Using a manageable payment plan, you can settle part of your debts while keeping your house, car, and other assets in Chapter 13 bankruptcy which is also known as reorganization bankruptcy. Through this option,your assets won’t be liquidated (or sold). However, this type of bankruptcy is not for all, and it makes one wonder, ‘Who can’t file Chapter 13 bankruptcy?
Working with a Chapter 13 bankruptcy lawyer in Paducah, KY can guide you through the bankruptcy process. When you start identifying and categorizing your obligations and assets, filing for bankruptcy can become challenging. You don’t have to handle this circumstance by yourself. Work with a lawyer who has dealt with credit counseling and other instances similar to yours instead. To learn more about how Farmer and Wright PLLC may assist you, contact us right away.
Why do I need a Paducah Chapter 13 Bankruptcy Attorney?
The first step in filing for Chapter 13 bankruptcy is becoming familiar with the bankruptcy law, the bankruptcy code, and other ideas associated with your problem under bankruptcy relief. Even though it all seems overwhelming, seeking legal advice from a Chapter 13 attorney in Paducah, KY, can be helpful.
Hiring our Kentucky bankruptcy attorneys at Farmer & Wright, PLLC is highly beneficial for the following reasons:
- Our lawyers will navigate your bankruptcy forms, and assist you with the complex procedure from filing to figuring out Kentucky bankruptcy exemptions to representation in bankruptcy court if necessary.
- Our lawyers have the knowledge and expertise you require to raise your chances of obtaining a favorable result in your Chapter 13 case. By looking into and evaluating your situation in light of current state and federal exemptions and laws, we can defend you.
- Our goal is to provide our clients with the support they need to bounce back from significant negative life experiences and continue living securely.
We offer legal aid not only in bankruptcy, but also in personal injury law, and social security disability. We assist those who are under mental, emotional, or physical stress at Farmer & Wright, PLLC. Contact us today for your free consultation.
What is Bankruptcy?
With the aid of the legal procedure known as bankruptcy, you have the option to regain control over your finances. Bankruptcy might be the best resolution for people or corporations who have accumulated more debt than they can manage, including tax obligations.
People who file for bankruptcy typically employ one of these tactics:
- Chapter 7 bankruptcy: For individual debtors, Chapter 7 is the most popular and quickest type of bankruptcy, often taking 120 to 180 days to complete. All debtors who file for Chapter 7 bankruptcy have the option to repay debt by selling assets, including real estate, to pay creditors. Medical debt, credit card debt, and personal loan debt are all types of debt that can be discharged in a Chapter 7 bankruptcy and be paid to corresponding unsecured creditors.
- Chapter 13 bankruptcy: If you don’t meet the requirements for Chapter 7 bankruptcy or want to keep non-exempt property, Chapter 13 bankruptcy may be your best alternative. But remember that Chapter 13 bankruptcy generally takes far longer than Chapter 7. This is so that you can reorganize your debt, including secured debt, into a manageable three- to five-year plan payment through Chapter 13. Any unpaid obligation is canceled when the plan expires.
- Chapter 11 bankruptcy: A Chapter 11 bankruptcy has a different time frame. While everyone concerned tries to restructure the filer’s finances, the filer frequently pays creditors less. The filer may or may not sell property to enable a realistic approach. Annually, just a few Chapter 11 bankruptcy cases are filed. Both large and small businesses require financial support from debt collectors because of the complexity, cost, and frequent filing of this type of bankruptcy. An alternative to Chapter 13 if a person’s debt is too great is Chapter 11.
It is advised that you speak with a Paducah bankruptcy attorney to ensure that you are fully aware of your alternatives.
What Benefits Do Chapter 13 Bankruptcy Offer?
Chapter 13 offers many advantages to customers over Chapter 7 liquidation, including the following:
- Chapter 13 may offer the most significant benefits when it comes to preventing home foreclosure. By filing under this clause, people can stop foreclosure actions and potentially cure past-due mortgage payments over time. While a chapter 13 plan is in place, they must still pay their mortgages when they are due.
- Another advantage of the chapter 13 bankruptcy alternative is the possibility of rescheduling and disbursing secured debts throughout the course of a plan. Primary dwelling mortgages are not covered by this benefit. This can lead to lower compensation.
- A specific Chapter 13 clause also applies to third parties that jointly and severally owe “consumer obligations” to the debtor. This clause may protect co-signers.
- The borrower makes plan payments to a chapter 13 bankruptcy trustee/chapter 13 trustee and United States trustee, who then distributes the money to creditors, making chapter 13 operate similarly to a consolidation loan. People are prohibited from speaking with creditors directly while under chapter 13 protection.
To find out more, give us a call right away. When deciding what to do next in your circumstance, lawyers at Farmer & Wright, PLLC will be delighted to assist you.
What Could Disqualify You From Filing For Chapter 13 Bankruptcy And Why?
Chapter 13 bankruptcy is a good option for certain debtors, even if not everyone qualifies for it. The following are common reasons why one is not eligible for this:
You have far too much loan.
You are ineligible for Chapter 13 bankruptcy, as stated by the United States Courts, if the sum of your secured and unsecured debt exceeds $2,750,000. When you risk losing a specific piece of property if a debt is not paid, it is referred to as a “secured debt.” Auto and home loans are the two most typical secured debts. However, a creditor like the IRS may also secure an obligation by filing a lien, also known as a notice of secured claim, on your property.
Businesses are not allowed to file for Chapter 13 bankruptcy.
The filing of a Chapter 13 bankruptcy in the name of a company, not even a sole proprietorship, is permitted. Chapter 11 bankruptcy is advised when a business needs help managing its debts.
You need to be a business owner in order to file for individual Chapter 13 bankruptcy. Your Chapter 13 bankruptcy petition may include any debts owed by your business for which you personally are responsible. Stockbrokers and commodities brokers cannot file a Chapter 13 bankruptcy case, even if they just want to discharge personal or non-business debts.
Your income taxes were not timely filed.
You must show proof that you filed your federal and state income tax returns for the four tax years prior to the bankruptcy filing date in order to file for Chapter 13 bankruptcy. If you require additional time to bring your files up to date, the court may decide to postpone the hearings. You must provide your transcripts for those four years, or your Chapter 13 lawsuit will be dismissed.
Not having enough money to spare.
You must demonstrate to the bankruptcy court that you will have enough regular income or also known as disposable income, to meet your repayment obligations after deducting certain allowable expenses and mandatory payments on secured debts (like a car loan or mortgage) in your credit report. The judge will not confirm (accept) your plan and permit you to move forward until certain obligations are fully repaid.
Some standard compensation, self-employment earnings, and even a few side jobs can be used to fund a Chapter 13 plan: fees earned from sales or other projects; retirement benefits; Social Security benefits; benefits from workers’ compensation or disability (if you are); receiving alimony or child support; even royalties; rental fees; and especially if selling real estate is your primary line of business, you can earn a lot of money.
Call Our Paducah Chapter 13 Bankruptcy Attorney Today!
Chapter 13 bankruptcy could be the first step to financial freedom if you have the aptitude and willpower to see it through. The process of filing for bankruptcy may be both emotionally taxing and technically demanding.
At Farmer and Wright, PLLC, we help our clients through both. We will work with you to create a repayment strategy that satisfies both your immediate and long-term demands. Get in touch with us right now for a private, complimentary, and free consultation. To begin your case right now, call us.