Chapter 13 Bankruptcy Attorneys in Phoenix
If you are considering Chapter 13 bankruptcy, you may have originally wanted to file Chapter 7 but did not qualify. Alternatively, you may believe Chapter 13 could protect your assets better than any other alternative. You might have heard that Chapter 13 could even help you save your home from foreclosure.
Chapter 13 is essentially a debt reorganization process, frequently serving as a powerful alternative for those who cannot benefit from Chapter 7. If your income is consistent enough to make monthly payments toward your debt, this path may be right for you. At the end of the process, you can benefit from a discharge of any unsecured debt that remains after you’ve completed all your scheduled payments.
At The Gavel, our Phoenix Chapter 13 lawyers have extensive legal experience. After determining which type of bankruptcy is best for you, he can carefully and strategically guide you through every step of the process. The goal of bankruptcy is to allow overwhelmed debtors to regain control over their finances through court-ordered relief, and our team can help you accomplish this goal.
How Does Chapter 13 Bankruptcy Work?
Also called the wage earner’s bankruptcy, Chapter 13 requires the filer to propose a 3-5-year debt repayment plan. The filer will make monthly payments to the bankruptcy trustee, who will then distribute it among creditors according to the Bankruptcy Code.
Once the filer has completed all payments, the court can discharge any remaining unsecured debt, including:
- Credit card debt
- Personal loans
- Medical bills
- Utility bills
Unlike Chapter 7, Chapter 13 does not involve liquidation of assets. Many people file Chapter 13 because they want to save their homes from foreclosure. The plan allows them to continue making mortgage payments while spreading out delinquent payments over the course of the 3-5 years.
Similarly, filers can catch up on student loans, back-taxes, child support arrears, and missed auto loan payments during the Chapter 13 process. Due to the automatic stay, which halts and prevents all collection actions, the debtor can take this time to regain control over their finances without the looming threat of losing their property.
Only individuals and sole proprietors are eligible to file for Chapter 13 relief—not separate business entities, such as corporations or partnerships. The prospective filer must have a large enough disposable income (i.e. income minus allowable living expenses) to make monthly payments.
Additionally, as of April 2019, the debtor’s unsecured debts must be less than $419,275, and secured debts must be less than $1,257,850. Chapter 13 debt limits adjust every 3 years, and the next Chapter 13 debt limit adjustment will occur on April 1, 2022.
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Bankruptcy is a very difficult legal procedure to navigate on your own. It is extremely important to consult with an experienced Phoenix bankruptcy attorney who can evaluate your unique situation and advise you regarding all available options. Our team at The Gavel can advocate for your rights and future every step of the way, recommending only what we believe will most effectively accomplish your goals.