Debts Are Not Discharged
Unless you qualify for an exception or have completed an approved financial management course, most unsecured debts are not discharged during the bankruptcy process. This includes many credit cards, student loans and medical bills.