Chapter 13 Bankruptcy Might Be the Right Debt Relief Option for You
Are you struggling with your finances? Chapter 13 bankruptcy might be the right option for you to pursue. However, managing it alone can be very difficult. This is where the help of a Chapter 13 bankruptcy lawyer in Cartersville, GA becomes beneficial.
If you’re considering bankruptcy, you may be wondering about your eligibility for filing. A knowledgeable lawyer can help you know more about your eligibility in bankruptcy. In this article, we will explain more about how beneficial bankruptcy is for you and how a lawyer can help every step of the way.
Quick Summary:
- Chapter 13 bankruptcy is a debt relief option for regular-income individuals who can manage their debts over time. It offers benefits like debt restructuring, property retention, and protection from creditors.
- Individuals must mainly have regular income to be eligible for Chapter 13 bankruptcy. They must meet income limits and debt thresholds and act in good faith. Before filing, individuals must also undergo financial counseling and gather necessary documentation.
- A bankruptcy lawyer can provide legal guidance to help individuals handle the Chapter 13 bankruptcy process. They can help represent clients in court and offer personalized financial assessments.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a legal option for regular-income individuals who can manage their debts over time. Unlike Chapter 7 bankruptcy, which liquidates assets, Chapter 13 enables debtors to create a repayment plan.
The repayment will last around three to five years. It also involves monthly payments to a bankruptcy trustee. This trustee distributes the funds to creditors based on the agreed terms.
What are the Benefits of Filing for Chapter 13?
In bankruptcy, debts are also classified as secured and unsecured. Secured debts must usually be paid in full, but the terms can be adjusted. These can include mortgages, car loans, and more.
Meanwhile, unsecured debts may be paid at a reduced rate or discharged entirely. Credit card debt is considered an unsecured debt. Unsecured debts help debtors regain control without immediate creditor pressure.
The way Chapter 13 manages these debts is just one benefit it covers. Chapter 13 bankruptcy can offer many different benefits, including:
Debt Restructuring
The main benefit of Chapter 13 bankruptcy is debt restructuring. It allows individuals to reorganize debts into manageable payments over three to five years.
Debtors can propose a repayment plan to the bankruptcy court based on income and expenses. This ensures payments are affordable while addressing outstanding obligations.
Retention of Property
Another advantage of Chapter 13 is the ability to retain property. This includes properties like homes and vehicles. Unlike Chapter 7, which liquidates non-exempt assets, Chapter 13 allows individuals to keep their assets while repaying debts.
Debtors can catch up on missed mortgage or car payments through their repayment plan. This helps prevent foreclosure of properties.
Protection from Creditors
Filing for Chapter 13 provides essential protection from creditors through an automatic stay. This automatic stay stops all collection activities immediately upon filing. It helps protect debtors from repossession or foreclosure during the bankruptcy process.
This provision prevents creditors from initiating lawsuits, garnishing wages, or contacting debtors about unpaid bills. It allows individuals to focus on their repayment plan without the stress of creditor harassment. Finally, it provides space to reorganize finances under court supervision.
Am I Eligible for Chapter 13 Bankruptcy?
Processing your eligibility for bankruptcy in Cartersville can be difficult. You must meet specific eligibility criteria established by the U.S. Bankruptcy Code. This process is designed to assist individuals with a regular income who seek to reorganize their debts. Thus, you are required to have the following:
Regular Income
The main requirement for filing Chapter 13 bankruptcy is that the debtor demonstrate a regular income. This income forms the basis of the repayment plan submitted to the court. Without a consistent income stream, debtors could not make the required monthly payments in their plan.
Regular income can come from various sources. It can be wages from employment, self-employment earnings, rental income, or government benefits. The income must be reliable and sufficient to cover living expenses while allowing for debt repayment.
Income Limits and Debt Thresholds
Another one of the bankruptcy qualifications in Georgia is the income limit. Chapter 13 bankruptcy has defined limits regarding how much debt an individual can have. As of 2024, individuals can file for Chapter 13 if their combined secured and unsecured debts do not exceed $2,750,000.
If a debtor’s income is below the median income for their state, they may propose a three-year repayment plan. If their income exceeds the state median, the repayment plan usually extends to five years. For Georgia, the median income for one earner is $62,468.
Good Faith
The good faith requirement is another vital aspect of eligibility for Chapter 13 bankruptcy. Debtors must show that they are acting honestly in their situation. They must have sincere intentions to repay their debts under the proposed plan.
This involves creating a realistic repayment plan reflecting the debtor’s financial situation. Courts will assess whether the proposed plan is feasible. They will also check whether it meets legal standards for repayment.
A debtor cannot receive a discharge under Chapter 13 if they obtained a prior discharge in a Chapter 7, 11, or 12 case within the past four years. Furthermore, they are also ineligible if they received a discharge in a Chapter 13 case within the last two years.
What Steps Should I Take Before Filing a Chapter 13 Bankruptcy?
Before filing for Chapter 13 bankruptcy, you must undergo financial counseling. This is a legal requirement that can help in the bankruptcy process. The U.S. Bankruptcy Code requires a credit counseling course from an approved agency within 180 days before filing.
Credit counseling can last 60 to 90 minutes. It helps individuals assess their financial situation. It also helps them explore alternatives to bankruptcy and develop a budget plan.
During counseling, participants evaluate their income, expenses, and debts to determine if they qualify for Chapter 13. Other options may be better suited otherwise. A positive assessment improves the case for filing under Chapter 13.
Gathering Documentation
After deciding to file for Chapter 13 bankruptcy, gathering all necessary documentation is essential. It helps you get a head start on filing for bankruptcy. The vital documents can include:
- Income Statements: Recent pay stubs or proof of income from all sources.
- Debt Records: A list of all creditors with amounts owed and account numbers.
- Property Information: Document any owned properties, including real estate and vehicles.
- Monthly Living Expenses: A detailed account of monthly expenses like housing, utilities, and food.
- Tax Information: Federal tax returns for the past two years and statements regarding unpaid taxes.
Can a Bankruptcy Lawyer Help Me With Filing Chapter 13?
By completing financial counseling and gathering the necessary documentation, you can finally prepare for filing bankruptcy. However, it may still be difficult to do it yourself. You may still need the help of a bankruptcy eligibility attorney in Cartersville.
A qualified bankruptcy attorney is your lifeline in the bankruptcy process. They can facilitate a smoother filing process. In addition, they increase the chances of successfully discharging your debts. A good attorney can offer:
Legal Guidance and Protection
A bankruptcy lawyer provides important legal guidance throughout the bankruptcy process. Their experience can help you process complex legal requirements. They can help you comply with all regulations. Finally, they can protect your rights during the proceedings.
Filing Assistance and Court Representation
Lawyers offer step-by-step assistance with the filing process. They help prepare necessary documents, submit filings on time, and represent clients in court. This support simplifies the often overwhelming process and increases the likelihood of a successful outcome.
Personalized Financial Assessment
A bankruptcy lawyer can create a personalized financial assessment to evaluate your unique circumstances. They can recommend the most suitable bankruptcy option by analyzing income, debts, and expenses. They can develop a tailored repayment plan that aligns with your financial situation.
Find if You’re Eligible for Chapter 13 Bankruptcy With Help From Our Lawyer!
Are you facing financial challenges and considering Chapter 13 bankruptcy as a solution? Then, you might need the help of an experienced Chapter 13 bankruptcy lawyer in Cartersville, GA. At the Law Office of Jeffrey B. Kelly, our lawyers are guaranteed to guide your debt relief to success.
Understanding the eligibility requirements and benefits of Chapter 13 is only the first step in the process. With help from our attorneys, we can provide valuable insights and support in your journey to financial stability.
With our help, you can take proactive steps toward achieving financial stability. All the while, you can still retain control over your assets. Don’t hesitate to reach out for assistance. Call our team today and get a free consultation!