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.
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
This is one of the most common questions I’m asked. Debt consolidation (or Chapter 13 Bankruptcy as it is technically known) is one of the most common types of bankruptcy cases, and many people are familiar with how it works. We have written before about many of the details of Chapter 13 Debt Consolidation, but today I wanted to address the issue of how to qualify for a Chapter 13 case. How to Quality for Chapter 13 At first the answer seems simple. Almost anyone can qualify to file a Chapter 13 Debt Consolidation. But whether or not that case…Read More
There’s an old saying that most people have heard before: “What’s good for the goose is good for the gander.” But what does that phrase mean? Simply put, what’s fair for one person should be fair for the other. Effective January 1, 2017, Mississippi’s federal bankruptcy judges ordered that the “No-Look Fee” ceiling (or reasonable fee that an attorney may charge in a chapter 13 bankruptcy case) may be increased by $200. Fee Ceiling This new fee ceiling does several things. First, it does not overburden the consumer debtor, who is already concerned about his or her financial situation. Second,…Read More
What options do you have if 3 or 4 years into your 60 months (5 years) plan you lose your job or your income is reduced substantially? The answer is unfortunately, “It depends.” Is your case asset or income driven? Is your job loss permanent or temporary? Was it an unexpected expense, like a water heater failed or transmission needed to be replaced? Each scenario presents different answers. Suspend a Chapter 13 Payment Plan For instance, if it is a temporary job loss or an unexpected expense, a simple motion to suspend your Chapter 13 plan payment for up to 3…Read More
Many clients who file Chapter 13 may find their circumstances change as the years tick by in a five year Chapter 13 plan. They may get a divorce, have a new baby or their child may head off to college. With those life changes, the financial picture changes too. What Options Are Available? The best thing you can do is call your attorney. Your attorney will be able to assess your new situation and offer options that give you breathing room. Modify Your Plan A few options are that you may be able to modify your plan to surrender the…Read More
Once you have attended your 341 Hearing, that is typically the last hearing you as a Debtor will have to attend. However, your attorney must attend one final very important hearing called the Confirmation Hearing. The Confirmation hearing is in essence the final stamp of approval if you will on your Chapter 13 Plan by the Judge. While you typically do not have to appear in Court for the Confirmation Hearing, like I stated above your attorney most definitely has to appear. Behind the scenes, your attorney is or should have been working to correct any known issue that was…Read More
A Chapter 13 bankruptcy (also known as a Debt Consolidation) will bundle together all of a person’s debts so that the person filing makes only one payment per month to the Court. From there, the Court handles paying each of your creditors what they are supposed to receive under the bankruptcy laws. But how does the Court determine the amount of a person’s payment? Unfortunately it isn’t as simple as adding together your debts and dividing by the number of months in your plan. There are three different ways the Court looks at your case to determine what your payments…Read More
Chapter 13 is a section of the Bankruptcy Code that allows individuals and small business owners in financial difficulty to repay their creditors. When you file a Chapter 13 Bankruptcy Petition with your Bankruptcy Lawyer, one of the documents you will file is called the Chapter 13 Plan. That Plan sets out how your Secured creditors and Unsecured Creditors are paid and must be approved (Confirmed) by the Bankruptcy Judge. The approval usually occurs around 60 days after your file your petition at what is called a Confirmation Hearing. Requirements for Chapter 13 Bankruptcy One of the requirements of the…Read More
The goal every debtor has after filing bankruptcy is simple—a fresh start! Chapter 7 Bankruptcy offers a fresh start much quicker than Chapter 13 simply because the unsecured creditor’s debts are erased and allows you to pay for the debts you want to keep direct such as a mortgage or car payment. In Chapter 13, a plan typically is five years where you repay all or part of the debt you owe. The mortgage is usually paid direct to the mortgage company with any arrears included in the Chapter 13 plan. Behind on Mortgage During Bankruptcy One issue that arises…Read More
One very powerful remedy that financially strapped consumers have is a discharge pursuant to Chapter 13 of the federal Bankruptcy Code. Chapter 13 bankruptcy is so named because it is Chapter 13 of Title 11 of the United States Code. Title 11 of the United States Code is commonly known as the “Bankruptcy Code”. The other types of relief under Title 11 include Chapter 7 (liquidation), Chapter 9 (municipal bankruptcy), Chapter 11 (commercial bankruptcy), and Chapter 12 (family farmer and fisherman bankruptcy). The relief available through Chapter 13 is broad and can be positively life changing for individuals and families…Read More