Chapter 13 Bankruptcy Attorney in Philadelphia
Chapter 13 bankruptcy may present an alternative solution to your debt problems if you are ineligible for Chapter 7 bankruptcy. The main difference between Chapter 13 and Chapter 7 is that under Chapter 13, rather than liquidating your assets, you will enter into a three to five-year payment plan to restructure your debts, which usually includes paying only a fraction of your unsecured debt, such as credit cards or past medical bills. Chapter 13 can be a good choice for homeowners who wish to stop foreclosure and pay arrearages on their mortgage over time. Chapter 13 can also work for people with steady sources of income that do not pass the Chapter 7 means test.
Debt Repayment Plan Lawyer for Residents in Philadelphia
Under Chapter 13, your repayment plan is based on your ability to pay. We will propose a repayment plan to the bankruptcy court. Your creditors will have limited opportunities to object to your plan. Once the court approves your repayment plan, you can begin paying your debts according to the terms of the plan. Chapter 13, like Chapter 7, has an automatic stay, to stop foreclosure and keep other creditors from taking action against you after you have filed for bankruptcy. Once your payment plan is concluded, any remaining unsecured debt will be discharged.
What You Need to Know About Filing for Chapter 13 Bankruptcy in Philadelphia
Our Philadelphia bankruptcy attorney Alfred Abel answers some of the top questions about Chapter 13 bankruptcy.
I. Why would someone file for Chapter 13 bankruptcy?
Chapter 13 bankruptcy protects your most important assets, such as your home, car, retirement plan, and other important property. Unlike Chapter 7, there is a restructuring plan that may save assets rather than them being liquidated in an auction to pay the debts, making Chapter 13 much more attractive for those who qualify.
Chapter 13 is also a good choice for someone who already has assets which can be used to pay off most or all of his/her debts but needs time to re-organize finances without being hounded by creditors.
II. What are the requirements for filing Chapter 13?
The eligibility requirements for Chapter 13 are fairly straightforward.
- You must live in, own property in, or do business in the United States.
- You must have a regular income.
- Your total unsecured debt must be no more than $394,725.00, and your total secured debt must be no more than $1,184,200.
- You cannot be a stockbroker or other commodity broker.
- You must have received credit counseling from an approved agency within the last 180 days.
- Business entities cannot file for Chapter 13, but an individual engaged in business can.
III. Can a small business qualify for Chapter 13 bankruptcy?
Yes and no. The business cannot file for Chapter 13 under its own name, however, a small business owner may be able to file as an individual if they otherwise meet the above requirements. Such cases are tricky and more difficult to successfully pursue compared to private Chapter 13 cases. To succeed, you will require the help of a highly-qualified Chapter 13 bankruptcy lawyer.
IV. Is a Chapter 13 bankruptcy lawyer required to file for bankruptcy?
In practical terms, yes. Bankruptcy law is extremely complicated. Having a qualified Chapter 13 bankruptcy lawyer in Philadelphia on your side makes it much more likely that your filing will be successful, and that you will get the terms you desire. Some researchers state that only one-third of cases are successfully completed.
V. What does a Chapter 13 discharge mean?
When debts are discharged under Chapter 13, they are legally unenforceable against the debtor. You no longer have any responsibility to pay them back, nor can the original creditors take any further action demanding payment. Generally, under Chapter 13, many debts are discharged entirely or for only pennies on the dollar.
VI. What debts cannot be discharged under Chapter 13 bankruptcy?
There are numerous exceptions to Chapter 13 discharge, and these are debts that you will still have to mostly or entirely repay. Such debts include:
- Domestic support debts, such as alimony and child support
- Debts related to injuries or deaths caused by the debtor driving while intoxicated
- Other debts resulting from criminal fines or other forms of court-ordered restitution, such as in fraud cases
- Debts based on damages awarded in civil cases due to the debtor’s willful or malicious conduct
- Tax debts from the past three years
- Most student loan debts
- Debts incurred after the initial Chapter 13 bankruptcy filing
- Debts owed to creditors who did not receive notice of the bankruptcy filing
VII. What does a Chapter 13 plan mean?
The Chapter 13 plan is simply the plan for repayment. The plan is drafted by the debtor and his/her Chapter 13 bankruptcy attorney and submitted to the court for approval. A plan includes matters such as what assets will be used to pay the debt, establishment of a payment plan with regular monthly installments, and setting forth of the plan’s duration.
VIII. What is a Chapter 13 trustee?
As you pay off your debts according to your Chapter 13 plan, rather than working with the courts or creditors directly, you will receive an appointed trustee. This trustee – usually a bankruptcy attorney – will oversee the plan and your efforts to pay off the debt. The trustee will take your payments and ensure they are properly disbursed to your remaining creditors. A trustee also handles various other administrative matters overseeing the Chapter 13 plan until the case is concluded.
IX. Will a Chapter 13 bankruptcy change my life?
While some changes will occur, there will be fewer changes than you might expect, although you will have to make some adjustments. Of course, you will be required to make room in your budget for your monthly payments, which would potentially impact your lifestyle. In addition, you will be expected to keep your financial paperwork and bookkeeping in good order. Your trustee will have the court’s authority to audit your finances, should they ever have cause to believe discrepancies exist in your reporting. Also, filing a Chapter 13 bankruptcy will temporarily impact your ability to receive loans and other types of credit.
X. What happens if I cannot uphold my Chapter 13 plan?
This largely depends on the situation. In the event you are unable to continue the plan due to circumstances beyond your control – such as a medical disaster – your trustee has some power to bend the rules of the plan to accommodate. For more long-term situations, such as the loss of a job, your Chapter 13 bankruptcy attorney can petition the court to alter your Chapter 13 plan and accommodate for your hardship.
Also, it may be possible¾with the approval of the court¾to convert your bankruptcy to Chapter 7. Under Chapter 7, non-essential assets are liquidated. Liquidation of assets can often provide enough additional funding to maintain the overall terms of the bankruptcy.
Contact Alfred Abel Law Offices to Speak to a Chapter 13 Bankruptcy Attorney in Philadelphia
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. If you are interested in filing for Chapter 13 bankruptcy or want to learn more about your options, contact our law firm today at 215.517.8300 or 610.940.1635.