If you are filing for Chapter 13 bankruptcy, you will encounter something that is called the “means test” which compares your income to the median income of your state. If the results come back that you are above that median income, then another assessment will take place. If you have regular income and the amount of unsecured debt owed is less than $336.900 and the amount of secured debts are less than $1,010,650, then you will need to file for Chapter 13 bankruptcy.
Chapter 13 bankruptcy is based on the principles of reorganization and allows people the chance to pay back their debts at lower monthly installments over a period of three to five years. This reorganization and debt payment planning is overseen by the Federal Bankruptcy Court to ensure that you can feasibly pay back what you owe in a reasonable block of time without living in squalor or otherwise greatly diminishing your quality of life. If you have been reading up on bankruptcy than you can already see that this chapter is far more involved and demanding than Chapter 7 bankruptcy, however there are some major pluses that make this very appealing.
First off, you are allowed to keep your property. In the case of secured debt, creditors are allowed to collect property or items such as vehicles. Happy CoupleCreditors are also not allowed to contact the debtor during this time, unless through the courts. The overall amount owed is also decreased. Foreclosure proceedings can be halted and reversed and mortgage repayment can be included in the plan. Debts that are otherwise not dischargeable under Chapter 7 bankruptcy, may be eligible under Chapter 13. And even if the creditors aren’t happy with the plan you come up with, the only approval you need is from the courts.
As with anything, there are disadvantages as well. Mainly this type of bankruptcy stays on the filer’s creditor report for ten years. During this time you will not be able to obtain any credit without court permission. If you cannot repay the debts or create a plan that is not feasible then you need to reorganize your plan or consider your other options. The planning process and proposal must be very detailed and precise so work closely with your bankruptcy lawyer. So make sure you call C. Golden and Fleming to see what they can do for you.