If your bills keep piling up, but you are concerned about filing for bankruptcy because you do not want to lose your home, Chapter 13 may be a good option for you. Contact an experienced bankruptcy attorney to discuss your options.
Chapter 13 bankruptcy protection enables qualified individuals to place debts, such as car payments, mortgage payments, income taxes and other obligations, into a repayment plan. At the law office of Mark T. Young & Associates, we provide comprehensive Chapter 13 bankruptcy representation. We invite you to learn more about how Chapter 13 protection may be the best solution for your financial situation.
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Frequently Asked Questions About Chapter 13 Bankruptcy
Q: How does a Chapter 13 bankruptcy case work?
A: Chapter 13 of the federal Bankruptcy Code allows a consumer to repay all or a majority of his or her debts through a payment plan approved by the Bankruptcy Court. When the plan is in place, creditors generally are prohibited from collecting debts directly from the debtor. Instead of paying his or her creditors directly, the debtor pays a certain amount every month to the Chapter 13 Trustee, and the Trustee distributes the money to the creditors, as provided in the Chapter 13 plan. When the last payment is made, the debtor is no longer liable for the remainder of his or her dischargeable debts.
Q: How long does it take to complete a Chapter 13 plan?
A: A Chapter 13 plan lasts for three years (36 months) unless the debtor can pay off all debts in less time. Under certain circumstances, the court may approve a plan that lasts as long as five years.
Chapter 13 Bankruptcy - An Overview
The bills are stacking up, demanding calls and letters are arriving with increasing frequency and despite the best of efforts, the overdue debts just cannot be paid. In such cases, filing bankruptcy under Chapter 13 of the Bankruptcy Code may provide a solution to what seems like an insurmountable problem. Once considered a last resort, bankruptcy has evolved into an accepted method of resolving serious financial problems. If you are facing serious financial challenges, it is important to seek the counsel of an experienced bankruptcy attorney at Mark T. Young & Associates in Hixson, TN, to determine whether filing under Chapter 13 is right for you.
Bankruptcy law provides two basic forms of relief: (1) liquidation and (2) rehabilitation or reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A reorganization or rehabilitation bankruptcy under Chapter 11 or 13 of the Bankruptcy Code is, however, the option often preferred by the courts. Under Chapters 11 and 13, creditors may be provided with a better opportunity to recoup what they are owed.
Debts that Remain After a Chapter 13 Discharge
A Chapter 13 discharge affects only those debts provided for by the plan. Any debts not provided for in the plan will remain, and the debtor will have to pay them in full, even after discharge. Additional exceptions to a Chapter 13 discharge include, generally, claims for spousal and child support; educational loans; drunk driving liabilities; criminal fines and restitution obligations; and certain long-term obligations, such as home mortgages, that extend beyond the term of the plan.
Effects of a Salary Increase on a Wage-Earner Plan Under Chapter 13
When a Chapter 13 debtor enters into a wage-earner plan, he or she commits the next three years' disposable income — that portion of the debtor's income not required to meet the necessary needs of the debtor and his or her dependents — to the repayment of debt. Often, a debtor's income will increase after the plan is in place, and the question arises as to what becomes of this increase in income.
Rebuilding Your Credit After Bankruptcy
Bankruptcy has a long-lasting impact on a person's credit rating and on his or her ability to obtain credit in the future. The impact is not entirely negative. In some cases, filing bankruptcy may actually improve a bad credit rating. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy.
Chapter 13 Resource Links
United States Bankruptcy Courts
The official website of the United States Bankruptcy Courts includes a variety of useful information about bankruptcy.
A glossary of bankruptcy terminology that explains, in layman's terms, many of the legal terms that are used in cases filed under the Bankruptcy Code.
Bankruptcy filing fees, maintained by the Administrative Office of the U.S. Courts on behalf of the U.S. Courts.
Official Bankruptcy Forms, Procedural Forms and the Bankruptcy Forms Manual.
Chapter 13 basics
General information about individual debt adjustment under Chapter 13 of the Bankruptcy Code.