When you want to keep your assets such as a home or vehicles you may not want to file for Chapter 7 which will liquidate your assets and pay your creditors.
Chapter 13 bankruptcy involves reorganization and repayment of all or most of your prior debt. The plan is court approved and takes approximately five years to complete. To enter into a Chapter 13 bankruptcy, you must have a reliable source of income that would allow you to pay back your debt.
The repayment plan will be based on your income level allowing you to pay for all of your monthly expenses, any court-ordered payments such as alimony or child support and also covering unsecured and secured prior debt. The plan is very specific and detailed and uses national standards for income and expenses.
Filing the Plan
Once the form is completed with the help of your bankruptcy attorney, your attorney will file the plan with the court. Using this form the trustee assigned to your case will determine the amount of your monthly disposable income. The trustee will collect this disposable income for up to five years and send the money to your creditors. By law, the bankruptcy process cannot be longer than five years.
Rules of Bankruptcy
Along with filing the paperwork, you will also need to attend an approved credit counseling course and a debtors education course, both of these can be completed online or over the phone.
Attending a creditors meeting (or 341 meeting) is where you, your lawyer the trustee and the creditors will meet to discuss your income and debt. The trustee will ask you questions about your documentation and your ability to make the payments.
Once you have completed these courses and made your required payments for the five years, your bankruptcy will be discharged, and all remaining debt will be eliminated.
If you are considering bankruptcy and Chapter 13 seems like your best option, contact a Dallas bankruptcy attorney to get started on the plan to your fresh financial start.