When most people consider filing for bankruptcy, a common concern is whether they will be able to keep their property during the bankruptcy proceedings. While a Chapter 7 bankruptcy does involve selling off certain assets to cover debts, many debtors prefer to file a Chapter 13 bankruptcy because it allows them to retain ownership of their assets and property. Under a Chapter 13 bankruptcy, debtors structure a repayment plan in which they pay off their outstanding debts in monthly installments.
If you are facing overwhelming debt and having trouble paying your bills, a Chapter 13 bankruptcy may be the right solution for you. However, there are certain eligibility requirements for filing bankruptcy, and this process can be more complicated than it seems. Consulting with a bankruptcy attorney can help you determine whether you qualify for a Chapter 13 bankruptcy and help you navigate the complicated rules and regulations governing a bankruptcy case.
In a successful bankruptcy case, debts are discharged (forgiven) after you fulfill all the terms of your repayment plan, then your case is closed via bankruptcy dismissal. If your case is dismissed, this means that you no longer have an automatic stay to prohibit creditors from debt collection efforts and you will be legally liable for paying off all remaining debt. You may request a voluntary dismissal yourself, but most of the time, dismissals are involuntary and decided by the creditor.
The court will review a dismissal request by considering several factors, including the type of bankruptcy you have filed, the reason behind the request, the progress you’ve made in paying off your debt, and how a bankruptcy dismissal will impact your creditors. Bankruptcy cases can be dismissed for many reasons, such as failing to submit the proper forms, pay court fees, or attend mandatory education courses. If the court grants the dismissal request, your bankruptcy case will be closed, and you will be responsible for paying any outstanding debts that remain.
The bankruptcy court may dismiss your Chapter 13 bankruptcy case in any of the following circumstances:
Secured debts refer to debts based on collateral, in which the creditor has the right to take property back if you do not make payments. This includes mortgages and car loans, as well as debts that involve a creditor filing a lien against your property. Unsecured debts refer to debts without collateral, such as medical expenses, legal bills, utility arrears, and credit card debts.
Earned income can be from any of the following sources:
You must fill out a specific set of official bankruptcy forms, including a petition and schedules among other required forms. After filing your case, you will be asked to submit documentation that verifies the information you provided to obtain approval for your bankruptcy, such as pay stubs, bank account statements, expense reports, and tax returns.
Even before your repayment plan has been officially confirmed by the bankruptcy court, you must start making regular payments until the plan has been approved. Your payment plan’s specifications and deadlines will offer more information about your obligations, and you should start making these payments within one month of declaring bankruptcy.
Your Chapter 13 bankruptcy case may be dismissed for any of the reasons listed above, so it is crucial to secure legal representation right away if you are considering filing for bankruptcy. To ensure you follow the law and have the best chance of approval, contact Steele Law Firm today. Our bankruptcy attorneys can answer your questions, explain your debt relief options, and help you navigate the bankruptcy process to achieve the optimal results in your case.