Chapter 13 Bankruptcy Attorney in Victorville CA
After determining that Chapter 13 is the right form of bankruptcy for your situation, completing mandatory credit counseling, and filing all necessary paperwork with the bankruptcy court, there are additional steps for you and your lawyer to undertake. These include:
- Filing the plan: In Chapter 13, a repayment plan must be filed with the court. This plan must meet certain requirements and our attorneys help design a plan that will meet your needs. Chapter 13 plans typically proceed for three to five years.
- Plan and confirmation hearing: After meeting with the trustee, the court will hold a hearing on the confirmation of the debtor’s plan. Once the plan is confirmed, the debtor will have to begin making the payments outlined in the plan.
- Making the plan payments: The monthly Chapter 13 payments begin 30 days after the case is filed and continue until the plan has been completed.
Once all of the required payments are made under the plan, the trustee will begin to process the debtor’s discharge. The discharge means that those creditors subject to the order have been satisfied, and they cannot contact the debtor ever again as those debts have been “wiped out.”
A Chapter 13 is most often used to save a home from foreclosure by repaying arrearages over three to five years. It is also used to repay credit cards or other unsecured debts by debtors who make too much money to file a Chapter 7.
Please call the Hedtke Law Firm at 760 482-1737 to schedule a free consultation.
The Bankruptcy Court Does Not Create a Budget for You
Chapter 13 requires the debtor to propose a budget for approval by the Chapter 13 Trustee. As your attorneys, we will spend a great deal of time with you discussing your budget, and preparing the budget schedules that will be filed in your Chapter 13 case. You can expect your chapter 13 trustee to look at your schedules of income and expenses and to object if the trustee believes that you are spending money unreasonably.
If the chapter 13 trustee and/or your creditors object to your monthly spending habits, they are permitted to file an objection to the confirmation of your chapter 13 plan. Usually, we can negotiate a compromise by adjusting your budget and reducing some of your monthly expenditures.
The bankruptcy court does look at the budget categories created by the IRS for use in tax repayment plans. Despite what you may have been told, you are not required to adopt the IRS budget. Instead, the IRS numbers are used as part of a “means test” analysis to determine whether you qualify for Chapter 7 or Chapter 13. Assuming that the means test analysis shows that you have to file a Chapter 13, the “reasonableness” standard applies.
Chapter 13 Budgets Must be Reasonable
As you might imagine, however, your budget cannot be exorbitant. Issues that sometimes come up include private school tuition, timeshare and expenses, boat ownership and maintenance, support of a sibling or parent, and repayments of 401(k) loans. Creating a budget in Chapter 13 is more of an art than a science, and we cannot always predict which budget entries will generate an objection.
If budget objections are filed, you can rest assured that Hedtke Law Firm will represent your interests zealously and we will fight for approval of a budget that is livable and reasonable in your Chapter 13 case.
Please call the Hedtke Law Firm at 760 482-1737 to schedule a free consultation.
Chapter 13 bankruptcy is the form of bankruptcy where there is a monthly payment to a trustee. The payment plan lasts 36-60 months.
When your income is too high to qualify for Chapter 7 bankruptcy, or if you’ve got property that you can’t protect in a Chapter 7, then you may want to look into Chapter 13 as a way to reorganize your debts and regain control.
If you qualify for a Chapter 13 bankruptcy, you can consolidate all your medical bills, credit cards and personal loans into one payment as low as $200 per month, depending on a few factors.
Although there are several factors used to determine the amount of the plan payment, the general concept of a Chapter 13 plan payment is that you only have to pay as much as you can afford.
A Chapter 13 bankruptcy may be for you if:
Your home is facing foreclosure, and you CAN afford the monthly payment, but you CANNOT afford to catch up on the missed payments or the back payments.
You need more time to get caught up on your vehicle loan.
You have too much income to qualify for a Chapter 7 bankruptcy.
You made too many charges, balance transfers or cash advances on your credit cards in the previous six to twelve months.
You have non-exempt property you would lose in a Chapter 7 case.
What Should You Do?
If your credit is damaged and you can’t pay all of your bills, then your credit worthiness is declining with each passing month of unpaid bills.
However, if you believe there is a chance you can get debt free on your own, then you need to “rise above the tree line” to see if you can go all the way down that road.
You’ll never know which solution is best for your situation until you talk with someone that understands the Chapter 13 bankruptcy process.
Take the first step in getting your questions answered by calling us to schedule a free, no-obligation consultation.