Navigating Chapter 13 Bankruptcy: Why You Need an Attorney

Navigating the complexities of filing for Chapter 13 bankruptcy can be overwhelming and stressful. 

From understanding the eligibility requirements to creating a repayment plan that works for you, having an experienced attorney by your side is crucial. 

In this blog post, we will discuss the importance of hiring a bankruptcy attorney when filing for Chapter 13 bankruptcy and how they can help guide you through the process.

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals with a regular income to create a repayment plan to pay off their debts over a period of three to five years. 

This type of bankruptcy is ideal for those who have a steady income and want to keep their assets while still working toward financial stability. 

However, navigating the legal requirements and paperwork involved in filing for Chapter 13 can be overwhelming without the guidance of an attorney.

Creating a Feasible Repayment Plan

One of the key components of filing for Chapter 13 bankruptcy is creating a feasible repayment plan that satisfies both your creditors and the court. 

An experienced bankruptcy attorney will work with you to analyze your financial situation, determine your disposable income, and create a repayment plan that fits within your budget. 

They will ensure that your plan meets all legal requirements and increases your chances of approval by the court.

Protecting Your Assets

Another important reason to hire a bankruptcy attorney when filing for Chapter 13 is to protect your assets from being seized by creditors. 

An attorney will help you understand which assets are exempt from liquidation under bankruptcy laws and assist you in retaining ownership of valuable property such as your home or car. 

They will also provide guidance on how to navigate any challenges or disputes that may arise during the bankruptcy process.

Legal Expertise and Representation

Navigating the legal system can be daunting, especially when dealing with complex matters such as bankruptcy law. 

Hiring a Chapter 13 bankruptcy attorney will provide you with valuable expertise and representation throughout the process. 

They will handle communication with creditors, attend court hearings on your behalf, and ensure that all necessary paperwork is filed correctly and on time.

Peace of Mind

Above all, hiring a bankruptcy attorney when filing for Chapter 13 can provide you with peace of mind during what is likely a stressful time in your life. 

Knowing that you have a knowledgeable advocate on your side who is working tirelessly to help you achieve financial stability can alleviate some of the burden associated with navigating bankruptcy proceedings.

Final Thoughts

Navigating Chapter 13 bankruptcy can be challenging, but having an experienced attorney by your side can make all the difference in achieving a successful outcome. 

From understanding the legal requirements to creating a feasible repayment plan and protecting your assets, an attorney will provide invaluable support throughout the process. 

If you are considering filing for Chapter 13 bankruptcy, don't hesitate to reach out to a qualified attorney who can guide you through every step of the way.

Bouncing Checks: 4 Ways to Make Bankruptcy Easier to Manage

Bankruptcy can have a profound effect on your finances both now and over the next several years. While it may help you get out of debt, it can also make it harder to get credit for the two to three years that follow. 

The bankruptcy will also stay on your credit report for up to 10 years. What steps can you take to best manage bankruptcy?

Know Your Rights

It is important that you learn as much as possible about your rights as it relates to filing for bankruptcy. During a bankruptcy case, creditors are generally unable to contact you or move forward with a repossession or a foreclosure. 

If you get any demand for payment from a creditor, contact your attorney, the case trustee or the bankruptcy court immediately. Doing so may prevent you from making payments or otherwise enduring harassment that you don't need to go through.

Know What Type of Bankruptcy to File For

Chapter 7 bankruptcy is ideal for those who have unsecured debts and few assets. Chapter 13 bankruptcy is best for those with secured debts or debts that can't be discharged. 

Professionals, like those at Demers Gagnier Inc., may be able to help you understand your options and which type of protection from creditors is right for you.

Know the Requirements before You File

When you file for bankruptcy, you will be required to provide information about your income, assets and liabilities. 

You will also be required to go through credit counseling within 180 days of filing. Taking the process seriously and providing any information asked of you in a timely manner may prevent your case from being dismissed or rejected.

Stick to the Repayment Plan

If you file for reorganization bankruptcy, you will be required to make payments on some or all debts for three to five years. Payments will be made according to a plan that is approved by the bankruptcy court. 

Making your plan payments as required may avoid challenges from creditors or other problems that could result in your case being dismissed. If you have trouble making payments, get in touch with the case trustee as soon as possible.

`Bankruptcy is ideally a last resort for dealing with debt after all other options have been exhausted. However, when done correctly, bankruptcy may help you get a handle on your finances both today and in the long run. 

If you are thinking about filing, make sure to do so with the help of an attorney or financial adviser to make it easier to manage the process.

Is there a difference between Chapter 7 and Chapter 13 Bankruptcy?

Declaring bankruptcy is an upsetting time for anyone. You never want to be placed in this position. In the US, there are two major types of bankruptcy you might file for if your personal debts have grown out of control: chapter 7 and chapter 13 bankruptcy. A lot of people confuse these two types, and when you are facing serious financial debt, it can be very difficult to know which route to take.

Here are the major differences between chapter 7 and chapter 13 bankruptcies, so you’re aware of your options if you face insurmountable debt.

Chapter 7 Bankruptcy Explained

Chapter 7 bankruptcy is where you admit to the court you have no chance of paying off your debts, and the court discharges your debts. You’ll be completely free from debt, but the catch is your belongings and property can be distributed to creditors to pay off your debts. There are items exempt from this, but in extreme situations where you owe large amounts of money, you could lose everything.

This is the end of the line for most people. The bankruptcy mark will remain on your record for a number of years, making it almost nearly impossible to take out credit.

Chapter 13 Bankruptcy Explained

Chapter 13 bankruptcy isn’t bankruptcy in the conventional sense. While you agree you can’t pay off your debts, you don’t necessarily discharge the debts. Instead, you broker a deal in the courts between you and your creditors where you’ll create a repayment plan. Usually, you’ll have your wages garnished every month until the debt is repaid. The difference is you aren’t putting your belongings at risk unless you specify that in the terms of repayment. In some cases, you might have some of your debt discharged.

Like chapter 7 bankruptcy, the mark of a chapter 13 bankruptcy remains on your credit score for several years, making it difficult to take out new lines of credit.

What Can They Take?

In chapter 13 bankruptcy they can’t take a thing. This isn’t where you admit you have to make a fresh start. It’s simply admitting you need legal intervention to help you pay off your debts. You can agree to sell something, like a car or furniture, to make the deal better for yourself, but it isn’t always necessary.

In the case of a chapter 7 bankruptcy, they can take anything of sufficient value. A bank could seize property, but in many states your primary residence is protected. Despite the equity, it’s likely the bankruptcy could still force a sale of your home so the creditors can recover their money.

You can lose your vehicle unless the court deems it essential to your livelihood. You can also keep trade tools for your work, but this only applies to a certain value. Anything above this value can be sold.

Your furniture and personal belongings are normally exempt from being sold off to collect a debt. Expensive jewelry and large items like plasma televisions and high-tech computers can be sold if they’re worth enough.

If you’re filing for either type of bankruptcy, it’s strongly recommended you employ a bankruptcy lawyer to help with the process. Through professional legal guidance, you can get you a more favorable deal and potentially help you retain many of your possessions.

About the Author:Ashley Parker has worked with many bankruptcy lawyers and financial advisors over the years. She regularly educates people on the differences between chapter 7 and 13 bankruptcies. As one of many chapter 7 attorneys, she recommends her clients try to opt for chapter 13, if at all possible.