Chapter 13 Bankruptcy Overview
Chapter 13 bankruptcy is a repayment plan of your debts, rather than eliminating unsecured debts. It requires customized financial planning with your attorney and the Trustee who has to make sure you can make the scheduled payments.
Why file a Chapter 13?
First, if you make more than the median income in Nevada you will probably have to file for Chapter 13 instead of Chapter 7. Second, Chapter 13 does not make you surrender property, meaning you can keep multiple homes. Third, Chapter 13 provides for the “strip off” of second mortgages, or even pushing down other loans on investment properties. Fourth, there are some debts like unpaid taxes, alimony or child support which cannot be discharged under Chapter 7 which may make Chapter 13 your best choice. Chapter 13 reorganization allows you to pay your debts back over a period of several years, and usually significantly reduces the total debt.
One of the benefits of the Chapter 13 is that it can be modified after you begin; if after starting a Chapter 13 payment plan if your personal circumstances change, you can either ask for modification of the payment amounts or convert to a Chapter 7 bankruptcy. We create the plan under a controlled format and normally you only have to get approval from the appointed Trustee before confirmation of the plan, rather than a creditor committee like in a Chapter 11.
To schedule a free bankruptcy consultation with Ryan call (702) 868-3311 right now.
Chapter 13 Fast Facts
- Chapter 13 is a repayment plan that usually lasts 5 years.
- Chapter 13 stops garnishments and foreclosures like other chapters.
- We compose a plan that will pay back some or all of your debt; the amount of the payment is determined by your “Disposable Monthly Income” using IRS living standard amounts for Nevada.
- We propose to pay your unsecured creditors only a portion of the debt you owe them, unless your income is enough to pay it all within 60 months.
- Your first payment is due 30 days after we file your petition to start the case in court.
- We have 15 days after filing the petition to propose a plan.
- 30-45 days after filing there is a Meeting of Creditors or “341 Hearing” – it is very rare that creditors appear, usually it is just with the Trustee’s office attorney and staff. You are expected to have made the first payment to your plan before the hearing, even if the amount to be paid in the plan changes later.
- The 341 Hearing in a Chapter 13 usually lasts 5-15 minutes.
- The confirmation hearing is usually 2-3 months after filing.
- The plan can be modified after we file it.
- The plan has to be feasible – you have to show the Trustee that you can make the payments proposed.
What to Bring to Your Consultation