Am I a Good Candidate for Chapter 13 Bankruptcy?
When you are having significant difficulty paying your debts but you are continuing to work and need a long-term solution to getting your finances back on track, Chapter 13 bankruptcy could be a beneficial tool for you. There are different types of personal or consumer bankruptcy, and they have different eligibility requirements. Different kinds of personal bankruptcy also have specific ways of helping consumers with their debt, and some of the solutions are more immediate while others occur over a period of time. To determine the best type of bankruptcy for you, it is important to seek advice from an Oak Park bankruptcy lawyer who can evaluate the particular facts of your situations. In the meantime, however, the following are some questions you can ask yourself to get a head start on determining whether you may be a good candidate for Chapter 13 bankruptcy.
Are You Seeking to Have All Eligible Debts Discharged and to Get a Fresh Start?
If you are considering filing for bankruptcy because you have friends or family members who have filed for bankruptcy and have had their debts discharged within a few months and you want to do the same, it is essential to understand that you are likely not seeking Chapter 13 bankruptcy. Chapter 7 bankruptcy, unlike Chapter 13 bankruptcy, is the type of consumer bankruptcy case that allows debtors to have eligible debts discharged when all non-exempt assets are liquidated to repay creditors. If you are looking for a way to have your debts discharged in a relatively short amount of time, you will want to speak with a bankruptcy lawyer about your eligibility for Chapter 7 bankruptcy instead.
Are You Currently Employed?
Are you currently employed? In order to be eligible for Chapter 13 bankruptcy, the U.S. bankruptcy code requires a debtor to be able to show that they earn a regular income and will be able to meet the terms of a bankruptcy reorganization repayment plan. What does this mean? In short, Chapter 13 bankruptcy is a type of reorganization bankruptcy, and it is also known commonly as a “wage earner’s” form of bankruptcy. Rather than liquidating a debtor’s non-exempt assets—which is what happens in a Chapter 7 bankruptcy case—the debtor will enter into a repayment plan with terms that usually last for anywhere from three to five years. Over the course of that extended time period, the debtor will make regular monthly payments, which will go toward repaying creditors. At the end of the repayment plan period, if the debtor has satisfied the terms of the agreement, any remaining eligible debt can be discharged.
Since bankruptcy courts want to make sure that a debtor who files for Chapter 13 bankruptcy will be able to satisfy the terms of the repayment plan over the period of three to five years, the court will want to make sure that you are employed and that your employment is steady.
How Much Debt Do You Have?
How much debt do you currently owe? There are limits on debt amounts for a Chapter 13 case. In 2021, debt limits are $419,275 for unsecured debts and $1,257,850 for secured debts. If you owe more than one of those amounts, you will not be eligible for Chapter 13 bankruptcy, but you may be eligible for Chapter 11 bankruptcy instead. Chapter 11 is quite similar to Chapter 13 bankruptcy and does not have debt limits.
Seek Advice From a Bankruptcy Lawyer in Oak Park
Do you have questions about whether Chapter 13 bankruptcy is right for you? One of our Oak Park bankruptcy attorneys can discuss your case with you today. Contact the Emerson Law Firm to learn more.
See Related Blog Posts:
I Do Not Want to Lose My Property: Does This Mean I Should Avoid Bankruptcy?
Should I File for Bankruptcy After Retirement?
Are You Seeking to Have All Eligible Debts Discharged and to Get a Fresh Start?
If you are considering filing for bankruptcy because you have friends or family members who have filed for bankruptcy and have had their debts discharged within a few months and you want to do the same, it is essential to understand that you are likely not seeking Chapter 13 bankruptcy. Chapter 7 bankruptcy, unlike Chapter 13 bankruptcy, is the type of consumer bankruptcy case that allows debtors to have eligible debts discharged when all non-exempt assets are liquidated to repay creditors. If you are looking for a way to have your debts discharged in a relatively short amount of time, you will want to speak with a bankruptcy lawyer about your eligibility for Chapter 7 bankruptcy instead.
Are You Currently Employed?
Are you currently employed? In order to be eligible for Chapter 13 bankruptcy, the U.S. bankruptcy code requires a debtor to be able to show that they earn a regular income and will be able to meet the terms of a bankruptcy reorganization repayment plan. What does this mean? In short, Chapter 13 bankruptcy is a type of reorganization bankruptcy, and it is also known commonly as a “wage earner’s” form of bankruptcy. Rather than liquidating a debtor’s non-exempt assets—which is what happens in a Chapter 7 bankruptcy case—the debtor will enter into a repayment plan with terms that usually last for anywhere from three to five years. Over the course of that extended time period, the debtor will make regular monthly payments, which will go toward repaying creditors. At the end of the repayment plan period, if the debtor has satisfied the terms of the agreement, any remaining eligible debt can be discharged.
Since bankruptcy courts want to make sure that a debtor who files for Chapter 13 bankruptcy will be able to satisfy the terms of the repayment plan over the period of three to five years, the court will want to make sure that you are employed and that your employment is steady.
How Much Debt Do You Have?
How much debt do you currently owe? There are limits on debt amounts for a Chapter 13 case. In 2021, debt limits are $419,275 for unsecured debts and $1,257,850 for secured debts. If you owe more than one of those amounts, you will not be eligible for Chapter 13 bankruptcy, but you may be eligible for Chapter 11 bankruptcy instead. Chapter 11 is quite similar to Chapter 13 bankruptcy and does not have debt limits.
Seek Advice From a Bankruptcy Lawyer in Oak Park
Do you have questions about whether Chapter 13 bankruptcy is right for you? One of our Oak Park bankruptcy attorneys can discuss your case with you today. Contact the Emerson Law Firm to learn more.
See Related Blog Posts:
I Do Not Want to Lose My Property: Does This Mean I Should Avoid Bankruptcy?
Should I File for Bankruptcy After Retirement?
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