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Phoenix Chapter 13 Bankruptcy Lawyers
Being up to your neck in debt can be about as pleasant as hearing nails against a chalkboard. The reality of the situation is that things happen sometimes and your finances may get out of control. It’s also possible you are dealing with other issues in your life that affect your ability to be current with any payments owed to creditors. If you feel like you fall under those categories, you are not alone. Fortunately, there may be options available for you to escape the clutches of crippling debt. Chapter 13 bankruptcy may be worth a look at if you are trying to be proactive in getting rid of your debt. Not all bankruptcies are the same, and Chapter 13 bankruptcy is no different.
Understanding the details and requirements to file for Chapter 13 bankruptcy can get tricky. It is recommended that you consult with a law firm that has experienced bankruptcy attorneys in Phoenix waiting to help you sail across the troubled waters of your situation and bring you back to shore. If you are worried that you may not be able to afford a bankruptcy attorney, plans that require zero down for legal aid may be available to you.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is quite different than a Chapter 7 bankruptcy in a few key ways. Chapter 13 bankruptcy is less of a liquidation of assets and more of a reorganization of debt. While Chapter 7 bankruptcy may cause you to lose properties, including your home, Chapter 13 does not require you to let go of your properties in order to pay creditors. Instead, you will submit a repayment plan to the bankruptcy court that consolidates some of your secured and unsecured debt into a more digestible bi-weekly or monthly payment plan. This restructuring allows you more flexibility to sustain your living expenses and keep your home. However, even though your home is saved from foreclosure, doesn’t mean you can stop making payments on it. Your repayment plan may be separate from your mortgage, so it is important to make consistent payments on both while your plan is enacted.
Payment plans can last anywhere between 3-5 years. Once you are finished with your repayment plan, you may be clear of owing certain creditors any more money. Situations vary and certain requirements must be met to file for Chapter 13. Be sure to consult with a lawyer experienced in bankruptcy law to determine your best course of action. A Chapter 13 bankruptcy attorney provides you with advice and guidance, from determining your eligibility to helping you with a cost-effective payment plan, to make sure your bankruptcy goes smoothly.
HOW IS CHAPTER 13 BANKRUPTCY DIFFERENT THAN CHAPTER 7?
The main difference between Chapter 7 and Chapter 13 bankruptcy is the debtor’s ability to keep their property rather than selling it to repay creditors. When you choose to use Chapter 7 to file for bankruptcy, you will be required to liquidate or sell some or all of your property in order to pay off debt. This is often the best choice for someone who doesn’t own many assets or whose income is limited. This is why Chapter 7 bankruptcy is typically referred to as liquidation bankruptcy. Both businesses and individuals may file for Chapter 7, and eligibility requirements may affect your ability to qualify.
On the other hand, Chapter 13 is known as reorganization bankruptcy because it allows you to keep your property (including secured assets) as long as you successfully complete a three to five-year payment plan determined by the court. This means those who file under Chapter 13 are able to stop foreclosure proceedings and may be able to cure delinquent mortgage payments over time. Businesses cannot file for Chapter 13, only individuals with regular income and unsecured debts totaling not more than $419,275.00 and secured debts of no more than $1,257,850.00. In any case, you may want to consult a seasoned bankruptcy attorney to see which chapter will work best for your situation.
What Goes into a Chapter 13 Repayment Plan?
Soon after you petition for Chapter 13 bankruptcy, you must provide the court with a repayment plan that suitably fits within the realm of your budget. The court must approve this repayment plan before moving forward with your bankruptcy so it is important to determine a reasonable and fair fixed payment when creating your payment plan.
It’s important to take your living expenses into consideration when creating a payment plan. If you have children, be sure to budget accordingly. The court will take all your factors into consideration when approving or denying your plan. Ideally, you should get a bankruptcy attorney to help you determine the best possible repayment plan that works towards not only paying your creditors and giving you debt relief but allowing you to maintain a solid quality of life.
Am I Eligible for Phoenix Chapter 13 Bankruptcy?
Just like Chapter 7 bankruptcy, Chapter 13 bankruptcy requires certain criteria to be met. You must have a consistent income in order to apply for Chapter 13 bankruptcy. You must also not exceed a certain limit of debt. If you owe more than the maximum debt allowed for Chapter 13 bankruptcy, you may not be eligible to file for it. A bankruptcy attorney can determine if you meet the requirements to file for bankruptcy and talk to you about how you should move forward towards debt relief.
WHAT MISTAKES SHOULD I AVOID WHEN FILING FOR CHAPTER 13 BANKRUPTCY?
Over 757 thousand bankruptcy petitions were filed in the United States in 2020 alone, with the majority of them being personal (non-business) filings. Many of these petitions result from job loss, medical expenses, or financial difficulties aggravated by the nationwide lockdowns following the pandemic.
If you are struggling with debt, you may be looking for options to help you get back on track financially, and may be considering if filing a Chapter 13 bankruptcy petition is right for you. Our bankruptcy law firm assists countless clients in the same situation. Here are some basics about Chapter 13 as well as common mistakes to avoid
There are many mistakes that must be avoided by debtors filing for Chapter 13, but the top 3 worst mistakes are without a doubt, missing payments, collecting new debt and hiding assets. Filing for Chapter 13 bankruptcy is not something to be taken lightly. Missing a Chapter 13 payment can quickly result in undue headaches such as creditors obtaining permission to foreclose on your house or repossess your vehicle. It is best to avoid missing a payment, and if you do, you need to make up for it as soon as possible.
Collecting new debts shortly before filing for Chapter 13 is usually frowned upon by the courts, and may result in the court denying your bankruptcy filing or not allowing the newly-accrued debt to be discharged. If your bankruptcy filing is approved, you may find yourself paying both the new debt as well as your bankruptcy payments, on top of all your regular living expenses. Last, there is no reason to hide any assets when filing for Chapter 13.
Not only is it considered legal deception, but it can also hurt your chances of having your case accepted by the court. It is also unnecessary, because the objective of using Chapter 13 is to protect your assets from creditors – trying to hide them or transfer them to family and friends may be considered fraud and will only harm your case, possibly even costing you a discharge.
HOW CAN A PHOENIX BANKRUPTCY ATTORNEY HELP ME?
Filing for bankruptcy is a serious step and should only be considered after you have exhausted all other avenues and still find yourself buried in unmanageable debt. If bankruptcy is your last resort, recruiting the help of a seasoned bankruptcy attorney is fundamental. While you are legally allowed to file for bankruptcy without an attorney, you might be harming your chances of successfully receiving approval for a payment plan, and it may end up costing you more in the long run.
Not only can an attorney help you navigate important decisions (such as ‘should you file for Chapter 7 or Chapter 13?’), but they can also be instrumental throughout the process by carrying out tasks such as applying the means test, valuing your property, applying exemption rules and determining which debts will be eliminated (discharged) and which will remain.
Statistically speaking, less than 2% of Chapter 13 filers who represented themselves were able to secure a payment plan, according to a report by the U.S. Bankruptcy Court for the Central District of California (the busiest bankruptcy court in the country)–represented filers were 23 times more likely to have their Chapter 13 plan confirmed! If you are considering filing Chapter 13 bankruptcy, the attorneys at Israel & Gerity, PLLC, are here to assist you. Contact us for a free consultation to learn more.
Can a Chapter 13 Attorney Help Me With a Bankruptcy Plan?
Filing for bankruptcy can be an intimidating challenge. It’s completely natural to feel overwhelmed by the process. Your future may seem unclear when preparing to file for Chapter 13 bankruptcy but a proper bankruptcy lawyer by your side can help you clear a path towards financial freedom. Don’t head to bankruptcy court alone. Israel & Gerity, PLLC can provide you with hospitable service and sage advice that can help you go through the Chapter 13 bankruptcy process.
Spend less time worrying about your future and more time paving it with the help of a trusted bankruptcy lawyer from Israel & Gerity, PLLC. For a free consultation about your Chapter 13 bankruptcy case, contact Israel & Gerity, PLLC at 602-274-4400.
202 E Earll Dr #440
(833) 274-4400
