If you’re facing a mountain of debts, filing for bankruptcy may be an effective way to regain your financial footing. And while some Utah debtors opt to file for Chapter 7 bankruptcy, many are better off filing for Chapter 13 instead. At the Law Office of Davis & Jones, P.C., our legal team has decades of experience with both Chapter 7 and Chapter 13 bankruptcy filings. We’ve been helping people in the greater Salt Lake City area, along the Wasatch Front and throughout the surrounding Utah counties since 1995, and now even in St. George! We can determine your best approach to debt relief. Our seasoned Utah bankruptcy lawyers offer free consultations. Talking to a legal professional gives you a chance to get answers to your questions and develop a road map to get you to financial freedom. Contact our Salt Lake City or St. George office today to schedule an appointment. In the meantime, read on to learn the basics on Chapter 13 bankruptcy.
Reasons to Consider Chapter 13 Bankruptcy
After filing for Chapter 13 bankruptcy, also referred to as a reorganization bankruptcy or debt consolidation, individuals are protected from creditor collection efforts – and they enjoy this protection for the duration of the three-to-five year repayment plan. At the plan’s completion, any eligible debt that remains is discharged.
You can file Chapter 13 even if you’ve had a previous Chapter 7 or 13 bankruptcy filing.
Chapter 13 bankruptcy may be the right choice for you for several reasons. By filing, you may be able to:
- Save your home from foreclosure
- Eliminate your second mortgage
- Save your car or truck from repossession
- Change the terms and reduce the payment on your car loan
- Stop wage garnishment
- Reduce or eliminate IRS tax liens
- Reorganize back child support or alimony payments
- Keep assets that are unprotected in Chapter 7 bankruptcy
- Discharge debts that would remain after a Chapter 7 filing
- Protect your loan cosigners from collections
Eligibility Requirements for Chapter 13 Bankruptcy
To qualify for Chapter 13, debtors must have a regular source of income. That income could come from a job, social security, or any other regular income source. With a reorganization bankruptcy, monthly payments are made to a court trustee. Missing payments could result in the case being dismissed. Therefore, individuals who want to file for Chapter 13 need to be able to demonstrate that they have the financial means to make the plan work. A good attorney can help you put together a payment plan that is realistic and fits your
budget.
Eligibility is also based upon the type and amount of debts owed. To qualify for protection under Chapter 13 of the U.S. Bankruptcy Code, individuals can have no more than $394,725 in unsecured debt, which
includes past-due medical bills, utility bills, credit card bills and personal loans. In addition, their mortgage, car loan and other secured debts can’t amount to more than $1,184,200. These amounts adjust periodically, but experienced bankruptcy lawyers will have the current debt limits.
The Process of Filing for Chapter 13 Bankruptcy
Navigating the reorganization bankruptcy process can be quite challenging without competent legal assistance. For that reason, most people who opt for this approach to debt relief engage the services of a qualified local bankruptcy lawyer.
Before you meet with a legal professional, however, you may want to know the basics of how your bankruptcy case might proceed. The steps in a Chapter 13 filing include:
- Completion of a short, on-line credit counseling course
- Preparation of the petition, schedules and forms
- Filing the bankruptcy claim with the Utah Bankruptcy Court
- Case review by an appointed court trustee
- Attending the meeting of creditors
- Attending a confirmation hearing
- Objecting to filed proofs of claim if necessary
- Compliance with the plan through regular monthly payments
- Completion of an on-line debtor education course
- Discharge from the Utah bankruptcy court
The Chapter 13 Bankruptcy Repayment Plan
The amount to be repaid under a Chapter 13 plan is determined by several factors, including the individual’s disposable income, what kind of assets are being protected, and the amount of priority debts like taxes or child support. In most Utah cases, the minimum payment could be as low as $50-$100 per month. Average payments in cases with few assets and no priority debt might be in the $150 to $250 per month rage. It’s important to remember that the payment will be based on your budget and ability to pay - not on the total amount of things like credit cards or medical debts.
The length of the repayment period can be as short as 36 months. For debtors with a disposable income that exceeds the county median, payments are generally required for a full 60 months. If payments are missed, the case can be dismissed. However, depending upon the situation, a good bankruptcy lawyer may be able to help you avoid that outcome.
During the repayment period, individuals are not able to incur additional debt without first obtaining court authorization. After filing, debtors shouldn’t apply for a new loan or credit card without first discussing their intentions with their bankruptcy lawyer.
Talk to an Experienced Utah Bankruptcy Lawyer
Is filing for Chapter 13 bankruptcy the best way to bring your financial troubles to an end? Perhaps, but no single approach to debt relief is right for everyone. To determine which route you should take, you’d be wise to consult with a trusted legal professional with expertise in personal bankruptcy filings and debt consolidation. The team of skilled bankruptcy lawyers at the Law Office of Davis & Jones, P.C., led by Lee J. Davis, has helped more than 20,000 Utah residents obtain real and effective debt relief. We have what it takes to save your home from foreclosure, prevent car repossession, stop wage garnishments and deal with the other financial issues you’re facing. Our services won’t cost you an arm and a leg. Turn to us, and you’ll find affordable bankruptcy and debt relief assistance. We’re willing to work with you to find a payment arrangement that doesn’t put a strain on your budget. A small retainer may be enough to make the creditor harassment end, and we take care to ensure our legal fees are fair. The process of filing for bankruptcy can be complex. Filling out the required forms and schedules correctly is no simple task. There are deadlines to meet as well. Any misstep can result in the dismissal of your case. Choose the Law Office of Davis & Jones, P.C., and you won’t have to worry about any of that – we’ll help manage every detail of your filing, making the bankruptcy as easy and stress-free as possible for you. We offer free consultations, we’d be happy to answer your questions, help you explore your debt relief options and offer advice on how to get the fresh financial start you need and deserve. To find out if filing for Chapter 13 bankruptcy is your best option, call our offices in Salt Lake City, Utah, or St. George or contact us online today.