Chapter 13 Bankruptcy Attorney in Springfield
Chapter 13 Bankruptcy is designed to offer a financial solution for debtors that may not meet the income qualifications of a Chapter 7 or for debtors who are looking for a debt reorganization. There is a misconception that all debts must be repaid in a Chapter 13 plan.
There are numerous factors that determine the type of bankruptcy plan and usually unsecured creditors do not get paid in full. The knowledgeable Chapter 13 bankruptcy attorneys at the Licata Bankruptcy Firm can advise you if a Chapter 13 is in your best interest and what plan will meet your financial needs.
An experienced bankruptcy attorney with focus on only bankruptcy law is crucial for a successful Chapter 13 process. The factors to calculate what must be paid to creditors is always changing due to new case law, trustee interpretation of statutes, etc.
Staying up to date on recent cases and creditor treatment in your area will ensure the best possible outcome. A miscalculated plan could lead to unnecessarily higher plan payments to creditors.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is designed to relieve debtors of their financial burdens through reorganization of debt. A discharge of any unpaid debts is obtained after all plan payments have been made.
These debts include unsecured debts including, but not limited to:
Debtors can also get relief from secured debts they have, for example, house or vehicle loans they cannot afford, without any deficiency amounts owed to the creditor after the surrender of collateral. In addition, Chapter 13 plans are useful for paying tax liabilities and child support arrearages both debts that are generally considered non-dischargeable.
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How to File for Chapter 13 Bankruptcy
A legal procedure known as Chapter 13 offers people with significant debts a lifeline by allowing them to reorganize their debt and pay it off over a three to five-year period.
Understanding Filing Fees & Costs
The financial implications of filing for Chapter 13 bankruptcy are significant, with costs encompassing court fees and attorney charges. Filing for Chapter 13 bankruptcy typically costs around $313, excluding attorney fees which can vary depending on the complexity of the case. Additional costs may include a Bankruptcy Trustee fee and mandatory financial counseling course expenses.
Debt Relief & Reorganization Explained
Chapter 13 is essentially a loan that allows debtors to consolidate all of their debts into a single monthly payment. This payment is sent to a court-appointed trustee, who afterward allocates the monies among creditors. This method offers debtors more time to resolve their debts, typically halting collections and foreclosures and providing much-needed breathing room.
Essential Documents for Filing
When petitioning for Chapter 13, a variety of documents must be submitted. It typically consists of comprehensive records of finances which may include income statements, a summary of assets, a record of living costs, and a complete list of all creditors and the amounts owed to each. This information assists the court in understanding how you're doing financially and developing a repayment plan that matches your ability to pay.
Schedule your FREE initial consultation by contacting Licata Bankruptcy Firm at (417) 213-5006 for a Missouri Chapter 13 bankruptcy lawyer.
Advantages of Filing for Chapter 13 Bankruptcy
One of the biggest benefits of a Chapter 13 bankruptcy in Springfield is the retention of all your property. Debtors will not lose an asset even if they are non-exempt or not protected by law.
Comparing Chapter 7 and Chapter 13
This is useful if there are things a debtor wishes to keep that they would otherwise lose in a Chapter 7 bankruptcy. For example, a luxury item like a boat or motorcycle or even a home that has equity above the protected amount can be retained in a Chapter 13 bankruptcy.
Chapter 13 bankruptcy is often the best option for debtors who are above the median, meaning their income is too high to file a Chapter 7 bankruptcy. This does not mean that you must pay all your unsecured creditors in the Chapter 13 process.
Understanding the Bankruptcy Means Test
Your attorney will calculate the means test for you which determines how much you must pay monthly towards your creditors. The test is complicated and takes a sophisticated bankruptcy lawyer to accurately complete.
However, in basic terms assume your household income is $4,000 a month. Your expenses towards house or lease payments, vehicle payments, taxes, food, insurance, daycare etc. are $3,800.
Then regardless of the amount of debt you owe, you would just have to pay $200 a month to satisfy the debt. Chapter 13 plans must go a minimum of 3 years and must complete within 5 years. Your attorney will evaluate your situation to determine the length of your plan.
Chapter 13 will stop a foreclosure on your home or repossession of a vehicle. Without a Chapter 13 filing, the creditor will demand full payment of the amount you are behind for you to retain the property. Chapter 13 will give you up to 5 years to catch up the amount you are delinquent and stop the legal action of foreclosure or repossession. You will retain the property and your first payment to the Chapter 13 trustee will not be due until 30 days after filing your case.
Debt Limits for Chapter 13 Bankruptcy
An individual whose combined secured and unsecured debts as of the date of filing for bankruptcy relief do not exceed $2,750,000 is eligible for chapter 13 relief, regardless of whether he or she is self-employed or operating an unincorporated business. 11 U.S.C. § 109(e).
