Indianapolis Chapter 13 Bankruptcy Attorney
In this day and age of mounting debt at the national, local and individual level, many people are seeking advice on bankruptcy and if it would be the appropriate course of action for them and their family. Filing for bankruptcy is a major decision to make that can result in long-term consequences so it is of the utmost importance to have all possible information available to you to make the appropriate choice. There are also many positives that come from filing bankruptcy allowing individuals a second chance at life with a clean slate or helping to consolidate debt while preventing creditor harassment. The filing of bankruptcy, whether Chapter 7 or 13, provides a stay to all creditors you may owe debts to and makes it illegal for them to contact you further.
What to Do If You Are Considering Filing for Bankruptcy
For individuals, the first decision to make when considering bankruptcy is whether to file for Chapter 7 or Chapter 13. For a detailed look into Chapter 7 or a roadmap into the decision-making process of Chapter 7 versus Chapter 13, check out one of our other articles more on topic. Generally, Chapter 7 is a liquidation of almost all your assets in an attempt to repay your debt. Dischargeable debts include medical bills, credit cards, auto accident claims (if not associated with an OVWI case), lease obligations or old rent, and past-due utility bills. Chapter 7 is not able to charge most student loans, collateralized or secured debts, child support, and alimony or spousal maintenance payments.
Chapter 13 vs Chapter 17
Although Chapter 7 bankruptcy would seem to be the better deal as it allows you to completely discharge most debt without having to repay creditors, only certain individuals qualify as you must pass the federally mandated income requirements via the means test as well as be under your state median for income. There are various ways for people to conclude Chapter 13 is the best route for them. One route is because your household income designates that you make too much money to qualify for Chapter 7 via the means test and your only option is to file for Chapter 13. The other route is because you are seeking to avoid foreclosure of your house or you have other possessions that you wish to keep and avoid repossession. Even if you do not qualify for Chapter 7 relief, Chapter 13 can be a great way at reorganizing an individual’s debt and get them out of the hole in three to five years.
Chapter 13 bankruptcy allows you to keep all of your property. The requirement is that your debt is restructured and you will make payments more manageable to your income. You then follow the terms of the approved Chapter 13 plan and at the conclusion of the case, you receive a discharge of the unsecured debt on the unpaid balance. The amount allowed to be unpaid at the end of the plan is often negotiated by your attorney, the US Trustee, and your creditors. The amount paid is will be going to the US Trustee who will then disperse the funds to the creditors.
For filings between April 1, 2019 and effective for three years following, the applicable debt limits for Chapter 13 is $419,275 for unsecured debt and $1,257,850 for secured debt. This means that on the date you file you Chapter 13 petition, your debts cannot exceed these amounts. These limits apply if you are petitioning as an individual or jointly as a married couple. Secured debt is defined as debt backed or secured by a collateral to reduce the risk associated with lending. The item most individuals have that is secured is their mortgage to their house. Unsecured debt is basically all other loans that are not backed by collateral. Examples of unsecured debt include personal loans, credit card bills, or medical bills. If your bills are more than the stated debt limits, your option would be to file Chapter 11 Bankruptcy.
How Long Does Chapter 13 Bankruptcy Take?
Since Chapter 13 requires you to restructure your debts rather than simply discharge them, the process is a lot more complicated. Statistics show about 95% of pro se Chapter 13 filers get their petition for bankruptcy denied. This is not mentioned as a sales pitch to influence individuals to get an attorney but to highlight the complexity of a Chapter 13 filing. The timeline from filing to debt discharge depends on your debt to income ratio but ranges from three to five years. You are expected to beginning paying on your restructured payment plan 30 days from the date of filing for Chapter 13 bankruptcy.
What Could Happen if my Chapter 13 Bankruptcy is Dismissed?
There are several reasons why a petitioner could have the case dismissed. These reasons include failure to make the restructured payments in accordance with the Chapter 13 plan, failing to attend the meeting of the creditors with the US Trustee to determine your amount of debt, failing to complete both the beginner Credit Counseling Course or the Debtor Education Course at the end of your plan, failing to submit the required documentation requested by the US Trust or bankruptcy court, or failing to file a tax return while on your plan.
In the event your Chapter 13 case is dismissed, you are no longer protected by the stay and creditors can resume collection action against including lawsuits wage garnishments, and home foreclosure. It is possible to refile the Chapter 13 petition but you would lose whatever progress would made on your three to five year plan further delaying the possibility for discharge.
Contact an Indianapolis Chapter 13 Bankruptcy Attorney
Chapter 13 filings are complicated and not the solution for all individuals who may be considering bankruptcy. Also considering the extremely low success rate pro se filers have, it is highly recommended to consult with an experienced attorney who can guide you through the process and make sure you have the greatest chance of success. We understand it has been a long road to get to the point of considering bankruptcy but with the proper counsel, an experienced Banks & Brower attorney will help you find the light at the end of the tunnel to financial freedom. Contact us 24/7 at 317-870-0019 or firstname.lastname@example.org today.