What You Need To Know Before Filing A Chapter 13 Case

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May 15, 2023  ( 1 post )  
Lincoln Law (lincolnlawfirm1)

If you struggle to keep up with your bills, Chapter 13 bankruptcy may be a viable option. It is designed for individuals who have regular income and want to keep their property. This blog post will discuss the basics of Chapter 13 bankruptcy and answer some common questions about it. It will also provide information on how to find a qualified bankruptcy attorney in Austin TX.

Background Of Chapter 13 Bankruptcy


Chapter 13 bankruptcy's legal origins came about in the Bankruptcy Reform Act of 1978. The Chapter 13 bankruptcy process is governed by federal law, meaning it will be primarily the same regardless of which state you live in. Chapter 13 bankruptcy is sometimes called "wage earner's bankruptcy" because it is geared towards people with a regular income source.

How Chapter 13 Bankruptcy Works


If you file for Chapter 13 bankruptcy, you will be required to submit a repayment plan to the court. This repayment plan will outline how you will repay your creditors over three to five years. The amount of money you must pay back each month will depend on your income, debts, and the value of your assets. Chapter 13 bankruptcy is designed to help you catch up on past-due payments and keep current on your bills.

Advantages Of Chapter 13 Bankruptcy


One of the significant advantages of Chapter 13 bankruptcy is that it will allow you to keep your property because Chapter 13 bankruptcy has a "repayment plan" provision. In addition, Chapter 13 bankruptcy also has an "automatic stay" provision, which means that creditors are not allowed to take any collection activity against you once you have filed for Chapter 13 bankruptcy. These activities include wage garnishment, foreclosure proceedings, and repossession.

Eligibility Requirements For Chapter 13 Bankruptcy


To be eligible for Chapter 13 bankruptcy, you must meet specific requirements. First, you must have a regular source of income. This income can come from employment, self-employment, alimony, child support, or government benefits. Second, the combined total of your secured and unsecured debts must not exceed specific amounts.  These amounts are adjusted every three years to keep up with inflation. For 2022, this amount is $2,750,000.00 under the Bankruptcy Threshold Adjustment and Technical Corrections Act. Finally, you must have filed all required tax returns for the past four years.

Chapter 13 Plan And Confirmation Hearing


After you have filed for Chapter 13 bankruptcy, you must submit a Chapter 13 repayment plan to the court. This plan will outline how you will repay your debts over the next three to five years. Once the Chapter 13 plan is filed, a confirmation hearing will be scheduled. At the confirmation hearing, the bankruptcy judge will review your repayment plan and decide whether to approve it.

The Chapter 13 Plan Contents


The Chapter 13 Plan should contain the following information:


  • The total amount of money you will pay to your creditors over the life of the plan
  • How much will need each creditor receive
  • The duration of the plan
  • Your disposable income
  • How will your payments be made, such as payroll deduction or issuance of PDCs


If the bankruptcy judge approves your Chapter 13 plan, you will be required to make the payments outlined in the program. These payments are typically made through payroll deduction.

Discharge Of Debts Under Chapter 13 Bankruptcy


Under Chapter 13 bankruptcy, most debts will be discharged after you have made all of the required payments under your Chapter 13 plan. However, some debts cannot be discharged in Chapter 13 bankruptcy. These debts include child support, alimony, student loans, and certain taxes.

The Lincoln-Goldfinch Law Firm 


Chapter 13 bankruptcy is a viable option for individuals who have regular income and want to keep their property. If you are considering Chapter 13 bankruptcy, it is essential to seek the advice of a qualified bankruptcy attorney. The Lincoln-Goldfinch Law Firm can help you navigate the Chapter 13 bankruptcy process and ensure that your rights are protected. Contact the firm to assign you a bankruptcy lawyer in Austin that will help you with your current financial situation.


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(855) 502-0555

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