Texas Chapter 13 Bankruptcy Lawyer
Divorce, unexpected medical bills, job layoff, and rising mortgage rates have saddled many people with financial difficulties. If you are facing a stressful financial crisis, you are not alone. In recent times, many people have resorted to various types of bankruptcy as an acceptable method of regaining solvency.
Chapter 13 bankruptcy is known as “reorganization” or “rehabilitation” bankruptcy and is based on a proposed payment plan for debt discharge. Unlike Chapter 7 bankruptcy where assets are liquidated to pay off debt, Chapter 13 reorganizes finances when individuals or sole proprietors experience serious short-term financial trouble. As long as a stable future income is projected, all or a portion of the debt is paid off over a three– or five–year period under an approved payment plan.
Some common reasons for filing Chapter 13 bankruptcy:
The following guidelines regarding debt regulate your eligibility for chapter 13 bankruptcy:
The IRS determines acceptable monthly expenses based on what it considers to be reasonable, bare necessities, such as food, shelter, utilities, etc. Disposable income is the amount remaining after these basic monthly expenses are paid. Under a court-approved payment plan, creditors are paid out of disposable income.
Claims are classified into three categories:
To begin Chapter 13 bankruptcy proceedings, your bankruptcy lawyer will file a petition. Upon filing, an automatic stay goes into effect, which stops creditors from most attempts to collect on your debts.
Along with the petition, your bankruptcy lawyer will file the following:
The bankruptcy court will appoint a trustee to manage your case. Within 15 days of filing the petition, you must file a proposed plan that details how creditors will be paid in fixed payments over a three– or five–year period (depending on which time period applies to you). The trustee will review and evaluate your plan. A creditors’ meeting will be held 20–50 days after the petition is filed. At that meeting, you must answer any questions posed by creditors regarding your finances or the terms of the proposed payment plan. Creditors may object to anything about the plan they find unreasonable.
Within 45 days after the creditors’ meeting, the judge will hold a confirmation hearing and decide whether the proposed plan is feasible and proper under the Bankruptcy Code. If approved by the judge, the plan will limit the debt collection efforts of your creditors. The trustee receives your monthly payments and disburses funds to the creditors as outlined in the plan. When the plan is completed, your unpaid debt is discharged.
For more detailed information regarding Chapter 13 bankruptcy see U.S. Courts, Bankruptcy Basics, Chapter 13.
At the Irving Law Office of Areya Holder, P.C., we offer a free initial consultation to help you explore the possibility of filing a Chapter 13 bankruptcy. We understand how hopeless it feels when strapped with debt, but we have helped many people overcome financial dilemmas that seemed insurmountable. Through bankruptcy, hope is available for a better financial future.
Allow us to put our legal expertise to work for you. Contact us online, or call our office at (972) 438–8800 today.