Chapter 13 Bankruptcy
Do you work and earn a decent salary but still need to “catch up” on your bills? Are you facing foreclosure of your home and need time to bring your mortgage payments current? If so, working with the Law Office of Corey L. Scott, P.C. to file a Chapter 13 bankruptcy may be the answer.
In a Chapter 13 bankruptcy, you are allowed to keep all of your property and pay towards your debts over a three (3) to five (5) year repayment plan. Chapter 13 allows you to save your home from foreclosure while you catch up on mortgage payments, prevents you from having your car repossessed and could save you money by allowing you to pay what the car is worth instead of what is owed. Additionally, Chapter 13 allows you to protect co-signors so that they are not negatively impacted. Call us now at 317.634.0101 to schedule your free consultation.
Is Chapter 13 right for me?
Every person or family has a very unique set of circumstances, so there is no one size fits all answer to this question. However, Chapter 13 bankruptcy may be a good option for you if you:
- Are working and have a steady source of income?
- Are making enough income so that you have monthly disposable income?
- Are in fear of losing your home to foreclosure because of a temporary setback?
- Are seeking a consolidation plan that allows you to “catch up” on past due bills?
- Are able to make payments towards debt reduction after paying for necessities?
Qualifying for Chapter 13 Bankruptcy
Chapter 13 bankruptcy protection is for people with a dependable and steady source of income because you are required to use your income to repay some or all of your debts. Therefore, when seeking Chapter 13 protection, you must prove to the bankruptcy court that you can make payments according to your proposed repayment plan. If your income is irregular or too low, the Court will deny the request to file a Chapter 13 bankruptcy. Also, you must have less than a certain amount of secured and unsecured debt and you must have received approved credit counseling within the past 180 days. My office will be able to quickly assess whether you qualify for Chapter 13 protection during your free consultation. Please call now to find out if you qualify, phones are answered 24/7 at 317.634.0101.
After I qualify, how does the Chapter 13 process work?
Soon after you provide my office with the necessary documentation, which usually includes: your last 3 pay stubs, last three (3) years of tax returns, your most credit report if you one, if not we can pull your report for you and a completed bankruptcy questionnaire, we are ready to file your petition. However, it should be noted that the new federal bankruptcy law requires that any overdue tax returns be filed within weeks of filing a Chapter 13 bankruptcy and you must complete approved credit counseling prior to filing and a debt management course after the filing but prior to the discharge of your bankruptcy.
Your bankruptcy begins with the filing of the petition, schedules and a “statement of affairs” with the bankruptcy court. The petition will include a complete list of all assets, creditors, income, and potential assets such as personal lawsuits and inheritances. Most importantly, we will prepare and present a proposed repayment plan to the court for review and approval. At this point, your estate (property) is protected by the "automatic stay", which bars creditors from trying to collect debts without the permission of the bankruptcy court. This provides immediate protection against foreclosure, repossession of your car, eviction from your apartment, garnishment of your wages or bank accounts, cut off your electricity, or other measures creditors may take to try to recover monies owed.
Approximately twenty (20) to forty (40) days after you file your petition, the trustee will hold the “first meeting of creditors” or “341 meeting.” This is the only hearing that most people have to attend. It is called the first meeting of creditors because in theory, this is the hearing that creditors can come to voice any objection that they have to you discharging your debts through Chapter 13 bankruptcy. However, in reality, creditors almost never attend the hearing, so you and I will attend the meeting and the trustee will ask questions to verify your identity and address and assure that you have listed all of your assets, creditors and income. Additionally, this is normally when the bankruptcy will ask any questions regarding the proposed repayment plan that my office will prepare for you. Sometimes the trustee will recommend changes to the plan, which we will make on your behalf to make sure that the plan is approved.
When the plan is approved, the court will appoint a trustee to collect your payments, to distribute them to creditors, and to supervise your compliance with the court-approved repayment plan. The repayment period typically lasts from three (3) to five (5) years.