If you or your business finds itself in need of assistance due to a significant amount of debt, you may be eligible to file for Chapter 13 bankruptcy. The most beneficial option if you find yourself in this situation is to work with a Chapter 13 bankruptcy lawyer in Texas.
Whether you have lost income after having a previously thriving business or are simply struggling to find a job to pay off debts and daily expenses, Chapter 13 bankruptcy might be an option for you.
Bankruptcy allows someone to restart their finances, essentially stopping their creditors from collecting debts until they’ve sorted out their current ones. A Chapter 7 bankruptcy allows all debts to be legally canceled, though a Chapter 13 bankruptcy requires you to pay some or all of your debts depending on a payment plan.
It’s essential you have a method of earning income through your process, as the court can immediately drop your payment plan if you fail to pay on time. These payment plans can last several years at a time, and you must meet certain criteria in order to qualify in the first place.
Bankruptcy can be separated into multiple categories, yet only some individuals and businesses can qualify for Chapter 13. If you wish to file for Chapter 13 bankruptcy, you must attend financial counseling with a credit counselor. This allows them to help you better manage your finances and determine how to proceed with the overall process. You’ll also be required to attend a debtor education class alongside going to counseling.
As far as how much debt you must have accrued, you can file for Chapter 13 bankruptcy if your total secured debt does not exceed $1,184,200 and your unsecured debt does not exceed $394,275. Also, you cannot have had a bankruptcy petition dismissed within the previous 180 days. If you willingly failed to appear in court or didn’t comply with their orders, you won’t be eligible to file for Chapter 13 or any other chapter due to your prior actions.
If your amount of debt is within range of the aforementioned limitations, you can file for Chapter 13 and begin the process. The court, after looking over your documents, can then begin performing collection activities in order to pay off your debt. These activities can include:
By accepting the terms outlined in the repayment plan and being able to qualify initially, you can begin paying off your debt. While the process is lengthy, it is designed to help you pay off your debts without increasing the amount you owe.
Filing for bankruptcy without first speaking to legal representation can be risky, as you may forget key details that could make your situation easier. If you fail to account for all of your debts, you risk a more complicated repayment process, yet a knowledgeable bankruptcy lawyer can help you address any concerns you have during your process.
You may not know if you meet the various Chapter 13 bankruptcy requirements or if you were previously denied bankruptcy for unknown reasons. For these reasons, it’s wise to meet with legal assistance prior to filing, as they can ensure you submit accurate paperwork.
A: Chapter 13 bankruptcy is a plan that lets individuals or businesses pay off their debts within three to five years while maintaining some of their assets. The money is collected during this period through techniques such as wage garnishment, foreclosure, and more. If the debtor cannot make a payment when required, the entire case will be dropped, and the debts won’t be eliminated. However, in some cases, you won’t have to pay your entire amount of debt.
A: To qualify for Chapter 13, you must be able to make enough income per month to pay off your debt according to your plan. Also, to initially qualify, your secured debt must be no more than $1,184,200, and your unsecured debt cannot exceed $394,275. If you stay within this range, continue making payments, and stay up-to-date with any changes and tax filings, you can qualify for this form of bankruptcy and slowly decrease your debt.
A: There are multiple downsides of the Chapter 13 bankruptcy plan, despite the plan seeming the most beneficial to some. For example, this process can take up to five years to complete, you won’t be able to access any credit cards, you’re prevented from switching to Chapter 7 bankruptcy, and you must meet more criteria to qualify than other plans. This all may appear daunting, but this type of bankruptcy can still be effective.
A: There is no right time to file for bankruptcy, but there are a few signs that you should proceed with filing. For example, if your debt is within range of the previously mentioned amounts, or you can’t file for Chapter 7, you can make preparations to file for Chapter 13. On the other hand, a lawyer can examine your full financial situation and determine if you would benefit from filing for Chapter 13 or not.
Steele Law Firm, PLLC is ready to assist local clients in the Fort Worth, TX, area with their bankruptcy questions or concerns. This process can be confusing and difficult to understand fully, and you may not successfully qualify for Chapter 13 bankruptcy despite your situation. However, there might be other options a lawyer can help you with.
No matter your circumstances, we’re prepared to review your information and assist you with your process. We intend to look over your documentation to ensure its accuracy while providing you with reliable advice during your repayment plan.
To learn more about Chapter 13 bankruptcy and how we can help, contact us today.
