• Chapter 13 Bankruptcy

    Reorganize your debts on your terms and not your creditors. Keep your assets and set up your own repayment plan under the Federal Court’s protection.

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Chapter 13 is a Debt Consolidation Repayment Plan Under the Protection of the Federal Courts

If you are facing foreclosure, tax levy, repossession, or child support collection then Chapter 13 may be the best chapter of bankruptcy for you!

should you file chapter 7 or 13 bankruptcy
  • Recover repossessed cars immediately.
  • Case lasts anywhere from 36-60 months.
  • Stops interest from accruing on unsecured debt.
  • $0.00 down attorney fees to file for most clients.
  • Reported on your credit 7 years from date of filing.
  • Allows “cram down” of interest and value on vehicles.
  • Allows less than 100% repayment of unsecured debts.
  • Stops child support license suspensions and warrants.
  • Allows you to remove junior mortgage liens in some cases.
  • Married couples can either file together or just one person can file.

Who Can File Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy Allows Consumers to Restructure Their Debt in a Repayment Plan That Can Last Up to 60 Month

A Chapter 13 bankruptcy, also known as a wage earner’s plan or individual debt adjustment, allows people with steady income to propose a plan to pay all or a portion of their debts. These payments can last three to five years.

In order to file for Chapter 13, you must meet some requirements. Unlike a Chapter 7 bankruptcy, which allows you to discharge some debts in exchange for the sale of nonexempt property to pay creditors, Chapter 13 allows you to keep your property and repay your creditors in a three or five year court-approved repayment plan.

Here are the requirements:

  1. You Are Not a Business Entity: Only individuals and those filing jointly as husband and wife can file for Chapter 13 bankruptcy. While a business owner may not file in their business name, if ownership is as a sole proprietor or with a partner, then you can file in your name for the debts that you are personally liable for.
  2. You Have Fulfilled the Credit Counseling Requirement:A Chapter 13 debtor must file with the bankruptcy court a pre-filing certificate at least 180 days prior to filing for Chapter 13.
  3. Your Debts Are Not Too High: Chapter 13 requirements impose a limit on the amount of a filer’s debt. Chapter 13 is available to debtors with less than $394,725 in unsecured (debts that are not secured by property, such as credit card debt and medical bills) and less than $1,184,200 in secured debt (debts in which a creditor can take the property securing the debt if it is not paid). These bankruptcy debt limits are adjusted every three years.
  4. You Have Filed Your Income Tax Returns:To meet Chapter 13 requirements, you must provide proof of filing state and federal income tax returns for the previous four years. At least seven days before the first meeting of creditors, you must provide the trustee with a copy or a transcript of the most recent federal tax return filed with the IRS. You don’t have to all taxes filed to FILE the case but you will need them shortly afterwards.
  5. Your Proposed Plan Repays All Required Debts: Under Chapter 13, you will need to propose a plan of how your debts will repaid.  Many times you will NOT have to repay all of your unsecured debts but this is on a case by case basis and take into account many factors that a skilled bankruptcy attorney can review with you at the time of your consultation.
  6. You Have Sufficient Income to Pay Debt: You have to have enough income, after deducting allowable expenses, for all debt obligations. You can include income from a working spouse even if the spouse has not filed jointly for bankruptcy, wages and salary, self-employment income, Social Security benefits, Disability, and unemployment benefits.

How Chapter 13 Works

A Chapter 13 bankruptcy typically lasts 36-60 months. Chapter 13 allows you to restructure you debts in order to retain your assets on your own terms.

If you decide to file for Chapter 13 bankruptcy then here is the process once your case has been filed:

  1. You will start making your Chapter 13 Trustee payment 30 days from the date that you case is filed.  If you have a job then this will be payroll deducted by the court.  If you are self-employed or receive income from another source then you will make the payment online to the Chapter 13 Trustee website.
  2. In about 30-45 days you will attend a court hearing. This hearing is called the 341 Meeting of Creditors.  It may sound scary but it really isn’t.  You are not in a court room. You are not in front of a judge,  You are in a conference room and your attorney is with you 100% of the way. Most of the time the hearing lasts about 10-15 minutes.  At this hearing the trustee will ask you some questions and then announce their objections (they always have objections).
  3. The trustee’s objections will be send to both you and your attorney in the mail.  You need to review these with your attorney and make sure that they are all resolved before your second hearing which is the confirmation hearing. Most of the time you to NOT have to attend this second hearing if you have provided your attorney all requested documents.
  4. Once the trustee reviews your case and sees that you have resolved all of their objections and paid all your trustee payments, they will confirm (aka approve) your case. From this point on you are just making your payments every month and once a year providing your trustee a copy of your tax return.
  5. After you have made all required payments in your case your trustee will send you a notice of plan completion.  You will then complete a second credit counseling course and 1328 certificate (which the trustee will send you).  Your case will be discharged and you have completed your case.

Chapter 7 vs. Chapter 13

Each chapter of bankruptcy has pros and cons. Which chapter you decide to file depends on your specific situation. What works for one person may not work for someone else.

Decide which chapter to file can be confusing. Chapter 7 bankruptcy forces you to liquidate your assets that are not protected by exemptions and repay creditors. This means that if you have too much equity in your home that the Chapter 7 Trustee will sell the home and use the proceeds to pay your creditors.  You may be OK with that but most people want to keep their homes.  Typically, the entire Chapter 7 process is completed within four to six months.

Keep in mind though that Chapter 7 has disadvantages, too. Lenders who have already filed to foreclose on your home are only temporarily stalled, and other debts such as mortgage liens can be collected after the case is concluded. Cosigners on your debt are still obligated to pay. If you are facing a foreclosure and want to keep your house then you need to file a Chapter 13 and not a Chapter 7 bankruptcy.

Filing for Chapter 13 protection allows you to keep all your property. It simply extends the amount of time you have to repay what you owe after the bankruptcy court issues its ruling. It is possible to file a Chapter 13 bankruptcy after a Chapter 7 is completed, allowing you to seek a reduction in whatever debts remain from a Chapter 7 discharge. Chapter 13 will also protect your cosigners against collection efforts.  There are many situations that come up where filing a Chapter 13 is a better choice than Chapter 7.

Chapter 7 cases do not allow you to remove junior liens or to “cram down” secured loans on cars and furniture.

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What Documents Will I Need If I Decide to File Bankruptcy Case?

The good news is that our firm will pull your credit reports and perform a nationwide lien search. Just review the list of documents that the court will require below.

If you are filing a Chapter 13 case you will be required to provide the last 60 days of income statements.  If you are unemployed, self-employed, or receive SSI you can sign an affidavit as to this in our office or online.

The court will require a copy of your last filed tax return. If you are not required to file taxes you can sign an affidavit as to this. If you have misplaced your copy we can request a transcript when you come into our office.

In order for your case to be valid upon filing you must complete a pre-filing credit counseling course.  There are several different companies that provide this service.  The three companies that most of our clients use are:

  1. www.debtoredu.com 
  2. www.abacuscc.org
  3. https://ccadvising.com

File Your Case the Right Way With the Right Law Firm! Don’t Become Just a Case Number at a Bankruptcy Mill mega firm!

Saedi Law Group has achieved its success by providing honest and experienced legal advice to Georgia consumers. We provide real-life options for clients and walk them through the entire process.

Schedule a FREE Bankruptcy Consultation

Our firm offers video consultation from the convenience of your home or in-person appointments in one of our 10 office locations.

We invite you to contact us either online or by phone at 404-919-7296 to schedule a free confidential consultation to review your personal financial situation and what options we can provide to protect you from creditors. For additional information about bankruptcy please also check out our YouTube Channel which has up to date vlogs on issues related to personal bankruptcy.

© 2020 Saedi Law Group LLC. All Rights Reserved. LEGAL DISCLAIMER: We are a debt relief agency. We help people obtain relief from their creditors by filing for bankruptcy. Nothing posted on this website shall constitute legal advice. If you need legal advice please contact our office to schedule an appointment. No attorney client relationship exists until we have a written contract.
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