Bankruptcy Chapter 13


13chap“WHAT DO I HAVE TO DO IN ORDER TO QUALIFY FOR A CHAPTER 13?”

Our office is currently phasing out our Chapter 13 practice. Clients who are currently in the process of their Chapter 13 will continue to receive full legal support until their cases are successfully discharged by the Federal Bankruptcy courts. If you would like to have more information on Chapter 13, please read the information below. If you would like to make an appointment to discuss your options, feel free to call our office for an appointment, and we will gladly refer you to a trusted attorney who handles these kinds of cases.

First, you have to have a steady flow of income, either wages from work, pension, retirement, Social Security, child support payments, alimony, any kind of income that you get on a regular basis.  Without some kind of steady income you will have a hard time qualifying for a 13.  It is mandatory that you produce evidence of income for the last six months.  This evidence could consist of pay advices (stubs), profit and loss statements if you’re in business, a letter from the Social Security Administration if all you get is Social Security.  It is also mandatory that you provide copies of your income tax returns for the last two years.  Some debtors get contributions from family members.  These contributions are also considered income.

Second, you have to commit yourself to make monthly payments to the Bankruptcy Trustee for 3 or 5 years.  These monthly payments are determined by you and your attorney based on how much money you have left after taking care of your basic necessities, such as housing, food, clothing, transportation, etc.  The amount of the monthly payment can be low, say $80.00, $90.00, $100.00, or high, say $5,000.00 or more.  It depends on your circumstances.

Beginning on the day you file, all creditors’ attempts to collect your debts stop.  You will be protected by what is commonly known as the “automatic stay”.  This is an automatic injunction against all creditors that orders them to stop all collection attempts.  If creditors insist on trying to collect after you file your chapter 13, they can be brought to court to answer for their automatic stay violation.

If you operate a business and want to continue operating it, you’ll be allowed to do so, provided the business generates some income.  Some clients whose business are not doing well list their spouse’s income to make a plan work.  This is acceptable.

The cost of filing a Chapter 13 varies depending on your status as a consumer or as a business owner.  However, you don’t have to pay it all up front.  If yours is a consumer case, your down payment will be a small percentage of the total fee,  plus the court’s filing fee.  The balance will be paid by the Chapter 13 trustee out of your monthly payment for a period of 36 months or 60 months, depending on how long your plan  lasts.  If your case is a business case, your down payment will be slightly higher.  The balance will still be paid by the Chapter 13 trustee out of your monthly payment.

You can file a Chapter 13 individually, if your spouse does not want to join you.  Or both of you can file.

Our office is currently phasing out our Chapter 13 practice. Clients who are currently in the process of their Chapter 13 will continue to receive full legal support until their cases are successfully discharged by the Federal Bankruptcy courts. If you would like to have more information on Chapter 13, please read the information below. If you would like to make an appointment to discuss your options, feel free to call our office for an appointment, and we will gladly refer you to a trusted attorney who handles these kinds of cases.

 

Disclaimer: This website is for general information purposes only. Any information provided by this site should not be interpreted as formal legal advice, nor should the reading of any information on this site imply that a lawyer/client relationship exists.

© 2013 Salvador C. Ramirez ◆ All rights reserved