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.
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
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