Bankruptcy
If you’re considering Chapter 13 bankruptcy as a way to get your financial affairs in order, it’s important to understand the requirements involved. Chapter 13 bankruptcy is a type of bankruptcy that allows individuals to reorganize their debts and create a repayment plan to pay off their creditors over a period of time, usually three to five years. There are important requirements you must fulfill if you want to file.
Steady Income
Each individual filing for Chapter 13 bankruptcy must demonstrate that they have a steady income. This can come from a job, self-employment, or another regular source of income that allows you to make monthly payments towards your repayment plan.
Debt Limitations
Chapter 13 bankruptcy has debt limitations, which as of 2021, cannot exceed $1,257,850 for secured debts (such as mortgages or car loans) and $419,275 for unsecured debts (such as credit card debt or medical bills). Be sure to review the limitations constantly because they are subject to change.
Credit Counseling
Before filing for Chapter 13 bankruptcy, you are required to complete credit counseling from an approved agency within 180 days prior to filing. With this education, you will be able to learn more about your financial scenario as you navigate your case.
Repayment Plan
One of the main aspects of Chapter 13 bankruptcy is creating a repayment plan. You must propose a plan that outlines how you will repay your debts over a period of three to five years. This plan must be approved by the bankruptcy court and your creditors, as you can learn from a qualified Chapter 13 bankruptcy lawyer, like one from The Law Offices of Neil Crane.
Disposable Income
Your repayment plan must be based on your disposable income, which is the income left over after paying for necessary expenses like housing, food, and transportation. With your disposable income, you can have a better sense of how much money will go towards your monthly payment.
Trustee Oversight
Trustees are appointed to every person who files for bankruptcy. The trustee is responsible for collecting your monthly payments, distributing them to your creditors according to the approved plan, and ensuring that you comply with the bankruptcy laws.
Regular Payments
You must make regular monthly payments to the trustee, who will then distribute the funds to your creditors. Do not get behind your payments so that you do not run into any issues.
Financial Management Course
After filing for Chapter 13 bankruptcy, you are required to complete a financial management course from an approved agency. You will learn important skills like budgeting and making smart financial choices.
Compliance with Court Orders
Throughout the Chapter 13 bankruptcy process, you must comply with court orders, attend hearings as required, and provide accurate and complete financial information. If you fail to provide detailed and correct information,you may jeopardize your bankruptcy case.
It’s crucial to understand these requirements and comply with them to ensure a smooth bankruptcy process. Consulting with a qualified bankruptcy attorney can also provide you with guidance and assistance in navigating the Chapter 13 bankruptcy requirements and achieving financial relief.