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Bankruptcy is not limited to individuals without any assets to their name, and there are different options depending on your circumstances. If you are overwhelmed by debt but have some assets available to you and do not qualify under Chapter 7 of the bankruptcy code, you could consider filing under Chapter 13.
A compassionate bankruptcy attorney could help you determine if this is the right option to offer you a fresh financial start. A Warren Chapter 13 bankruptcy lawyer could answer your questions about eligibility and guide you through the process.
Chapter 7 and Chapter 13 are the two most common forms of consumer bankruptcy, but they serve distinct purposes. Chapter 7, often called liquidation bankruptcy, is for individuals with limited income who cannot reasonably repay their debts. A trustee appointed by the court may sell non-exempt assets to discharge unsecured debts. The Chapter 7 process usually takes just a few months, making it a quick option for those who qualify through the means test.
Chapter 13 is also known as a wage earner’s plan. Instead of selling assets as in Chapter 7, debtors use Chapter 13 to create a repayment plan that lasts three to five years. This allows individuals with a steady income to pay past-due bills for secured debts, such as mortgages or car loans, while still discharging some of their unsecured debts. Chapter 13 may protect property that could be at risk in Chapter 7, as it focuses on repayment rather than liquidation.
Overall, Chapter 7 offers faster debt relief but requires meeting strict eligibility standards, and Chapter 13 provides more flexibility for those who can commit to a repayment schedule. It is important to note that Chapter 7 requires you to qualify through means testing, preventing you from filing under it if you have assets or income over a certain level. Our Warren attorneys could provide guidance and more information on different bankruptcy options to help you decide if Chapter 13 is right for you.
One of the unique parts of Chapter 13 bankruptcy is the creation of a repayment plan that the court and trustee overseeing your case approve. This plan is a framework that allows you to reschedule your debts and repay your creditors over time. Your plan will outline how you will allocate monthly payments to both your secured and unsecured creditors over three to five years.
Once you file your plan, your bankruptcy trustee reviews it to ensure it complies with federal law and is reasonably likely to succeed. If the trustee doubts your ability to make payments or feels you are not providing enough for your creditors, they can challenge the plan. Creditors also have the opportunity to object if they believe the plan unfairly impacts their rights. A judge will arrange a hearing to confirm the plan or hear any objections. A Warren lawyer with experience in handling Chapter 13 bankruptcy filings could help you craft a reasonable and compliant repayment plan, ensuring this process proceeds as smoothly as possible.
After confirmation, you must make regular monthly payments to the trustee, who distributes the funds to creditors according to the terms of the plan. When you successfully complete the plan, any eligible unsecured debts that remain are discharged, giving you a fresh financial start.
Filing for bankruptcy could brighten your financial outlook, but navigating the process alone is not without risk. A Warren Chapter 13 bankruptcy lawyer could provide you with the guidance you need to make decisions with confidence and move toward a debt-free future. Fill out our bankruptcy calculator today to discover how a wage earner’s plan might be the right option for you.
We have locations available by appointment in the following areas. Please call us to speak to an attorney and set up an initial meeting.
We are a debt relief agency helping people file bankruptcy under the United States Bankruptcy Code.
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