If you’re considering filing for Chapter 13 bankruptcy, you’re probably wondering what will happen to your assets. Will you be able to keep your home? Your car? How about your retirement savings?
The answer to these questions depends on several factors, including the state you live in and the type of bankruptcy you file. In general, however, you will be able to keep most, if not all, of your assets in a Chapter 13 bankruptcy case.
If you’re considering filing for bankruptcy, it’s imperative to consult with an experienced chapter 13 bankruptcy attorney. An attorney can help you understand your rights and options and ensure that your bankruptcy case is handled correctly.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a type of bankruptcy that allows individuals to repay their debts over some time, usually three to five years. Under Chapter 13 bankruptcy, debtors are allowed to keep their property and are given a structured repayment plan to resolve debts.
Chapter 13 bankruptcy is often used by individuals with a regular income but facing severe financial hardship. It can be an effective way to restructure your debt and get back on track financially.
What Happens to My Property?
If you are considering filing for bankruptcy, you will probably want to know what happens to your property and assets during the bankruptcy process. The excellent news is Chapter 13 bankruptcy will not affect your house, car, investment real estate, or rental property.
Remember that during bankruptcy, your property cannot be sold, gifted, or refinanced without the approval of your bankruptcy attorney. Therefore, your house, car, appliances, furniture, and jewelry aren’t available for sale. To get authorization to sell, gift, or refinance, your bankruptcy attorney must file appropriate motions with the bankruptcy court.
Limitations of Chapter 13 Bankruptcy
There are limitations to the type of property and assets you can keep when you file for bankruptcy. For example, if you plan to keep your home, you may not be able to keep it in full. If your bankruptcy case is complicated, you may want to seek the advice of a bankruptcy attorney.
The right attorney can help you make the right decisions for your circumstances and draft your plan. Also, they can help you prepare for any meetings with creditors.
You will likely qualify for a Chapter 13 repayment plan if you have a regular income. You will pay back your creditors for three to five years. You will turn your disposable income to the trustee, who disburses this money to your creditors. Another limitation to a Chapter 13 repayment plan is that the court must approve it before you can use it.
A Chapter 13 repayment plan allows you to keep some property. This means saving home and getting access to additional lines of credit. A Chapter 13 repayment plan may let you keep your car or other property. However, ask your attorney for more information before deciding.
You Need a Stable Income
In addition to these limitations, it’s important to note that this repayment plan can only be used by individuals who have stable incomes and who have stable assets. As a result, it’s essential to know the limits before you file your Chapter 13 bankruptcy.
Chapter 13 repayment plans are an excellent way to protect your property. The plan reorganizes your loans into a three to five-year plan with one low monthly payment. It also helps you rebuild your credit and eliminate burdensome interest rates. This plan is often called a wage earner because it is designed for individuals who earn a living.
You can appeal the confirmation of your chapter 13 repayment plan if you’re not happy with the results. If the bankruptcy court does not approve your project, your trustee may request that your case be dismissed or converted to a liquidation under chapter seven. If that happens, you can ask the court to grant you more time to cure the default.
As far as unsecured debt is concerned, your Chapter 13 repayment plan will have a limit of $465,275. If your total debt is higher than this, you’ll have to consider filing for an individual Chapter 11 bankruptcy.
Limitations of a Wage Earner’s Plan
A wage earner’s plan has various limitations within a Chapter 13 bankruptcy case. Understanding them and how they apply to your lawsuit is essential. Essentially, these are limitations on what you can do with your debts. The constraints of a wage earner’s plan are based on a court’s interpretation of Section 74.
Wage earner’s plans in Chapter 13 bankruptcy cases are designed to give a person with a regular income the chance to repay their debts over three to five years. During this time, your creditors are not allowed to harass or pressure you to make payments to them. They must apply for relief through bankruptcy court before they can continue harassing you.
Is Chapter 13 Bankruptcy Right for My Situation?
Depending on your state, Chapter 13 bankruptcy may be the best option for you. If you have a large amount of debt, Chapter 13 may not be for you. However, if you are a wage earner and expect debt-free, Chapter 13 may be the better option.
A wage earner’s plan in a Chapter 13 bankruptcy case can be a good option for people who have steady incomes and want to keep their homes. This repayment plan will generally last for three to five years, and it will allow you to keep your property.
Filing Chapter 13 Bankruptcy
When filing a Chapter 13 bankruptcy case, your creditor will not be able to contact you without a court order. This is due to the bankruptcy law’s special automatic stay provision. Your creditor will have to obtain authorization to collect consumer debt from you to collect your debts. Consumer debt is defined as debt that’s owed to a family member or household.
Once you have a plan approved, your trustee will distribute the funds to creditors. The court must confirm if the project meets the Bankruptcy Code requirements. This process will take approximately 45 days, and you will be required to give the trustee 28 days’ notice to creditors before the hearing.
Regular Payment Plan
Once a debtor has filed for chapter 13 bankruptcy, they will begin making monthly payments to the trustee. The debtor may be required to pay the monthly payments through wage withholding, which is only allowed in particular circumstances. Once a debtor has begun making monthly payments, they must make them on time in order to keep their plan in place.
The repayment plan is the most critical part of a Chapter 13 bankruptcy case. It must consider all debts and be drafted in compliance with local bankruptcy court rules. If the trustee or creditors object, the plan may need to be amended to gain approval.
The bankruptcy court will likely approve the plan at a confirmation hearing.
Generally, the repayment plan for a Chapter 13 bankruptcy case is based on the debtor’s disposable income. This means that the debtor’s monthly income will have to be reduced by the living expenses they have to pay to meet the plan’s criteria. A Chapter 13 bankruptcy lawyer can help you reorganize payments to meet your needs. Alternatively, they can defer payments until your income becomes sufficient to cover these payments.
Voluntary Wage Deduction
Another option in a Chapter 13 bankruptcy case is a voluntary wage deduction. In this type of bankruptcy case, the debtor’s employer will deduct the amount of each monthly payment on their behalf and send it directly to the trustee. Many debtors favor this option because it is easier to remain current with the plan.
Voluntary wage deduction also saves the debtor money by removing the need for purchasing checks. Additionally, empirical data shows that voluntary wage deduction increases the likelihood of successfully finishing a Chapter 13 bankruptcy case.
How Long Will I Make Payments?
The length of a chapter 13 payment plan varies, but generally, the program will last 36 or 60 months. A higher income level will require a more extended plan. In addition to the length of the payment plan, a person filing for a chapter 13 bankruptcy case must also be current on all of their other ongoing obligations to creditors, including home mortgages and other secured debt.
You’ll Need a Chapter 13 Bankruptcy Attorney
Chapter 13 bankruptcy can be beneficial in certain circumstances, but it must be carefully considered. For example, you may have secured debts such as mortgages and automobile loans. If you fail to make the payments on your secured debts, your lender can take the collateral and repossess your home or vehicle.
Bankruptcy can be complex, but a chapter 13 bankruptcy attorney can make the process as smooth as possible for you. They work with you every step to ensure you understand what’s happening and that your rights are protected. If you live in the Philadelphia area and would like a free consultation, call us at (215) 545-0008 or fill out our online form.