Chapter 13 Bankruptcy Eligibility
Bankruptcy Attorney in Raleigh, North Carolina
Filing for Chapter 13 bankruptcy is one of the most effective debt-relief options that can help you emerge from debt and secure a fresh financial start. Sometimes called the wage earner’s bankruptcy, Chapter 13 allows debtors with regular income to repay all or part of their debts as an alternative to liquidation. It is a bankruptcy proceeding in which debtors undertake a reorganization of their finances under the approval of the bankruptcy court.
Declaring bankruptcy is a major financial decision that comes with inevitable consequences that can impact your creditworthiness for years. Therefore, it pays to explore all debt-relief options before filing a Chapter 13 bankruptcy petition. Before filing for bankruptcy, it is advisable to consult a credible Raleigh bankruptcy attorney to help you assess your finances and decide whether Chapter 13 bankruptcy filing will work for you.
Hands-On Chapter 13 Bankruptcy Attorneys in Raleigh, NC
At Cameron Bankruptcy Law, we have extensive experience in providing legal services to people who have or are going through bankruptcy for decades. Our bankruptcy law firm will guide you throughout the bankruptcy process while you focus on getting your finances back on track.
How Does Chapter 13 Bankruptcy Work?
Chapter 13 bankruptcy allows you to develop a repayment plan explaining how you intend to pay off your debts within three to five years – generally five years. The repayment plan outlines how you will pay your priority and secured debts by making fixed payments on time to the bankruptcy trustee.
Your payment goes to the trustee on the approved schedule and they are responsible for dividing it among your creditors as detailed in the repayment plan. The amount of the plan payment is calculated based on your disposable income. Our competent Raleigh bankruptcy attorneys can help you come up with a restructured payment plan that meets all requirements for approval.
If you have chapter 13 bankruptcy eligibility and the bankruptcy court approves the plan and you make regular payments, most or all of any remaining debts at the end of the three-to-five-year period may be discharged. If you are on time with your payments, you can keep the assets after the repayment plan is over. As long as you will complete a court-approved repayment plan, you can keep your property, avoid repossession, and stop foreclosure. Not following through on the repayment plan could complicate your bankruptcy case. If you missed or stopped your monthly payments, your petition may result in a bankruptcy dismissal instead of a discharge.
How Do I Qualify for a Chapter 13 Bankruptcy?
Before you declare bankruptcy, you must know how to choose the best bankruptcy type that will help you pursue debt settlement. Chapter 7 and Chapter 13 are the two common types of bankruptcy. If Chapter 7 liquidation bankruptcy doesn’t work for you, then Chapter 13 might be your last resort to help you repay all your debt while you save your assets from liquidation. However, keep in mind that Chapter 13 bankruptcy may not work for everyone.
Chapter 13 bankruptcy can be an expensive option. You need to pay your non-dischargeable debts and the value of your non-exempt property using all your disposable income.
In North Carolina, there are certain requirements that you need to meet before you qualify for Chapter 13 bankruptcy. In addition, there are many documents you must compile to file with the court, including documentation of your income, expenses, assets, and liabilities. To ensure your Chapter 13 bankruptcy eligibility, a top-ranking bankruptcy lawyer in Raleigh, North Carolina can help you with all the necessary paperwork.
You must have a regular monthly income.
When you file Chapter 13 bankruptcy, you must have a regular and sufficient monthly income to pay off your debts. You need to prove to the bankruptcy court that you can afford to pay both your monthly living expenses and repayment plan dues. If your monthly income is irregular or too low, the court will not approve your proposed repayment plan.
You are not a business entity.
Only individuals and those who are filing jointly as spouses can file for this chapter. Corporations, partnerships, or limited liability companies (LLC) are not eligible to file for Chapter 13 bankruptcy. In some cases, a sole proprietorship may benefit from this chapter since business-related debts that you’re personally liable for will also be a part of your plan.
You have no record of a prior bankruptcy.
To qualify for Chapter 13 bankruptcy, you must not have filed for Chapter 13 bankruptcy in the past two years or Chapter 7 bankruptcy in the past four years. Furthermore, you must not have filed any bankruptcy petition (Chapter 7 or 13) in the last 180 days that was dismissed for certain reasons such as failing to comply with court orders.
You must be current on tax filings.
To meet Chapter 13 requirements, you must submit proof of filing state and federal income tax returns for the past four years. At least seven days before the first meeting of creditors, you must provide the bankruptcy trustee with a copy of the most recent federal tax returns.
You finished the credit counseling sessions.
Before you file any bankruptcy chapter, you must take credit counseling courses from an approved credit counseling agency at least 180 days before the bankruptcy filing. You need to submit a certificate of proof to the bankruptcy court as part of the paperwork.
Your debts are not too high.
Secured debts and unsecured debts cannot exceed certain amounts. Individuals whose debt amount meets certain requirements are eligible to file for Chapter 13 bankruptcy. This chapter imposes a limit on the amount of a filer’s debt. The limit may be subject to change every three years.
How do I get discharged from Chapter 13 bankruptcy?
When you complete your Chapter 13 repayment plan, you’ll receive a discharge order that will wipe out the remaining balance of your qualifying debts. A Chapter 13 discharge is the final order given by the bankruptcy court eliminating your obligation to pay off your dischargeable debts under the Chapter 13 plan. Creditors are prohibited from collecting debts once your bankruptcy case is finalized. When debt is discharged, a lender can no longer make attempts to collect the debt and the debtor is no longer responsible for paying it back.
Not all debts can be discharged when you file for bankruptcy. A qualified North Carolina bankruptcy attorney can help you determine the types of debts that can be discharged in this chapter. Filing Chapter 13 bankruptcy can wipe out certain debts that are not dischargeable in other bankruptcy chapters such as Chapter 7. Debts from property damage, non-dischargeable taxes, divorce property settlement, unsuccessful bankruptcy case, or retirement account loans can be wiped out only in Chapter 13 bankruptcy.
Hire an Experienced Raleigh Bankruptcy Attorney Now!
Dealing with unmanageable debt and facing bankruptcy alone can be stressful and overwhelming. To find out your Chapter 13 bankruptcy eligibility and to ease the burden of Chapter 13 bankruptcy filing, do not hesitate to consult our experienced Raleigh bankruptcy attorneys at Cameron Bankruptcy Law. We will work with you to figure out an ideal payment plan that you would be able to afford. We will explain the bankruptcy process, the automatic stay, answer your questions, and walk you through the paperwork. Our Raleigh, NC bankruptcy law firm will provide the legal services that you need to ensure the success of your bankruptcy case.