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What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a form of debt relief intended to help hard-working individuals who are behind on payments, such as their mortgage. Unlike chapter 7 bankruptcy, which dissolves unsecured debt, Chapter 13 bankruptcy reorganizes a person’s debt with a repayment plan, allowing them to repay some or all of their debt over a period of 3 to 5 years. Once the repayment plan is completed, the debtor will receive a discharge of debts and will be able to keep his or her property. Chapter 13 bankruptcy is ideal for individuals who have a regular source of income and have substantial equity in secured assets such as their home or vehicle. Chapter 13 bankruptcy may be ideal in several instances, such as preventing foreclosure on a home, helping make up for missed payments (on a mortgage, rent, or a car,) halting interest from accruing on tax debt and helping people repay back taxes.

Should I File for Bankruptcy?

Chapter 13 bankruptcy may be an ideal form of debt relief if you have a regular income but are struggling to stay on top of your debts, such as mortgage payments. The best way to determine if chapter 13 is a viable option for you is to schedule a free consultation with William Waldner, a reputable NYC bankruptcy attorney who is vastly experienced in filing chapter 13 and chapter 7 bankruptcy.
During your free consultation with William Waldner, you can discuss if filing chapter 13 bankruptcy is the best strategy for debt relief.

What is a Chapter 13 Repayment Plan?

When filing for Chapter 13 bankruptcy a debtor must submit a repayment plan to be approved by the court. Repayment plans are complicated and require the expertise of a qualified NYC bankruptcy lawyer to ensure your repayment plan is approved by the courts and that your plan provides you with the most advantageous repayment schedule possible.
Repayment plans propose scheduled payments, typically monthly payments, paid directly to a court trustee. The trustee then distributes the payment to your various creditors in accordance with your repayment plan’s directives. Depending on your income, the repayment plan spans 3 to 5 years. Once the repayment plan is completed, any remaining debt is discharged.

How much does bankruptcy cost in NYC?

How much your Chapter 13 Bankruptcy costs depends on several factors: filing fees, fees for court-mandated education courses, fees for acquiring the necessary information for filing (such as credit reports) and preparation/representation fees of a NYC Bankruptcy Lawyer.

Chapter 13 Bankruptcy Process:

With a reputable bankruptcy lawyer, filing chapter 13 may be an ideal form of debt relief allowing you to keep your home, vehicle, and other valuable assets while you repay part of your debt to your creditors under a manageable repayment schedule.

Can I qualify for Chapter 13 Bankruptcy ?

In order to file chapter 13 bankruptcy in NYC an individual must meet specific qualifications laid out by the state of New York. Many individuals file for chapter 13 bankruptcy when they do not qualify for a chapter 7 filing. Disqualifications for chapter 7 bankruptcy include:

  • Assets exceed the exemption limit for chapter 7
    Household income is too high to qualify for chapter 7

 

There are also debt limits that determine an individual’s eligibility for filing for chapter 13. To qualify for chapter 13, the amount of debt of an individual, even if they are self-employed or operating an unincorporated business, cannot have:

  • Unsecured debts more than $419,275.
    Secured debts of more than $1,257,850.

 

If you are a married couple you can’t double these limits but on the advice of your attorney, you may be able to file two Chapter 13 cases to further protect your family.

Lastly, to qualify for chapter 13 bankruptcy your monthly earnings must exceed your monthly expenses or you will need a third party to help pay for your case. This ensures the court you are financially capable of making the monthly payments proposed in your repayment plan.

 

Chapter 13 Bankruptcy FAQ

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