Chapter 13 Bankruptcy Information
If you have sufficient income to repay most of your debts but are unable to meet the current demands of all creditors, Chapter 13 bankruptcy may be the approach for you. You will file your petition with the bankruptcy court along with a reorganization plan. Your reorganization plan will demonstrate to the court how you expect to repay your debts over a three to five-year period of time. You must also show the court that you have enough income to allow you to comply with the terms you have presented in your plan.
If you have met all the terms of your plan, at the end of your repayment period, remaining unsecured debt will be discharged. On the day you file your bankruptcy petition, all collection action by all creditors must stop. Creditor collection action cannot be conducted during the entire time the plan is in effect.
In a Chapter 13 case, a lot of emphasis is put on getting your case “Confirmed” or having a successful “Confirmation” hearing. But what exactly is confirmation, and why is it so important? I’d like to take this blog to explain the confirmation process and why its one of the most important but least well-known parts of Bankruptcy. Confirmation Explained Simply stated, confirmation is the process of getting your Chapter 13 plan officially approved by the Court. When you file a Chapter 13 case, you must also propose a plan for how you intend to repay your creditors. The plan…Read More
If you’ve filed a Chapter 13 bankruptcy case, there are certain aspects of the case you should be aware of in daily life. The one key point to keep in mind while your Chapter 13 case is active is that the Court will closely monitor your budget and financial situation. Sales and Transfers of Property Just about any sale or transfer of property has to be approved by the Court beforehand. And don’t forget, the Court describes “property” as any real estate or personal property. So any vehicles, boats, motorcycles, or any “big ticket” item has to be approved by…Read More
As my colleagues and I have discussed in previous blogs, a normal Chapter 13 bankruptcy case consolidates your debts and allows you to repay at least a portion of those debts over a period of up to 5 years. As the saying goes, life can come at you fast, and a lot can happen in 5 years. In today’s blog, I’d like to discuss some of the situations in which you may or may not want to continue your Chapter 13 case for 5 years’ time. How Chapter 13 Bankruptcy Works A Chapter 13 case is also known as a…Read More
When you decide that you need help with your finances, one of the choices you may make is to meet with a bankruptcy attorney to discuss your options. One option is known as chapter 13 and you sometimes hear people call this option the debt consolidation option because it works very similar as if you consolidated your debts. Last year, one of my colleagues outlined the Bankruptcy Process Overview. This blog post will outline specifically the process of chapter 13 from start to finish. You must complete a credit counseling course before you file chapter 13. A link to the…Read More
One of the most common ways to pay off accumulated medical bills and credit card debt is to take a home equity line of credit, or HELOC, on your home. According to a recent CNBC article by Diana Olick, homeowners are sitting on trillions of dollars in cash. How Is This Possible? In the third quarter of 2017, the amount of equity homeowners reached was at an all-time high of $5.5 trillion. HELOCs and refinancing an original mortgage are the two most popular ways to tap into money from the equity in your home. From there, you could either pay…Read More
If you have filed Chapter 13, you should know that you cannot incur a debt without the bankruptcy court’s permission during the life of your bankruptcy. We understand that situations may arise where you may need to incur a debt. The most common situations that arise where a debt may need to be incurred are: refinancing your current home mortgage purchasing a home or car financing equipment needed for utilities (i.e., water hearing, air conditioner, etc.) Filing a Motion to Incur Debt When a motion to incur debt is filed with the bankruptcy court, in the Middle District of Alabama,…Read More
Updated: 10/25/2017 by Nick Gajewski One of the most common concerns my clients have is whether or not filing a bankruptcy case will affect their job. The short answer is: no, filing a case should not have any impact. The Bankruptcy Code at 11 U.S.C. §525 explicitly prohibits employers from discriminating against any person who has filed for bankruptcy relief. Your employer would be breaking a federal law if they fire you or discriminate against you as a result of your bankruptcy. Protection Against Discriminatory Treatment (a) Except as provided in the Perishable Agricultural Commodities Act, 1930, the Packers and…Read More
As you can see from our information page, a Chapter 13 bankruptcy case is a form of debt consolidation. It allows you to reorganize your debts so they are easier to repay, and in some circumstances can reduce the overall amount of debt that is actually repaid. However, one of the aspects of a Chapter 13 case that can cause people worry or hesitation is the fact that a typical Chapter 13 bankruptcy can last for 3 to 5 years. Life can change dramatically over that length of time. So, naturally, people worry about being locked into a “payment plan”…Read More
The bankruptcy code defines an insider as either a relative, a relative of a general partner, a general partner of the person filing bankruptcy or a corporation in which the person filing bankruptcy is an officer, director or personal in control. When filing bankruptcy you must answer whether you have made a payment on any debt owed to an insider within the last 12 months of filing bankruptcy. The trustee will ask you this question, under oath, at your 341 hearing. Why does the trustee care whether I have repaid an insider money within the last year? The bankruptcy code…Read More
A creditor that wants to get paid in your bankruptcy case must file a proof of claim with the clerk’s office of the Bankruptcy Court. Most creditors must file their claim within a certain amount of time, typically 120 days from the date you filed your Bankruptcy petition. Governmental entities, such as the IRS or the State of Alabama, are given additional time or 180 days from your petition filing date to file a claim. It is extremely important to hire a competent lawyer who will review each and every claim that is filed in your case. The reason is…Read More