Bankruptcy Chapter 13 Attorney in Long Island
Chapter 13 bankruptcy, also known as “a wage earner’s plan,” is a type of bankruptcy where a debtor undertakes a reorganization of their finances under the supervision and approval of the federal government. One of the most attractive aspects of Chapter 13 bankruptcy is that the repayment plan provides “regular” income individuals with an opportunity to develop a plan to restructure their debt while retaining all of their property. A chapter 13 requires a debtor to propose a plan of reorganization that lasts between three (3) years and five (5) years. During this repayment plan period, creditors are prohibited from starting or continuing collection attempts, as well as prohibiting enforcement of existing judgments.
Continue reading if you would like to learn more about Chapter 13 bankruptcy, its advantages, disadvantages, and whether you are eligible to petition for Chapter 13 bankruptcy. While bankruptcy is an effective means that can get you the financial help you need, we at Macco Law Group, LLP understand that this is a daunting and complicated process. Our experienced bankruptcy lawyers are here to listen to your wants and needs, identify all of your potential options, guide you through the bankruptcy process, and most importantly, offer you peace of mind amid these challenging times. Reclaim your financial future today and contact us for your free and confidential consultation.
How Does Chapter 13 Bankruptcy Work?
When debt begins to pile up, you are generally left with two types of bankruptcy: Chapter 7 or Chapter 13 bankruptcy. Often, people will seek to qualify for a chapter 7, as it requires no plan to repay debts. However, in certain situations, particularly those where an individual has high regular monthly incomes or valuable non-exempt assets, Chapter 13 provides the only route to eliminating your debt. While chapter 13 debtors are required to propose a repayment plan, the amount a debtor repays is based on several factors, including monthly income and expenses, and non-exempt assets. Although some cases require a one (100%) percent payment of a debtor’s debts, most plans are structured to pay substantially less. Regardless of the distribution percent, a chapter 13 plan permits a debtor to make the payments interest free over an extended period of time.
In a Chapter 13 bankruptcy case, you will be required to compile an exhaustive list of all assets, liabilities, income, expenses, and other information regarding your financial wherewithal. Most important for a chapter 13 plan is a determination of your monthly expenses, such as:
- Home expenses. Home expenses entail the cost of housing. This may come in the form of rent or mortgage payment. However, it may also include homeowners association fees, real estate taxes, and homeowners or renters insurance. Fees for utilities are also part of this category.
- Child-related expenses. This includes all expenditures related to the care and education of the child, such as babysitters, daycare, after school activities, tutoring services, school uniforms, school supplies, textbooks, personal computers, school tuition, and before and aftercare services.
- Transportation expenses. The costs associated with leasing or buying a car, commuting costs to work, and other transportation services used by members of the household to commute, including public transportation. Additionally, monthly expenses for gas, vehicle maintenance, and vehicle insurance.
- Entertainment expenses. Entertainment expenses refer to costs of entertainment purchases for the household, such as subscription television services or tickets to a professional sporting event.
Enlisting the help of a well-versed bankruptcy lawyer can be extremely advantageous. Filing the seemingly endless required bankruptcy documents is a formidable task. By having a trusted bankruptcy attorney by your side, you can feel assured that these crucial documents are correctly completed and submitted by the appropriate dates, absent of preventable mistakes. Moreover, your bankruptcy attorney will advise you before drafting and submitting a proposal to repay your debts that address your financial needs and goals. Hiring an attorney who specializes in bankruptcy to help you petition for Chapter 13 bankruptcy protection can save you the headache and any unnecessary mishaps.
Once you have submitted the necessary information, your attorney and you will create a chapter 13 plan of reorganization you can maintain. After filing a bankruptcy, a chapter 13 trustee will be appointed by the Court. The trustee will review your assets, income, and expenses and determine whether such plan complies with the requirements of the Bankruptcy Code.
A chapter 13 plan eliminates the challenges of managing multiple payments to multiple creditors. Instead, the debtor needs only to make one payment to the trustee, which the trustee then distributes to the debtor’s creditors. Through the repayment plan’s streamlined process and Chapter 13 bankruptcy protection, the debtor need not come into direct contact with creditors. A debtor can rest assured knowing that the provisions of chapter 13 are set up by the federal government, including the appointment of their chapter 13 trustee, avoiding potential scams from fly-by-night debt consolidation or debt negotiation companies.
Who Is Eligible For Chapter 13 Bankruptcy?
To be eligible to file for Chapter 13 bankruptcy, there are several requirements that you must first meet. These requirements include:
- Having a regular income. You must prove that you possess a consistent income sufficient to make pay your monthly expenses and fund your chapter 13 plan of reorganization. If your income is irregular or too low, your proposed repayment plan will not be approved by the court.
- Having unsecured debts totaled under $419,275. Unsecured debts are debts that are not backed by collateral, such as a vehicle or home. Examples of unsecured debts include credit cards, medical bills, and student loans.
- Having secured debts totaled under $1,257,850. Secured debts include loans where you have pledged a tangible asset as collateral. These include car payments and mortgage payments.
With all of the components needed to carry out a successful Chapter 13 repayment plan, it is vital that you have a well-versed and experienced bankruptcy lawyer standing by your side. At Macco Law Group, LLP, we are committed to serving Long Island and the New York metropolitan area with the best bankruptcy counseling available. Contact us today for your free and confidential consultation. Together, we can get you back on the road to financial freedom.