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Sometimes bad things happen to good people. If those bad things include finding yourself with serious financial problems, you may want to consider filing Chapter 13 bankruptcy. Chapter 13 of the U.S. bankruptcy code allows people who have a regular income source the opportunity to reorganize their financial affairs and propose a plan to a bankruptcy judge whereby they can repay the money they owe to their creditors over a period of 3 to 5 years. One of the benefits of Chapter 13 bankruptcy is it enables people to retain ownership of their property.
Individuals who are considering bankruptcy generally have two options. They can file for Chapter 7 or Chapter 13 bankruptcy protection. Chapter 7 bankruptcy is sometimes called debt liquidation because it gets rid of all your debts without you having to repay any money to your debtors. However, a person filing Chapter 7 may have to give up their homes and automobiles. Chapter 13 bankruptcy, on the other hand, is called debt reorganization. People who file Chapter 13 must make arrangements to repay their debt. With the help of the bankruptcy court the person filing Chapter 13 is given the opportunity to make a series of payments to satisfy their debt.
Depending on the amount of money you owe and the amount of your regular, verifiable income, the bankruptcy court will decide whether you are eligible for Chapter 13 bankruptcy. If you qualify, they will create a debt repayment plan which will be administered by the court. People whose applications to file Chapter 13 are accepted usually have their attorneys negotiate with the bankruptcy court on the size of their monthly payment and whether that payment will be made for three or five years to satisfy their debt.
Under Chapter 13, some debts will be paid in full while some creditors will receive only a percentage of the money they are owed. The unpaid portion of the debt may be discharged when the Chapter 13 plan has run its course if the bankruptcy court deems you have made a good faith effort to pay off all your debts. Many people prefer to file for Chapter 13 bankruptcy because they can get to keep their home and their automobile while they work to repay their debt. People who file for Chapter 7 bankruptcy often have to forfeit all their assets to satisfy their creditors.
There are many benefits to filing for Chapter 13 bankruptcy. One benefit is it allows people to stretch out the repayment of their taxes, student loans, and other types of non-dischargeable debts for up to 5 years. Another benefit of Chapter 13 bankruptcy is it allows the debtor to avoid foreclosure on their home and prevent the repossession of their vehicle if they have fallen behind on their payments. The debtor is given an opportunity to make up those missed payments as part of their bankruptcy plan. Chapter 13 also prevents creditors from going after cosigners to make them repay the loan.
Not everyone is eligible to file Chapter 13. In order to qualify you must have enough regular income to make the required monthly payments to the bankruptcy court while continuing to pay the ongoing expenses you have. However, people who have large incomes and want relief through bankruptcy do not qualify for Chapter 7 and must file for Chapter 13 protection. The bankruptcy process is complex. You need the help of an experienced bankruptcy attorney. We can help. Contact us and we will schedule a free consultation and answer any questions you have about the process.
Bankruptcy laws vary slightly from state to state. We are experts in New York State bankruptcy law. We can help you to understand the laws, exceptions, and statutory requirements for filing Chapter 13 bankruptcy in New York State. This includes the fact that the bankruptcy court can approve your application for Chapter 13 bankruptcy whether or not your creditors approve of the plan. We will discuss homestead exemptions, motor vehicle exemptions, and other pertinent facts related to your specific set of circumstances.
We can show you how you can protect the assets and lifestyle of you and your family. We have many years of experience dealing with Chapter 13 bankruptcy filings in New York. When you retain our services, we will give you the benefit of our experience and help you to navigate what can be a difficult process. Our attorneys will give you step by steps directions for dealing with the entire process and explain what you can expect to face. With our support, directions, and legal advice we can help to make what can be a byzantine process clear and simple and work with you and the bankruptcy court to help to create a plan that will enable you to get a fresh start.
Bankruptcy can be an unpleasant event, but with the right background information, you will feel much better about the process. Bankruptcy is a way for people who have accumulated a lot of debt to restructure that debt. It can lead to new payment plans or debt forgiveness for you, although there are likely negative consequences as well, which might include the loss of assets and a sharp decline in your credit score. There are two main types of bankruptcy than individuals will face: chapter 7 bankruptcy and chapter 13 bankruptcy. Both types involve discharging debt, but they differ in the type of debt and income that the people who go through it have.
The key idea behind bankruptcy is that sometimes, for many reasons, people wind up with debt that is simply too large for them to ever feasibly pay off. They need to go into bankruptcy. This is a process where the person alerts whoever has lent them money that they are insolvent and that everyone needs to come to some kind agreement about how to pay back the money, because it is impossible to fulfill the original contracts governing the loans. Bankruptcy is a formal, legal process that involves a court and bankruptcy judge overseeing the negotiations between the creditors and the debtor.
During bankruptcy, the debtor needs to show the creditors that they really cannot afford to pay the loans. During the process, creditors are prohibited by law from continuing to try to collect their money- they need to wait until all parties work out a payment plan.
Chapter 13 bankruptcy is meant for people who have large, secured loans. These are loans that have some kind of collateral, like mortgages, which use the house as collateral. Chapter 13 bankruptcy is appropriate for these loans because it can protect the person’s assets from being taken away. Chapter 13 is also suitable for people who have a meaningful income: people who do not make enough money must file for chapter 7 instead of chapter 13. There are also limits on how much debt a person can have when they file for bankruptcy: $383,175 in unsecured debt or $1,149,525 in secured debt. Additionally, when it comes to working out the payment plan itself, the plan must not take longer than 5 years to complete. Generally, it will be between three and five years.
The objective of chapter 13 bankruptcy is for the debtor to come out on the other side with their assets intact and with a plan in place to pay down their debt. This is particularly useful when some of the debt is a mortgage, because that allows the person going through bankruptcy to keep their house. In addition, although this negatively affects the credit of the person going through bankruptcy, the bankruptcy will come off that person’s credit report seven years after they declare. They will need to spend much of that time paying back their debt anyway, so they should not need much in the way of credit access.
While Chapter 13 bankruptcy is unpleasant, it is a necessary evil. It lets people make it through excessive debt without having to lose their homes. Chapter 13 bankruptcy is a complex legal process, so it is not recommended that anyone go through it without the help of an attorney.
We are an experienced and professional law firm in New York specializing in bankruptcy. Our combined decades of experience has shown us many different kinds of bankruptcies, so we are sure to have the knowledge that can help you get through your own Chapter 13 bankruptcy in the best possible shape. We devote all of our resources to protecting your interests in court. We know both the law and the way it is typically enforced, so we understand how to help you work with the court. We understand how difficult and trying an experience bankruptcy can be, and you shouldn’t need to have to negotiate the complexities of the law on your own while you also defend your assets in front of a judge. If you work with us, we can be your guide as you move through the process as well as strong advocates for your property. If you need to declare bankruptcy, don’t give up hope. Usually, people come out of bankruptcy and put themselves on the path to be in better financial shape than before.