Long Island Chapter 13 Bankruptcy Lawyer
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy allows for debtors to reorganize their debts and pay some or all of them off without liquidation. In addition, Chapter 13 is used to allow homeowners to catch up on their mortgage payments when they fall behind and are either in foreclosure or are facing foreclosure. Chapter 13 takes 3 to 5 years from filing to discharge. Also known as the “wage earners’ bankruptcy”, chapter 13 is best for those who have a high income and have creditors who want immediate payment of debts. With our Long Island Chapter 13 services , the debtor will distribute a portion of disposable income to unsecured debts in a good-faith effort to eliminate them. One of the best features of chapter 13 is you can keep your home when you make payments under a settlement plan. Our Long Island bankruptcy attorneys are on call to assist in answering any questions you may have regarding Chapter 13 bankruptcy.
Who Should File Chapter 13 Bankruptcy?
When filing for Chapter 13 bankruptcy, a debtor cannot have more than $394,725 in unsecured debt such as credit cards and loans and no more than $1,184,200 in secured debts such as auto loans and mortgages. Under Chapter 13 bankruptcy laws, the proceedings will suspend any foreclosure proceedings and requests for payment by most creditors.
How Chapter 13 Bankruptcy Works
Chapter 13 bankruptcy is a reorganization plan to prevent foreclosure and repossession of assets while asking for forgiveness of other debts. It is longer and more complex than the Chapter 7 bankruptcy process. However, no bankruptcy, Chapter 13, Chapter 7 , or other type of bankruptcy proceeding can discharge certain debts, such as child support and student loan debt.
The Chapter 13 Bankruptcy Process
The first step in filing bankruptcy is to contact our local Long Island bankruptcy attorney’s office where our bankruptcy attorney will explain and outline the entire Chapter 13 process. To schedule an immediate Chapter 13 bankruptcy consultation, please call our office at (631) 549-1111 or visit us at our centrally located Long Island office: 807 E Jericho Turnpike, Huntington Station, NY 11746
To begin the filing, our local bankruptcy attorneys will need the following:
· All creditors and amounts owed
· Debtors employment and other sources of income
· All of the debtors property and/or contracts and leases in debtors’ name
· Debtors’ living expenses
· Last years’ tax returns and all unpaid tax statements
In order to file for Chapter 13, the debtor must complete a credit counseling course within 180 days of filing a petition. A list of convenient credit counseling agencies for Long Island, New York residents can be found here . Also, the debtor has to come up with a repayment plan to present to the bankruptcy judge or administrator who will approve or deny the plan, pursuant to the chapter 13 bankruptcy guidelines.
Under chapter 13, the debtor must work with their local Long Island Bankruptcy Trustee to make payments, since creditors are not allowed to contact the debtor during bankruptcy proceedings.
Please note if your financial situation worsens during Chapter 13 proceedings, you must inform your local Long Island bankruptcy court and request a modification of the repayment plan. Also, you must make all payments on time. Failure to make payments on time could result in your case being dismissed.
How to Qualify for Chapter 13 Bankruptcy?
Chapter 13 is for debtors who have the ability to repay debts. Within 14 days of filing, the individual must disclose all sources of income ranging from employment to social security benefits, pensions, alimony, etc. The filer must be current in filing taxes and submit proof of filing federal and state returns for the past 4 years. (Please note, your case can be delayed until you can produce your tax documents but will be dismissed for failure to do so.) If your repayment plan is acceptable, after 3 to 5 years of successfully completing repayment terms, your Chapter 13 bankruptcy will be discharged.
Example Chapter 13 Bankruptcy Case Scenario
Aidan and Ella are a married couple with a $200,000 mortgage living in Huntington, Long Island, New York. They owe $12,000 in auto loans and $15,000 in credit card debt. Aidan works, but Ella does not. They file for Chapter 13 bankruptcy. After a month, they submit a repayment plan that shows Aidan can pay for their mortgage and auto loan with his income and can repay some of the credit card debt. Their repayment plan has three types of debts: Priority, secured and unsecured. Priority debts are the fees owed to the bankruptcy court, the debtor’s attorney, and state and federal taxes owed. Priority debts must be paid in full on a repayment plan. Secured debts are collateral debts, such as a home and car, and must also be paid in full for the repayment plan. Unsecured debts, such as credit cards and other loans, are considered unsecured. A local Long Island, New York bankruptcy judge will determine how much will be required to pay back and for how long. These debts could go from paying back none, to paying back all of the debt owed. Unsecured debts are the most flexible. After the plan is approved, it is monitored by the Bankruptcy Trustee in making payments and progress of the Chapter 13 proceedings.
Chapter 13 vs. Chapter 7 Bankruptcy
Chapter 7 is a liquidation bankruptcy proceeding, eliminating most or all of dischargeable debts. Debtors are given a clean slate and usually can keep all of their assets. Chapter 7 is a faster route for those who qualify, and it takes up to 6 months to complete. In chapter 13, you can keep all of your assets and reorganize your debt in 3 to 5 years. It extends the time you have to repay your creditors. Another major difference between Chapter 7 and Chapter 13 is in Chapter 7, a cosigner is still obligated to repay debts, but in Chapter 13, a cosigner is not obligated to repay debts.
Please note, because of how long Chapter 13 bankruptcy takes, the legal fees are somewhat higher than Chapter 7. Please ask our bankruptcy attorneys to discuss the difference in fees for each type of bankruptcy.
Life After Chapter 13 Bankruptcy
After a repayment plan is approved by the bankruptcy court, the debtor must stick to the plan and make on-time payments. Failure to make timely payments will often result in the dismissal of the case.
Alternatives to Filing for Chapter 13 Bankruptcy
What You Should Know BEFORE Filing Chapter 13 Bankruptcy
Before filing Chapter 13 bankruptcy, ask yourself: Have I tried EVERYTHING to get my debts under control? There are a few alternatives to filing bankruptcy that should be considered before going forward with bankruptcy proceedings. While we are more than happy to assist with your bankruptcy case, our team can educate you with regard to the following services:
Credit Counseling: A non-profit credit counseling organization can help you “reorganize” your debt and put together a repayment plan. Counselors provide financial literacy and resources to organize and eliminate your debt. Please note, some organizations charge a fee for services.
Debt Management: A credit counseling organization can come up with a debt management plan to show debtors how they should apply their incomes to repay their debts. It can point out what to pay off first, set goals and a realistic plan to lessen or eliminate debt. Many debt management plans focus on paying off high-interest debts first. Most debt management plans last 3 to 5 years.
Debt Consolidation: Debt consolidation agencies will factor in all credit card and other related debts for a single monthly to repay what you owe on all balances, for a fee. Please note, debt consolidation agencies generally charge a high interest rate to consolidate debts.
Debt Settlement: Like debt consolidation, a debt settlement agency can negotiate with creditors to lower debt in exchange for a monthly plan to pay off all debts. However, it is not guaranteed that creditors will accept the settlement offers proposed by agencies.
If you feel that filing Chapter 13 bankruptcy is right for you, or if you have additional questions prior to proceeding, please contact our office today to schedule an office visit or phone consultation.
Why should you contact our office to save your home and consider Chapter 13 bankruptcy?
Our bankruptcy lawyer’s office has a great deal of experience and have filed thousands of Chapter 13 bankruptcy cases. We are friendly, knowledgeable and affordable and have easy payment plans. We genuinely care about helping you with your situation and will help you succeed every step of the way. In addition, we do not believe that the client should have to fill out long questionnaires. We do virtually all of the work for you! Just follow our simple instructions and you will be successful.
Please give us a call for a free confidential consultation. We would like to assist you in any way possible. You may reach us at (631)BANKRUPT or (631)549-1111