By Mark Deleon
Bankruptcy is desperate measure. In tough times, a bankruptcy attorney assists by allowing you to choose what type of bankruptcy to go for, how to file a petition and how to deal with debtors. Chapter 13 bankruptcy can be filed by both, individuals and businesses. A chapter 13 bankruptcy attorney is a professional, who assists individuals and companies handle their bankruptcy declaration and re-organization their finances. What is chapter 13 bankruptcy?
There are actually four different types of bankruptcies. The first is called the Chapter 7 type of bankruptcy, where one has to sell all of his/her unsecured assets. Hence, it is also known as "liquidation". The cash raised through the sale of assets is divided between your creditors.
The second and third types of bankruptcy is called Chapter 11 and Chapter 12 type bankruptcies. Businesses and commercial companies can file these two types of petitions.
The fourth type of bankruptcy is called the Chapter 13 type of bankruptcy and we will look into it in detail here.
Filing for Chapter 13 bankruptcy
Also called Wage Earner Plan, it enables people with a regular income to implement a plan through which they can pay all their debts. The debtor has to promise creditors that he will repay all the loans in 3 to 5 years. If the monthly income of debtor is more than the median income in the state, the court will likely impose a term of three years.
The court may change the plan to a five year one, if there are sufficient reasons. In the case where the income of the debtor is more less the state median, the plan is usually set for five years. In state income levels differ from state to state. So one for Nevada will be different from that of New Mexico or North Dakota.
Creditor Agreement
In no case under chapter 13, will the plan exceeds a term of five years. During this time, creditors can not approach the debtors or threaten you as long as you continue to make payments in accordence with the plan you have both agreed to.
Advantages of Chapter 13 bankruptcy attorney
The primary advantage of chapter 13 bankruptcy is the fact that debtors are allowed to keep assets like their homes and there is no forced liquidation. Homeowners may stop the foreclosure and get time to fulfill their commitment towards mortgage payments, over a period of time.
Although it does not mean that they can stop paying mortgage during tenure of chapter 13 plan. Another advantage is that debtors can reschedule their secured debts, under the chapter 13 bankruptcy plan. They can extend the loan over period of plan.
Eligibility for Filing Bankruptcy
An individual can file for chapter 13 bankruptcy if his unsecured debts are less then USD 307,675 and secured debts are less then USD 922,975. If you are self employed or run an unincorporated company, you can file chapter 13 bankruptcy. Filing a petition under this, automatically stops efforts of collectors. There is another provision for co debtors. The creditor can not approach any co debtor without permission of court first.The provisions of a confirmed plan bind the debtor and each creditor.
As the debtor you must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budget for the tenure of plan. Directories on the Internet, yellow pages and word of mouth acquaintances can be useful in finding a good attorney for filing the bankruptcy.
All of this requires the assistance of a professional attorney. An attorney who is dept at chapter 13 bankruptcy can cut your troubles a lot by taking care of court proceedings, legal aid and negotiations with creditors. This can make the whole process run smoothly and become part of your history as quickly as possible.
There are actually four different types of bankruptcies. The first is called the Chapter 7 type of bankruptcy, where one has to sell all of his/her unsecured assets. Hence, it is also known as "liquidation". The cash raised through the sale of assets is divided between your creditors.
The second and third types of bankruptcy is called Chapter 11 and Chapter 12 type bankruptcies. Businesses and commercial companies can file these two types of petitions.
The fourth type of bankruptcy is called the Chapter 13 type of bankruptcy and we will look into it in detail here.
Filing for Chapter 13 bankruptcy
Also called Wage Earner Plan, it enables people with a regular income to implement a plan through which they can pay all their debts. The debtor has to promise creditors that he will repay all the loans in 3 to 5 years. If the monthly income of debtor is more than the median income in the state, the court will likely impose a term of three years.
The court may change the plan to a five year one, if there are sufficient reasons. In the case where the income of the debtor is more less the state median, the plan is usually set for five years. In state income levels differ from state to state. So one for Nevada will be different from that of New Mexico or North Dakota.
Creditor Agreement
In no case under chapter 13, will the plan exceeds a term of five years. During this time, creditors can not approach the debtors or threaten you as long as you continue to make payments in accordence with the plan you have both agreed to.
Advantages of Chapter 13 bankruptcy attorney
The primary advantage of chapter 13 bankruptcy is the fact that debtors are allowed to keep assets like their homes and there is no forced liquidation. Homeowners may stop the foreclosure and get time to fulfill their commitment towards mortgage payments, over a period of time.
Although it does not mean that they can stop paying mortgage during tenure of chapter 13 plan. Another advantage is that debtors can reschedule their secured debts, under the chapter 13 bankruptcy plan. They can extend the loan over period of plan.
Eligibility for Filing Bankruptcy
An individual can file for chapter 13 bankruptcy if his unsecured debts are less then USD 307,675 and secured debts are less then USD 922,975. If you are self employed or run an unincorporated company, you can file chapter 13 bankruptcy. Filing a petition under this, automatically stops efforts of collectors. There is another provision for co debtors. The creditor can not approach any co debtor without permission of court first.The provisions of a confirmed plan bind the debtor and each creditor.
As the debtor you must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budget for the tenure of plan. Directories on the Internet, yellow pages and word of mouth acquaintances can be useful in finding a good attorney for filing the bankruptcy.
All of this requires the assistance of a professional attorney. An attorney who is dept at chapter 13 bankruptcy can cut your troubles a lot by taking care of court proceedings, legal aid and negotiations with creditors. This can make the whole process run smoothly and become part of your history as quickly as possible.
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