When it comes to bankruptcy, many questions come to mind.
What type of bankruptcy should you file? What does it mean to be bankrupt? Can you file for Chapter 13 bankruptcy? Are you going to lose everything, including your home and car? What do you have to know?
The first thing you need to familiarize yourself with is what Chapter 13 is and what it entails.
Chapter 13 is one of the two most common types of bankruptcies individuals file in court; Chapter 7 being the other one. Whereas in Chapter 7, your debt gets wiped out, Chapter 13 means that you will be in a repayment plan overseen by a trustee. That repayment plan payment will be based on your disposable income in an amount based on what must be paid (such as being behind on mortgage or vehicle payments and taxes). The plan payment must be reasonable. At the end of your Chapter 13 the balance of debts not paid are eliminated through a discharge.
Are You Eligible?
In order to be eligible to file Chapter 13 bankruptcy in Phoenix AZ, there are certain requirements that have to be met.
Your debt has to be within the limit. Secured debt limit is at $1,184,200 while unsecured debt limit is at $$419,275.
Source of Income
It is a requirement to have a regular source of income to be eligible to file a Chapter 13. You could include your spouse’s income regardless if both of you filed for bankruptcy or not. Allowable expenses will be taken into account when deciding how much the mandatory payments will be.
The most important consideration is your repayment proposal. The plan has to cover how long you will be paying your debt and how exactly you’re going to do it. You will be working with your attorney who will work with the trustee and the creditors you’ve listed in your case to come up with an agreement. Whatever remains of your debt after paying for the agreed number of years will be discharged by the court.
Why Aren’t More People Filing for Chapter 13 Bankruptcy?
You might be thinking that this is an excellent way to avoid paying your debt in full. Some attorneys and large firms do not like filing Chapter 13 bankruptcy cases due to the amount of work that is necessary on their part to achieve success. from a business perspective, turn-over of cases can result in more profitability for the attorney or firm. As a result, many times a person is placed in a Chapter 7 bankruptcy that can have adverse effects on their lives when a chapter 13 would result in a better financial situation. It is crucial that you hire an attorney that is willing to file a Chapter 13 to help you determine if Chapter 13 is the best decision for you and what it exactly entails. Bankruptcy attorneys in Phoenix can help you calculate your finances and debt, assess if your situation is eligible for this type of bankruptcy, and secure and submit all the documents required by the court. Contact The Law Office of Larry Karandreas today for a free consultation regarding your Phoenix Chapter 13 bankruptcy case.