The Benefits of a Chapter 13 Bankruptcy
A Chapter 13 bankruptcy filing is the best choice for people who have regular income from any source and want to protect their homes, other assets, or have substantial tax liability or child support or other domestic support obligations that is nondischargable by law. A Chapter 13 bankruptcy may also be the right choice for a small business owner rather than a Chapter 11 bankruptcy. For some; however, a Chapter 7 bankruptcy is the best option. Woodruff Law offices can help you determine the best plan of action to rebuild your financial future.
In a Chapter 13 bankruptcy, you agree to a debt repayment plan that usually involves a partial reduction in your non-secured debts, reduced interest rates on your secured debts, and extended payment terms. This may provide you with the financial breathing room you need to make a financial recovery. In most instances, you can keep your house, your retirement assets, your vehicles, and other personal property.
As soon as Woodruff Law offices file a Chapter 13 bankruptcy petition, all creditor harassment, repossession actions, and the threat of foreclosure will stop. You will have the opportunity to rebuild your financial life and eventually your credit rating.
Woodruff Law Offices will help you through your financial troubles to a brighter financial future. For a free initial consultation, call Woodruff Law offices at 770-565-7924 or contact us online. Our convenient Marietta, Georgia location is here to serve you, and we offer flexible evening and weekend appointments.
Chapter 13 is a reorganization plan that assists individuals and families, as well as small business owners, in restructuring their debt in order to pay their creditors back in full or in part. If debt collection pressure or the prospect of a home mortgage foreclosure has you thinking about bankruptcy as a possible solution, contact one of our experienced attorneys at Woodruff Law offices in Marietta, Georgia. We have helped hundreds of people restructure their debt through a Chapter 13 bankruptcy filing.
We can help you find the right solution to your debt problems
Since the 2005 Bankruptcy Code amendments came into effect, many people who might otherwise have filed a Chapter 7 bankruptcy have instead filed for protection under Chapter 13. To qualify for Chapter 7 relief today, your total gross household income must be no greater than the median income in Georgia. Anyone over the median income level must file for relief under Chapter 13.
What’s the difference between Chapter 7 and Chapter 13?
There are many differences but the most obvious is that a Chapter 13 is a repayment plan over the course of three to five years. In a basic Chapter 7 case, the debtor files a petition, statements, and schedules of assets and debts, attends a meeting of creditors with the trustee, turns over non-exempt assets, if any, waits to see if anyone objects to the discharge, and walks away from most unsecured debt within four to six months.
Chapter 13 debtors, on the other hand, have to repay a portion of their unsecured debts in monthly installments over a period of three to five years. This isn’t as bad as it sounds. Most Chapter 13 plans in Georgia pay less than 10 cents on the dollar to unsecured creditors.
The most significant benefit of Chapter 13 consumer bankruptcy is the debtor’s ability to hold on to non-exempt assets that may be subject to liquidation in a Chapter 7 case. At the completion of the repayment plan, the debtor gets a discharge on the unpaid portion of the claims.
Chapter 13 debtors can cure mortgage defaults while paying off the plan
Our experience and focus on bankruptcy law allows us to design Chapter 13 plans with your specific needs and circumstances in mind. The Chapter 13 plan can be used to cure defaults on mortgages, car payments, and other secured claims. The plan can also extend the payment periods for nondischargeable debts like recent taxes or student loans. We analyze your cash flow and the value of your non-exempt assets to find practical ways to protect your home and possessions, all while meeting the minimal needs of your creditors on consumer debt.
Every case is individual and different, and we will work closely with you to make sure that you get the most out of your bankruptcy case. To learn more about our approach to client service in Chapter 13 bankruptcy, call us at 770-565-7924 to arrange for a free, no-obligation consultation or contact us on-line.
We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code.
Is Chapter 13 Bankruptcy Right for Me?
Despite what you might have heard, debt relief through bankruptcy is possible. In 2005, the rules changed somewhat, but with the help of Woodruff Law offices you can get a new financial start.
Call us at 770-565-7924 to arrange for a free, no-obligation consultation. An attorney at our firm will evaluate your individual situation, review your options, and recommend the financial strategy that is right for you.
Chapter 13 Bankruptcy Timeline
8 or 6 Years before Your Chapter 13 Bankruptcy
You are eligible for a Chapter 7 discharge after 8 years have passed from the date you filed a prior Chapter 7 case and received a discharge; or after 6 years have passed if you filed a Chapter 13 case and received a discharge.
4 or 2 Years before Your Chapter 13 Bankruptcy
You are eligible for a Chapter 13 discharge after 4 years have passed from the date you filed a prior Chapter 7 case and received a discharge or after 2 years have passed from the date you filed a Chapter 13 case and received a discharge.
If you tried to delay or defraud your creditors by transferring, hiding, or destroying your property within a five-year period prior to your bankruptcy, the bankruptcy court may deny you a Chapter 7 discharge and even allow your creditors to recover the property that you transferred.
1 Year before Your Chapter 13 Bankruptcy
If you pay back one of your creditors who is also a relative or close business associate (insider) at any time within the one-year period prior to the filing of your bankruptcy case, any amount over $600 may be recovered by a Chapter 7 trustee but usually not the Chapter 13 trustee. However, if you later convert your case to a Chapter 7, then the Chapter 7 trustee could possibly recover the amount paid to a family member and the amount may then be distributed to your other creditors.
If you had a prior bankruptcy case dismissed within one year of the time you file a Chapter 13 case, the Automatic Stay entered in the Chapter 13 case will be terminated within 30 days unless you can demonstrate that the Chapter 13 case was filed in good faith. We will take care of filing the necessary paperwork for you with the bankruptcy court.
180 Days before Your Bankruptcy
If within 180 days before your bankruptcy you had a prior bankruptcy case that was dismissed because you failed to obey any court order or you voluntarily dismissed your bankruptcy case, then you may not file your bankruptcy case until this 180-day period expires.
Also, within 180 days of your bankruptcy filing, you must receive an individual or group briefing from an approved nonprofit budget and credit-counseling agency.
180 Days before Your Bankruptcy
You must be a resident of Georgia for 180 days before you file your bankruptcy case. If you have not lived in Georgia for at least 180 days prior to filing your bankruptcy case, then you may only file your case in the state where you resided, or which has been the location of your principal assets, for a majority of the prior 180 days.
Also, if you pay back any of your creditors over $600, even one who is not a relative or close business associate (insider), at any time within the 90-day period prior to the filing of your bankruptcy case, the payment may be considered a preference payment; the bankruptcy court may recover the amount over $600 and distribute it to your other creditors. This usually does not apply to payments on secured loans like mortgages or car notes. In addition, usually it only would happen in a Chapter 7 case not a Chapter 13 case.
If you incurred new debt of $500 or more for luxury goods or services within the 90-day period before your bankruptcy, or if you obtain a cash advance in the amount of $750 or more within 70-day period before your bankruptcy, the debt is presumed to be nondischargeable. Again, as long as you file a Chapter 13 case, this credit card charge may not be a problem as long as the debt is paid back in the Chapter 13 plan.
Meet with our law firm for the initial free consultation, then retain our office and complete your first half of credit counseling. Next, meet directly with an attorney to complete the necessary bankruptcy petition, statements, and schedules in your case and ask any follow up questions. At this meeting, you will fully understand your Chapter 13 plan, what your payment is and what dividend creditors will receive in your case.
Then, your case is filed!
Your case is formally commenced when we file your bankruptcy petition, statements, schedules, and Chapter 13 Plan with the bankruptcy court. As soon as we file these documents, the bankruptcy court will enter an Automatic Stay order prohibiting your creditors from taking or continuing any collection or legal action against you. This means no more harassing letters or phone calls while your case is progressing.
Next, the bankruptcy court will send a notice of case filing to all of the creditors listed in your petition.
Additionally, the bankruptcy court will assign a Chapter 13 bankruptcy trustee to oversee or administer your case. This trustee is a federal employee appointed by the court to monitor your case and make sure you are eligible for bankruptcy. The trustee will review your petition, statements, schedules, and Chapter 13 Plan, and make sure that all these documents are complete. A meeting of creditors will be scheduled by the bankruptcy court.
Approximately 15 Days after Your Case is Filed
Approximately 15 days after your case is filed, the bankruptcy court will mail the Notice of Commencement of Case to you and to all of the creditors listed in your petition. This notice informs everyone of the date set by the bankruptcy court for the meeting of creditors, and the deadlines for your creditors to object to your plan, and to file proofs of claims in your case.
Approximately 30 to 45 Days after Your Case is Filed
The trustee will hold the meeting of creditors in about four to six weeks after your bankruptcy case is filed. At that hearing time, the trustee will learn more about the Chapter 13 Plan that proposes to pay back your secured and unsecured creditors. At least seven days prior to that meeting, you are required to provide to the trustee, and any creditor requesting it, a copy of your most recently filed tax return. We will do this for you.
The trustee presides over the meeting of creditors. At the meeting, which you are required to attend, you will be asked to testify under oath as to the accuracy of all information contained in your petition, statements, schedules, and Chapter 13 Plan. Most of your creditors do not appear at that meeting, and the Judge is not allowed to appear at that meeting. The meeting is generally informal, and in most cases will last no more than 10 minutes. However, if you do not attend the meeting, your case will be dismissed.
After the 341 meeting of creditors, your case will move to confirmation. The trustee will most likely have “objections to confirmation,” which are things that must be cured prior to confirmation. The confirmation hearing is generally in about one month after the 341 meeting of creditors.
The bankruptcy trustee and creditors have to object to the exemption claims within 30 days after the conclusion of your meeting of creditors.
60 Days after the Meeting of Creditors
The creditors have 60 days after the date first set for the meeting of creditors to object to the discharge of any of the debts listed in your petition, statements, and schedules. Creditors rarely object in a Chapter 13 but they can so be prepared for this possibility.
Your creditors can object to your request to discharge a debt if the debt was obtained or incurred as a result of any of the following types of misconduct: fraud, embezzlement or larceny, any willful or malicious injuries you caused others, or a divorce or separation (this does not include debts for child support or spousal maintenance which debts are, by law, nondischargeable).
Additionally, creditors can object to the discharge of all your debts if you have engaged in any of the following conduct: concealment or destruction of property or financial records, false statements, withholding information, failing to explain losses, failure to respond to material questions, or a discharge in a prior case.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) imposes a final hurdle before you’re eligible for your discharge: the personal financial management education requirement. This requires you to complete an instructional course concerning personal financial management with a credit counseling company approved by the United States Trustee. We will refer you to that approved credit counseling company.
90 Days after the Meeting of Creditors
Your creditors (except for government entities) must file proofs of claim (these are documents your creditors submit to the court stating how much you owe to them) within 90 days after the date first set for the meeting of creditors if they want to share in the monthly payments you make to the trustee.
3 to 5 Years after the Filing of the Case
After you successfully complete your plan by making all of the required payments, you will receive a discharge which officially wipes out any portion of the debt that was unpaid as long as it was a dischargeable debt. After the case is closed, you should order copies of your credit reports from all three credit-reporting agencies (Equifax, Experian, and Trans Union) to make sure that all of the debts you intended to pay back or discharge are zeroed out on your credit reports with a notation that the debt was included in your bankruptcy. If necessary, pay the extra fee to receive your credit reports and your credit score.
Contact us if your credit report is not accurate and we can help you dispute any inaccuracies in order to immediately improve your credit score.
We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code.