File Chapter 13 Bankruptcy Today!
If you are suffering from financial difficulties and want to file for Chapter 13 bankruptcy, it is crucial to know Chapter 13 basic steps. Chapter 13 bankruptcy is also known as the wage earner’s plan. It allows debtors with regular income to have a repayment plan in order to repay all or part of their debts. Chapter 13 bankruptcy takes a lot of effort and knowledge about bankruptcy laws to be successful. That’s why consulting with an experienced bankruptcy attorney is highly recommended.
The Law Office of Clark Daniel Dray is the best bankruptcy law firm that you can trust. We offer effective debt solutions using our extensive years of relevant experience in handling bankruptcy cases. With our strong dedication to helping clients, we guarantee excellent legal assistance. If you are in need of help, get a free consultation today!
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also known as a “wage earner’s plan,” is a form of bankruptcy available to individuals residing in Denver, Colorado, and the rest of the United States. It allows individuals with regular income to create a repayment plan to reorganize their debts and make scheduled payments to creditors over a period of three to five years.
The repayment plan in Chapter 13 bankruptcy is submitted to the bankruptcy court for approval. It typically includes payments to priority debts (such as taxes and child support), secured debts (such as mortgages and car loans), and unsecured debts (such as credit card debt and medical bills). The debtor makes regular payments to a bankruptcy trustee, who distributes the funds to creditors according to the approved plan.
What are the Advantages of Chapter 13 Bankruptcy?
One advantage of Chapter 13 bankruptcy is that it allows individuals to stop foreclosure proceedings and catch up on missed mortgage payments, thereby potentially saving their homes. It also provides a structured path to repay debts and can offer relief from creditor harassment and collection efforts.
It’s important to note that Chapter 13 bankruptcy requires individuals to have a regular income and meet specific eligibility criteria. Consulting with a bankruptcy attorney in Denver, Colorado, is advisable to determine if Chapter 13 bankruptcy is the right option for your specific financial situation.
What Determines Whether I Can Be In A Three or Five-Year Repayment Plan?
The determination of whether you will be in a three-year or five-year Chapter 13 repayment plan depends on several factors, including your income, expenses, and the “means test.”
- Income: If your current monthly income is below the median income for a household of your size in your state, you may qualify for a three-year repayment plan. If your income is above the median, you will typically be required to complete a five-year plan.
- Means Test: The means test is a calculation used to determine your disposable income. It compares your income and allowable expenses to determine how much money you have available to repay your debts. If your disposable income meets certain thresholds, you may be required to complete a five-year repayment plan.
- Plan Feasibility: The court will also consider whether your proposed repayment plan is feasible and can successfully repay your creditors within the designated timeframe. If your disposable income is insufficient to complete the repayment within three years, the court may require a five-year plan.
Additionally, the type of debt you have can also affect the duration of your Chapter 13 repayment plan. Some debts, such as priority debts like taxes and domestic support obligations, must be paid in full during the plan period. If you have significant amounts of priority debt, a five-year plan may be necessary to accommodate those payments.
Chapter 13 Basic Steps: Filing Bankruptcy
The basic steps involved in filing for Chapter 13 bankruptcy typically include the following:
- Consultation with a Bankruptcy Attorney: Seek the guidance of a bankruptcy attorney specializing in Chapter 13 bankruptcy. They will assess your financial situation, determine if Chapter 13 is appropriate for you, and guide you through the process.
- Credit Counseling: Before filing for bankruptcy, you are required to complete a credit counseling course from an approved agency. This course helps you evaluate your financial situation and explore alternatives to bankruptcy.
- Preparation of Bankruptcy Petition: Your attorney will assist you in preparing the necessary documentation, including a detailed list of your assets, debts, income, expenses, and a proposed repayment plan. They will also help you complete the official bankruptcy forms required by the court.
- Filing the Petition: Once your bankruptcy petition is prepared, it must be filed with the bankruptcy court in your jurisdiction. Filing the petition initiates an automatic stay, which halts creditor collection activities.
- Meeting of Creditors: After filing your petition, you will attend a meeting of creditors, also known as a 341 meeting. This meeting allows the bankruptcy trustee and your creditors to ask you questions about your finances, assets, and proposed repayment plan.
- Confirmation of Repayment Plan: Following the meeting of creditors, a confirmation hearing will be scheduled. At this hearing, the bankruptcy court will review your proposed repayment plan and determine whether it is feasible and meets the requirements of the bankruptcy laws. Creditors have the opportunity to object to the plan during this stage.
- Repayment Plan Period: If the court confirms your repayment plan, you will begin making regular payments to the bankruptcy trustee as outlined in the plan. The trustee will then distribute the funds to your creditors according to the plan’s provisions.
- Completion of the Plan: You must make all the required payments outlined in your plan over the designated period, which is typically three to five years. Once you complete the plan, any remaining eligible debts may be discharged, providing you with a fresh financial start.
It’s important to note that these steps provide a general overview of the Chapter 13 bankruptcy process, but the specifics may vary depending on your jurisdiction and individual circumstances. Working closely with a knowledgeable bankruptcy attorney will help ensure a smooth and successful filing.
Why Do I Need a Colorado Bankruptcy Attorney?
While it is not stated in any law that a debtor is required to have a bankruptcy attorney when filing, it is, however, still necessary. This step is very crucial. Choosing the right bankruptcy attorney is a must. Therefore, you need to keep in mind the following qualities:
- Knowledgeable – When filing for bankruptcy, it is entirely normal for people to have numerous questions. The reason for hiring a bankruptcy lawyer is for you to get answers, guidance, and a faster process. Needless to say, you need a knowledgeable bankruptcy attorney.
- Competent – Other than being knowledgeable, consider also the qualities of competence and skillfulness. Handling complex bankruptcy cases requires a strategic plan. Choose someone who possesses these qualities.
- Integrity – Always choose a bankruptcy attorney who is reliable and trustworthy. In assisting you in these challenging situations, you need an honest bankruptcy attorney who can provide prudent options and inform you of the possible outcomes of your case.
If you are looking for a bankruptcy attorney with proven competence, integrity, and knowledge, then the Law Office of Clark Daniel Dray is the one you should hire. Our bankruptcy law firm is committed to going above and beyond to provide excellent customer service. If you need help with your debts, schedule a free consultation today!
Call our Colorado Bankruptcy Attorney Now!
Going through financial difficulties is incredibly stressful and frustrating. As a debtor, it’s likely that you have already read several articles online. However, if you still have unanswered questions, this is a clear sign that it’s time to seek the assistance of an experienced bankruptcy attorney.
The Law Office of Clark Daniel Dray is dedicated to providing excellent customer service with honesty and integrity. With offices in Broomfield, Boulder, Denver, Littleton and Louisville, Colorado, our legal team will not only guide you through the Chapter 13 basic steps but also provide guidance to help you decide on the best available options.