Chapter 13 Bankruptcy Attorney
Chapter 13 bankruptcy is a three- to five-year payment plan that compels you to pay a portion of your debt while allowing the rest to be discharged.
People who earn too much money to qualify for Chapter 7 bankruptcy file Chapter 13, but people with lower income can also file Chapter 13. The amount you must pay is determined by your income, assets, and debt. Certain taxes, arrears on secured loans (such as a mortgage or auto loan), and arrears on domestic support responsibilities must all be paid in full. While Chapter 13 has the advantage of allowing you to safeguard your assets from liquidation, you must pay creditors at least the value of your unprotected (“non-exempt”) assets. And, depending on your “disposable income,” which the law calculates using a mathematical formula, you may have to pay creditors more than this.
Benefits that are not accessible in Chapter 7 bankruptcy may be available in Chapter 13. In some cases, it can help homeowners remove a second mortgage from their house permanently, lower the interest rate on a car loan, reduce the total owing on a car loan, and lower the amount of a tax lien. Your non-exempt property may be protected from liquidation if you file for Chapter 13 bankruptcy. In addition, it can prevent foreclosure or repossession by allowing you to make up missed payments (arrears) on secured debt over a three to five-year period.
WHAT KIND OF PEOPLE ARE QUALIFIED FOR CHAPTER 13 BANKRUPTCY?
In general, Chapter 7 bankruptcy is more restrictive because it requires you to pass the “means test.” Even if you qualify for Chapter 7, you can still file for Chapter 13. However, there are some limitations to Chapter 13 bankruptcy eligibility. To begin, you must be a person or two individuals filing jointly. Corporations and limited liability companies (LLCs) are not eligible for Chapter 13 bankruptcy. Second, you must have a steady source of income, such as social security or a pension. Third, when you file for bankruptcy, your total unsecured debt cannot exceed $465,275, and your secured debt cannot exceed $1,395,850. These loan restrictions are changed on a regular basis and are especially important for small business owners who have a lot of debt.
Chapter 13 bankruptcy Attorney Loomis and Greene can assist you in determining whether you qualify for it.
IN A CHAPTER 13, HOW MUCH WILL I HAVE TO PAY?
You will be required to make payments to the bankruptcy trustee for three to five years if you file for Chapter 13 bankruptcy. Your contributions will be distributed by the Trustee in accordance with the conditions of your Chapter 13 plan. Your Chapter 13 plan payment amount is determined by your income, assets, and debts. Your Chapter 13 plan must at a minimum address certain type of debts, such as certain taxes, secured debt arrears, and domestic support obligations. Income tax liabilities for returns due in the last three years must be paid through your Chapter 13 plan, but responsibility for returns due more than three years ago is unlikely to be paid. Sales taxes and payroll taxes must be paid through your Chapter 13 plan if you are personally liable.
Furthermore, if you are behind on a secured obligation, such as a car loan or a mortgage, and you want to maintain the collateral (car, house) you must pay the arrears (the amount you owe on the loan as of the day you file bankruptcy) through your Chapter 13 plan. If it involves resolving arrears on a secured loan, you must also make timely payments on the secured debt. These payments do not have to be made through your Chapter 13 plan and can usually be made directly to the creditor.
If you owe child support, alimony, or maintenance when you file bankruptcy, you will almost certainly have to pay these debts through your Chapter 13 repayment plan. Furthermore, you must continue to make all domestic support payments that are due during your bankruptcy. Domestic support obligations that become due after you file bankruptcy are usually paid directly to the receiver of the obligation rather than through your Chapter 13 plan.
Other debts, such as unsecured debt (credit cards, medical bills, and personal loans), may or may not be discharged in a Chapter 13 bankruptcy. Your assets and income, on the other hand, may be used as a foundation for you to be required to repay some of your debt in Chapter 13 bankruptcy. Your creditors cannot fare worse in a Chapter 13 bankruptcy than they would in a Chapter 7 bankruptcy, according to the law. This means that Chapter 13 integrates the asset analysis of Chapter 7, in which the law defines a certain property that you can keep (“exempt”). If you have “non-exempt” property, you must pay the value of that property to your creditors in Chapter 13 bankruptcy.
If your salary is too high, you may have to pay even more to your creditors. If your household income for the six months before to filing (current monthly income) is more than the Colorado median income for your household size, the amount you must pay in Chapter 13 bankruptcy will most likely be determined by the complicated calculation of the long-form “means test” (also used to determine eligibility for Chapter 7 bankruptcy). The method begins with your typical monthly household income and allows you to subtract a variety of expenses from that income, including:
Developing the most advantageous Chapter 13 repayment plan for you, in general, necessitates legal counsel. Chapter 13 bankruptcy is a difficult and combative process. In a Chapter 13 bankruptcy, Loomis and Greene has the experience, knowledge, and skill to assist you receive the lowest payment feasible.
WHAT FACTORS DECIDE WHETHER I’M ELIGIBLE FOR A THREE-YEAR OR FIVE-YEAR CHAPTER 13 REPAYMENT PLAN?
In most cases, bankruptcy law mandates you to pay into a Chapter 13 plan for three to five years. Unless you are repaying all of your debt in bankruptcy, you must be in a five-year Chapter 13 plan if your household income for the six months preceding to filing (your Current Monthly Income) is over the median income for your household size in Colorado. You can choose a plan term between three and five years if your household income for the six months before to filing was less than the median income for your household size in Colorado.
Loomis and Greene can assist you figure out if you qualify for a three-year Chapter 13 plan or if you need to stay in Chapter 13 for five years.
WHAT ARE SOME OF THE ADVANTAGES OF CHAPTER 13?
While Chapter 7 bankruptcy is the most common and favored option, Chapter 13 bankruptcy offers a number of advantages that Chapter 7 bankruptcy does not.
The following are some of the advantages of filing for Chapter 13 bankruptcy:
To take advantage of these benefits, our Chapter 13 bankruptcy attorney can assist you in determining if you should file.
WHAT TYPES OF DEBTS CAN BE DISCHARGED UNDER CHAPTER 13?
A Chapter 13 bankruptcy can eliminate the following debts:
Loomis and Greene can help you figure out which of your debts are dischargeable and whether you have any that aren’t.
WHAT DEBTS AREN’T DISCHARGEABLE IN A CHAPTER 13 BANKRUPTCY?
The following debts are not dischargeable in a Chapter 13 bankruptcy:
Loomis and Greene can help you figure out which of your debts are dischargeable in bankruptcy and whether you have any that aren’t.