4 Planning Guidelines When Filing For Chapter Thirteen

25 July 2022
 Categories: Law, Blog


Filing for bankruptcy is one of the sound financial decisions you can make when you feel that your finances are falling apart. Under the Chapter 13 plan, you create a schedule that allows you to recover part of the debt. The attorney will help assess your financial capacity and determine how much every person you owe should expect from you every month. Here are the factors that the professionals consider when deciding the installments you should make.

The Time Available to Repay

The repayment period is the first determiner of the amount of each payment. Most courts will allow you three to five years to make the payments. The system determining how many years you should get relies on your earnings. If your income is more than the median for your state, you will get five years. Therefore, you can only tell how much you are allowed to pay after speaking to the professionals and having them assess your income concerning the state median for a similar household.

The Types of Things You Owe

The debts that you owe also play a factor in determining the repayment process. You cannot discharge certain types of debt under Chapter 13. The priority debts you cannot skip include child support, taxes, and spousal support. In addition, if you have mortgage arrears, the state will expect you to repay all your pending payments during the repayment period. The law will also compel you to settle all the secured loans and the interest that comes with them.

Your Extra Earnings

The amount of money you have not tied down to bills and payments is another essential factor affecting your Chapter 13 repayment plan. The court system will typically demand that you dedicate your disposable income to help repay all your unsecured debts. The lawyer will walk you through the calculations to decipher how much extra income you have and how to distribute it to cover all your debt.

The Property You Cannot Dispose

There is a property that will not get spared when filing for Chapter 13. Any property you used to secure a loan gets classified here. The law will expect you to repay the loan if you want to redeem the property.

Talk to a competent bankruptcy lawyer to determine the conditions you must fulfill to qualify for chapter thirteen. The process will be easy when you have their guidance, and you can return to rebuilding your life. It also minimizes the long-term consequences of insolvency. For more information, contact a Chapter 13 bankruptcy attorney near you.