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Archive of "What is Chapter 13 Bankruptcy?" Category
Arizona Bankruptcy Attorneys and How To Cope With Chapter 13 Bankruptcy
Arizona bankruptcy attorneys will assist you in the process of determining whether you will file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. While many consumers struggling with debt may expect to be able to discharge their debt, they may not be eligible for Chapter 7 and instead go through the Chapter 13 bankruptcy and have a repayment plan set up. You may even want to work with Arizona bankruptcy lawyers to obtain a Chapter 13 bankruptcy if you have certain kinds of property or valuable assets that you wish and need to keep. Need a Bankruptcy Lawyer?
Most consumers have heard of Chapter 7 bankruptcy but there is another type known as Chapter 13. This article details some of the differences between the two and how they may affect someone who has to file.
There are many differences between Chapter 7 and Chapter 13, but the main difference between Chapter 13 and Chapter 7 is Chapter 13 often allows a debtor (the person filing for bankruptcy) to keep certain assets that would otherwise be lost under the Chapter 7 rules. In many cases, you are allowed to keep your home and your car under either plan as long as your equity does not exceed certain limits. Under Chapter 7, however, you would not be able to keep rental properties, antique collections, and things of that nature, which you can retain under Chapter 13.
In general, a Chapter 13 bankruptcy is usually filed for people who have too much income to file under Chapter 7. This also includes persons who have a large amount of non-dischargeable property.
Chapter 13 bankruptcy is for individuals, or small business owners, who want to repay their creditors but are in financial hardship. Chapter 13 normally protects individuals from the collection efforts of creditors and permits those who are filing to retain their real estate and personal property. It also provides means so that the person can pay his or her debts through reduced payments.
A trustee works for both parties and will usually come up with a three to five year payment plan which offers to pay off all or part of the debts owed. The trustee will also calculate how much the debtor can afford to pay each month which is that amount above necessary living expenses. Debtors must have a regular income and have at least some disposable income in order to make this work. It is the disposable income that is used to pay back the debts.
Two major problems with Chapter 13 is that the person filing must have a steady income and some disposable cash. For many people, they simply do not have that. If they had it, they might not be in bankruptcy in the first place. The second issue is that the person filing Chapter 13 will have to pay back more of the debt owed than those seeking protection under Chapter 7.
Chapter 13 will go on your credit report but it usually stays on for less time than a Chapter 7.
Filing for bankruptcy is a serious move and should not be done without first exploring every other option. In the old days people often believed that filing for bankruptcy was not that big a deal. Much of that has changed now, and it can be a very big deal in terms of you getting future credit or loans.
The bankruptcy laws have changed recently and anyone considering filing should first seek out the advice of a competent and qualified bankruptcy attorney. These specialized attorneys will be able to best guide you toward the correct option that will best suit your needs.
One note of caution when using a qualified bankruptcy attorney, remember to ask for previous cases that the attorney has worked on and ensure you have a clear indication on their fees before proceeding. Ask A Lawyer Online Now. Get an Answer ASAP. 12 Lawyers Are Online! Law.JustAnswer.com
Author: Peter Kenny
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Arizona Bankruptcy Attorneys and When Chapter 13 is Not the Best Option
Arizona bankruptcy attorneys face a variety of potential clients every day, all with very different concerns, different financial challenges and no one solution fits every single consumer. Ask you Arizona bankruptcy lawyer if chapter 13 bankruptcy is right for you and your debt issues, there may be other bankruptcy options.
When you first read about the provisions of Chapter 13 bankruptcies, it seems like an attractive debt management option. However, one of the top reasons to avoid Chapter 13 is that it sets unrealistic goals for the debtor. First, you need to understand what Chapter 13 is.
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