Chapter 13 Bankruptcy
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Chapter 13 Bankruptcy
Chapter 13 is a much longer process, where one files their case and then, over a 36 to 60 month process (depending on his or her income), makes payments to the trustee under a plan of re-organization, where some debts are paid (home arrearages, car loans, IRS taxes, etc.) and some debts are wiped out (medical bills, credit card debt, payday loans, etc.) and, upon completion of their plan, gets their discharge.
People tend to have a negative view of filing for bankruptcy. This should not be the case. Filing for bankruptcy can be the answer you need to start over. Chapter 13 bankruptcy is an option for individuals who have substantial debt and want to keep their assets while paying off their debt in affordable payments. One of the most beneficial things about a Chapter 13 bankruptcy is that it allows debtors to protect their property from foreclosure and make payment plans to pay off their non-exempt debts in a way that better suits their income and capabilities.
Qualifying for Chapter 13 Bankruptcy In Nevada
The requirements to file for Chapter 13 bankruptcy include:
- Being able to provide proof that the debtor has gone to an approved debt counselor and completed counseling within the previous 180 days
- The debtor cannot be a business
- The debtor is an individual or filing jointly with their spouse
- A previous bankruptcy was not dismissed within the previous 180 days
- You must repay all alimony or support payments, child support, non-dischargeable taxes, secured debts such as mortgage or vehicle loans that survive the repayment plan, judicial and tax liens
- You can repay a certain amount to unsecured creditors
- Unsecured debt must be under $419,275 and secured debt under $1,257,850
- You must have enough income to pay the debt
Chapter 7 vs Chapter 13 Bankruptcy
With Chapter 7 bankruptcy, the individual must fall below a certain income level. The debtor’s non-exempt belongings will be liquidated and sold to pay off debt and most of the debt left over will be terminated. Chapter 7 is usually the best option for low-income households with very few items of value that are non-exempt.
Chapter 13 bankruptcy, on the other hand, enables you to retain certain assets by negotiating a reasonable payment plan that can last anywhere from 3-5 years. The court will decide how much of your income is disposable and will appoint a trustee of finances during that period of payment. It also allows other debts that wouldn’t be paid off through Chapter 7 bankruptcy to be paid off as well, such as parking tickets and non-criminal fines. During Chapter 13 bankruptcy, a debtor may not incur any more debt without court approval and must maintain insurance on anything deemed as collateral.
How Does a Chapter 13 Work in Nevada?
Chapter 13 bankruptcy, commonly referenced as reorganization, allows an individual to keep their belongings (ex: home, car, personal items of value) and they can rebuild their credit over time. To begin the Chapter 13 process, a debtor will need to file a petition with a local bankruptcy court. With the petition, you will need to file your intended repayment plan and provide statements and proof of all income and debt information, list all unexpired leases, assets, and liabilities. You will need to provide tax return transcripts and other expenditures to provide the judge a better understanding of your financial situation. ‘This information is used to determine what debts can be relieved and what needs to be repaid under your payment plan. Some examples of debts that can be relieved are credit card debt, personal loans, medical debt, and certain tax debts and with zero percent interest. During this time, you will be assigned a trustee. You will send your monthly payments to the trustee and the trustee will act as the point of contact for a debtor, review the payment plan, and divide the payments to the creditors. At the end of the payment plan, the individual will be discharged of all dischargeable debt to unsecured lenders regardless of the amount of money they received.
Filing Chapter 13 bankruptcy protects you from creditors calling or writing letters harassing you over debt. As soon as you hire an attorney, the courts will notify all of your creditors.
Contact a Chapter 13 Bankruptcy Lawyer in Las Vegas
Are you struggling to pay back substantial debt? If you do not qualify for Chapter 7 bankruptcy or you have assets you want to protect, Chapter 13 bankruptcy may be the solution. Chapter 13 allows you to keep your possessions and pay back most of your debt with the remaining balances at the end of your payment plan discharged.
Contact Vegas BK today for a free consultation with a Las Vegas bankruptcy attorney who can help you decide if filing bankruptcy is the right choice for you.