Chapter 13 Bankruptcy

Over Your Head in Debt?
Consider Chapter 13 Bankruptcy

Bankruptcy is a big step with a number of implications, but it can give you the breathing room you need to regain your financial footing. Chapter 13 bankruptcy is an option typically available to those who whose incomes are more than Nevada’s median income. Unlike Chapter 7 bankruptcy, which discharges debts and wipes the slate clean, Chapter 13 bankruptcy structures a repayment plan for your debts.

Chapter 13 conveys a number of benefits:

  • Once you file for Chapter 13 bankruptcy, you’re protected from being hounded by debt collectors
  • Unlike with Chapter 7, you don’t need to sell your assets
  • You can keep your home and your vehicle – even if you are behind on payments
  • Your repayment plan, which lasts for three or five years, is based on your income
  • Repayment plan payments are interest-free
  • You make a single monthly payment to your bankruptcy Trustee, who in turn pays creditors
  • At the end of your repayment term, any remaining balances are zeroed out

Is Chapter 13 Bankruptcy the Right Option for me?

Chapter 13 bankruptcy may be the right option for you if:

  • You need to prevent the foreclosure on your home or the repossession of your vehicle
  • You are subjected to wage garnishments or lawsuits by creditors
  • You’re underwater in your first mortgage and have a second or third mortgage
  • Your income exceeds the limits for a Chapter 7 bankruptcy
  • You have certain debts – unpaid income taxes, student loans, or child support – that can’t be discharged under Chapter 7 but can be repaid over three or five years without interest
  • You have a co-signer on a personal debt who would be forced to pay the debt under Chapter 7 but not if you meet your payment plan obligations under Chapter 13

The Means Test

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This law mandates that the income of those who file for Chapter 7 be at or below their state’s median income. This is called the “means test.” If your income is above Nevada’s median income, you’re required to file Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. During your initial consultation, Krieger Law Group’s experienced bankruptcy attorney will determine if you’re eligible to file under Chapter 7, or if you’re required to file under Chapter 13.

How Long Does Chapter 13 Bankruptcy Take?

BAPCPA requires that you participate in credit counseling before you file for bankruptcy and that you attend a class in financial management. The Bankruptcy Court has a timeline that it follows. Once you file a petition for Chapter 13 bankruptcy, your case Trustee calls a meeting of creditors that’s held in three to seven weeks. In the meantime, you must file a repayment plan within two weeks and make your first payment a month after you file.

Following the meeting of creditors, the court holds a repayment plan hearing within six weeks. Once the court approves the plan, you continue making payments to your case Trustee. Depending on your income, you make payments for either three or five years, after which time any remaining eligible debts are discharged.

How Much Does Chapter 13 Bankruptcy Cost?

Attorney fees vary based on the complexity of your case. Most attorney fees can be paid as part of your interest-free Chapter 13 repayment plan. Typically, a bankruptcy attorney’s fee is a very small percentage of your total debt.

Krieger Law Group Can Help

Bankruptcy proceedings are extremely complex. While it’s theoretically possible to do it yourself, even bankruptcy courts recommend obtaining the services of a bankruptcy attorney. That’s where we can help. Krieger Law Group’s experienced bankruptcy attorneys will guide you every step of the way. You deserve to have a smooth bankruptcy proceeding and a fresh start. You deserve to have Krieger Law Group by your side. Call us today for your free case evaluation.

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