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Chapter 13 Bankruptcy Eligibility

Bankruptcy Attorney in Rockville, Maryland

If you are struggling with debt, one of the most effective ways to find debt relief is to file for bankruptcy. Bankruptcy is a legal proceeding that helps debtors or business entities eliminate all or a part of their debts or to help them pay back a portion of what they owe. It helps people who can no longer pay their debts get a fresh start by liquidating assets or by creating a repayment plan. It is designed to give you a chance to get your finances back on track.

Among the different types of bankruptcy, Chapter 13 is considered one of the most common debt-relief options that can help reduce, restructure, or eliminate your debts.  In most cases, there are advantages to filing for Chapter 13 instead of Chapter 7. A competent Rockville bankruptcy attorney can help you understand the basics and benefits of Chapter 13 bankruptcy.

At Kurland Law Group, we have been providing legal services to individuals and companies who are going through bankruptcy for decades. You might want to file chapter 13 bankruptcy, but you don’t know where to start. Our bankruptcy law firm can help you understand the process and answer all your questions about filing for Chapter 13 bankruptcy.

Contact us now at (301) 804-0625 and schedule a free initial consultation.

 

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows you to reorganize your debts into a Chapter 13 repayment plan lasting between three to five years. This type of bankruptcy helps you eliminate a large portion of your unsecured debts. It gives you the financial freedom to restructure the remaining debts and come up with a court-approved plan to repay creditors. You would make payments to the Chapter 13 trustee, who distributes those payments to your creditors. A top-ranking bankruptcy lawyer in Maryland can help you know what Chapter 13 bankruptcy can do for you.

In Chapter 13 bankruptcy, also called a wage earner’s bankruptcy, you can save your non-exempt assets, stop the threat of immediate repossessions or foreclosures, and get on the path to financial stability. However, you must have enough income to meet the requirements of the repayment plan. The provisions of a confirmed plan are binding on the debtor and each creditor. Once the bankruptcy court has approved your proposed repayment plan, it is your responsibility to ensure that the plan is strictly followed and implemented.

To ensure the success of your bankruptcy case, it is important to maintain a sustainable income and keep up with the monthly payments. If you can stick to the terms of your repayment agreement, all your remaining dischargeable debts will be released at the end of the plan.

 

Am I Eligible for Chapter 13 Bankruptcy?

Not everyone is eligible to file for Chapter 13 bankruptcy. There are certain requirements that you need to meet before filing for this type of bankruptcy. A reliable bankruptcy attorney in Rockville can help you assess your financial situation and decide whether you qualify for Chapter 13 bankruptcy.

 

You finished the credit counseling sessions.

Before you start the bankruptcy filing process, you are required to finish credit counseling sessions from approved credit counseling agencies. You must take the course at least 180 days before filing. A certificate of completion must be submitted to the court together with the paperwork and other documents.

 

You must have a regular and sufficient monthly income.

To qualify for Chapter 13 bankruptcy, you must have a regular and sufficient monthly income to pay off your debts. The bankruptcy court will determine your ability to complete a Chapter 13 repayment plan based on your disposable income. If you don’t have a stable income, your proposed repayment plan might not be approved by the court.

 

Your debts exceed the limits

Chapter 13 bankruptcy sets a limit on the filer’s debt. The amount of your secured and unsecured debts must not exceed the debt limits. These figures may be subject to change every three years.

You have no prior bankruptcy case.

If you had a prior case dismissed within the past 180 days, you may also be ineligible to file a case under any bankruptcy chapter. Moreover, you must not have filed for Chapter 13 bankruptcy in the past two years or Chapter 7 bankruptcy in the past four years.

 

How Do I File Chapter 13 Bankruptcy?

Bankruptcy can be complex and confusing. There are bankruptcy rules that you need to follow to avoid the dismissal of your case. Therefore, it is highly advisable to consult a knowledgeable Maryland bankruptcy attorney to guide you throughout the process. Chapter 13 bankruptcy typically lasts for three to five years. 

 

Credit Counseling Requirements and Documentation

You may begin the filing process by taking the credit counseling classes and preparing the complete paperwork. You need to declare all your assets, liabilities, monthly income, living expenses, bank account information, credit card debt, loan debt, and property transactions. Proper documentation helps the bankruptcy court assess your ability to pay back your debts through a payment plan.

 

Bankruptcy Petition Filing

Once you have filed for bankruptcy, the automatic stay remains in effect. This means that creditors are prohibited from starting or continuing collection efforts against you. It stops any acts of garnishment, litigation, foreclosure, or repossession by creditors and collection agencies.

 

Submission of Repayment Plan

Within fourteen days from the filing date of the bankruptcy petition, you have to submit a proposed repayment plan to the bankruptcy court. Your plan must describe how your creditors will be repaid. You must create a strategic plan aiming for the least possible payments while keeping your property. You may start following the repayment plan within 30 days after filing the bankruptcy case, even if the court hasn’t approved it yet.

 

Appointment of Trustee and Set-Up of Creditors’ Meeting

In Chapter 13 bankruptcy, the court will assign a trustee for your case. The trustee will review your case and set up a creditors’ meeting between 21 and 50 days after you file the petition. During the meeting, you’ll answer questions about your finances and proposed repayment plan. Forty-five days after the creditors’ meeting, a confirmation hearing will take place and the judge will decide whether to approve the plan.

 

Implementation of the Repayment Plan

You must strictly follow the terms of the repayment plan for three to five years. The appointed trustee will collect the payments you make under your repayment plan and distribute them to your creditors. The bankruptcy will be discharged after the repayment plan is fulfilled.

 

What are the Advantages of Filing Chapter 13 Bankruptcy?

Depending on your current financial situation, you may benefit from Chapter 13 bankruptcy. Consulting a seasoned Rockville bankruptcy attorney can help you know the advantages of filing Chapter 13. This type of bankruptcy is generally used by debtors who want to keep secured assets, such as a home or car. If you have a stable and sufficient income and the nonexempt property you want to keep, then Chapter 13 may be a great option for you.

The main purpose of a Chapter 13 bankruptcy is to enable you to keep certain assets that would otherwise be liquidated in a Chapter 7 bankruptcy. If you are behind on mortgage payments, you’ll have the opportunity to catch up on those debts and potentially save your home from foreclosure.

You may also use Chapter 13 to catch up on missed car loan payments, pay back taxes, and keep valuable non-exempt property. If you can stick to the terms of your repayment agreement, all your remaining dischargeable debts will be released at the end of the repayment plan.

 

Contact Our Maryland Chapter 13 Bankruptcy Attorney Now!

Choosing to file a Chapter 13 bankruptcy case in Maryland can be emotionally and financially stressful. Before you file for this chapter, you have to make sure that you can keep up with your repayment plan. If you can’t, then you could lose the assets you were trying to protect.

If you’re considering it, our experienced Rockville MD bankruptcy attorneys at Kurland Law Group can help you determine if a Chapter 13 bankruptcy filing is the right option to solve your debt problems. Our bankruptcy law firm can guide you in creating an ideal repayment plan that you would be able to afford. We will help you learn about Chapter 13 bankruptcy and other debt-relief options that will allow you to achieve financial freedom.

Contact us now at (301) 804-0625 and schedule a free initial consultation.

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