If you are considering a Chapter 13 Bankruptcy in Prattville AL, there are several items to keep in mind. It’s best to become as well-versed on the subject and options available to you before you ever schedule the appointment with an attorney. With that in mind, consider the following.
WAGE EARNER’S PLAN
Chapter 13 bankruptcy is also known as the wage earner’s plan. It’s the option most people use when they have a steady stream of income coming in to develop a repayment plan of all or part of their debts. Consider this the installment plan, whereby debtors suggest a plan for repaying the debt over three to five years. In no instance, should the debt go for longer than five years?
CHAPTER 13 vs. CHAPTER 7
A chapter 13 plan provides several advantages over the similar liquidation of chapter 7. Perhaps most notable is that chapter 13 gives filers a chance to save their house from folding into foreclosure. With a chapter 13 filing, foreclosure proceedings can be stopped, and past-due mortgage payments can be taken care of over time. Another positive feature of a 13 over a 7 is that an individual can reschedule secured debts, extending it over the life of the plan. This could conceivably lower the payments.
ARE YOU ELIGIBLE?
One of the first criteria that must be analyzed is how much-unsecured debt is included. If the total amount of unsecured debt is less than $394,725 and secured is less than $1,184,200, Chapter 13 may be applicable. Keep in mind the amounts are periodically adjusted. You would not be eligible for a 13 if, in the last 180 days, a dismissed bankruptcy was dismissed because of failure to appear before the court.
HOW DOES IT WORK?
A Chapter 13 Bankruptcy in Prattville AL starts when you file a petition with the bankruptcy court serving the area where you live. There, you will also provide a schedule of assets and liabilities, a list of all current income and expenses, a statement of financial affairs and any contracts or unexpired leases. Filers must also provide copies of their tax returns for the most recent year and any years during which the case is filed.
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