why does my attorney want me to file chapter 13

One of the most popular reasons for filing for Chapter 13 is to keep one’s assets like a home or a car. “Chapter 13 is generally a ‘keep your stuff’ chapter,” says Bert Benham, a Memphis bankruptcy attorney.

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Do you need a lawyer to file Chapter 13?

Sep 18, 2019 · The most obvious reason your attorney would advise filing for a Chapter 13 bankruptcy is that you are not eligible for a discharge of debt in Chapter 7. This could be for a variety of reasons from the time between previous bankruptcy filings to having a household income that is over the Minnesota median household income.

What does a chapter 13 bankruptcy trustee need to know?

Jan 29, 2022 · I love Chapter 13 because: Debtors keep possession and control of their assets. There is no trustee tasked to sell assets. Repayment to creditors can be little or even nothing, depending on the debtor’s income and the value of their assets. Chapter 13 plans are flexible.

Is filing for Chapter 13 a bad idea?

Mar 12, 2015 · There are a variety of reasons why a person may file a chapter 13. One of the reasons a person may file a chapter 13 is he has too much disposable income to file a chapter 7. Basically, if you have disposable income at the end of every month, then you are not allowed to file chapter 7 to get rid of your debt. You need to file chapter 13.

What happens to your business interests in a chapter 13 bankruptcy?

Apr 02, 2021 · In addition to deciding whether to file, you'll also want to consider which type of bankruptcy is right for you (typically either Chapter 7, Chapter 11, or Chapter 13). Here is a list of advantages and disadvantages to consider as you decide whether Chapter 13 …

What is the downside to filing Chapter 13?

Although a Chapter 13 bankruptcy stays on your record for years, missed debt payments, defaults, repossessions, and lawsuits will also hurt your credit and may be more complicated to explain to a future lender than bankruptcy.Apr 2, 2021

Is filing Chapter 13 a good idea?

While technically any individual can file for bankruptcy on his/her or own, i.e. without an attorney, there is almost universal agreement that filing Chapter 13 without an attorney is a bad idea. A very bad idea. The attorney is an added bankruptcy cost, but not doing so may wind up costing more in the long run.Jul 20, 2021

Do you have to pay everything back in Chapter 13?

In Chapter 13 bankruptcy, you must devote all of your "disposable income" to repayment of your debts over the life of your Chapter 13 plan. Your disposable income first goes to your secured and priority creditors. Your unsecured creditors share any remaining amount.

What is the success rate of Chapter 13?

Success Rate for Chapter 13 Bankruptcy The ABI study for 2019, found that of the 283,313 cases filed under Chapter 13, only 114,624 were discharged (i.e. granted), and 168,689 were dismissed (i.e. denied). That's a success rate of just 40.4%.

What is the average credit score after Chapter 13?

The average credit score after bankruptcy is about 530, based on VantageScore data. In general, bankruptcy can cause a person's credit score to drop between 150 points and 240 points. You can check out WalletHub's credit score simulator to get a better idea of how much your score will change due to bankruptcy.Mar 25, 2021

Does Chapter 13 trustee check your bank account?

Does Chapter 13 Trustee Check Your Bank Account? Yes, it's highly likely that your appointed trustee will check both your personal bank accounts and any business-related bank accounts which you may have under your name.

Does Chapter 13 wipe out all debt?

Chapter 13 bankruptcy allows you to catch up on missed mortgage or car loan payments and restructure your debts through a repayment plan. When you complete your plan, you will receive a Chapter 13 discharge that eliminates most of your remaining debts.

How much is the average Chapter 13 payment?

The average payment for a Chapter 13 case overall is probably about $500 to $600 per month. This information, however, may not be very helpful for your particular situation. It takes into account a large number of low payment amounts where low income debtors are paying very little back.May 16, 2018

Can creditors come after you after Chapter 13?

After you complete all plan payments, any remaining qualifying balances get wiped out. Creditors can no longer come after you to collect those debts.

Can you survive Chapter 13?

In order to survive Chapter 13 bankruptcy, you need to work closely with your attorney. Your lawyer needs to have a clear picture of your finances and situation to help you successfully complete a repayment plan, so be open and honest in your meetings. Let your lawyer know if your income or expenses have changed.Oct 15, 2018

Why is Chapter 13 so hard?

Any disruption in the flow of income, like illness or job loss, will make it very difficult to keep or get back on track with a Chapter 13 repayment plan. Children are born or their needs change and marriages begin and end. ... Five years on a strict repayment plan is exhausting.

How will Chapter 13 affect my taxes?

The Chapter 13 Trustee will not complete or file your tax returns for you. ... If your tax returns have not been filed or become delinquent during the course of your Chapter 13 plan, you may lose the protection of the Bankruptcy Court as your case may be dismissed.

How long does it take to pay off a Chapter 13?

It can take up to five years for you to repay your debts under a Chapter 13 plan. While it generally takes longer for you to pay off your debts, you'll have more time to make your payments, and Chapter 13 trustees may be flexible on the terms of your payments. You may be able to stretch out your debt payments, reduce the amounts of your payments, ...

Is it hard to declare bankruptcy?

Deciding whether to declare bankruptcy is very difficult and should never be taken lightly. It affects your future credit, your reputation, and your self-image. But it can also improve your short-term quality of life considerably, as the calls and letters stop. In addition to deciding whether to file, you'll also want to consider which type ...

How long does a Chapter 13 bankruptcy stay on your credit report?

A Chapter 13 bankruptcy can remain on your credit report for up to 10 years. Although a Chapter 13 bankruptcy stays on your record for years, missed debt payments, defaults, repossessions, and lawsuits will also hurt your credit ...

Can I get a mortgage if I am bankrupt?

Bankruptcy will make it nearly impossible to get a mortgage, if you don't already have one. There are lenders who specialize in lending to "bad risks," although that is an unfair characterization to make of someone who's taken a major step to solve financial difficulties.

How often can you file for bankruptcy?

Declaring bankruptcy now can get you started sooner on rebuilding your credit. Although you can only file under Chapter 7 once every six years, you can always get a Chapter 13 plan if there's another disaster before you're entitled to file for Chapter 7.

Can you get discharged from Chapter 13?

If, however, you obtained a Chapter 13 discharge in good faith after paying at least 70% of your unsecured debts, the six- year bar doesn 't apply. Declaring bankruptcy now can get you started sooner on rebuilding your credit.

Is Chapter 13 bankruptcy bad?

Why Chapter 13 is Probably a Bad Idea. If you’re in debt due to a lost job, medical illness, or divorce, you may be considering bankruptcy. The two most common types of bankruptcy in America are Chapter 7 and Chapter 13. In Chapter 7 bankruptcy, you’re able to quickly erase your debts, but you must give up expensive assets that aren’t exempt.

Why do you file Chapter 13?

Myth: You Get to Keep Your Stuff. One of the most popular reasons for filing for Chapter 13 is to keep one’s assets like a home or a car. “Chapter 13 is generally a ‘keep your stuff’ chapter,” says Bert Benham, a Memphis bankruptcy attorney.

What happens if you file Chapter 7 bankruptcy?

In Chapter 7 bankruptcy, you’re able to quickly erase your debts, but you must give up expensive assets that aren’t exempt. In Chapter 13 bankruptcy, you’re able to keep expensive property like a house or a luxury car so long as you make monthly payments under a three-to-five year repayment plan.

How much does a lawyer charge for a Chapter 13 bankruptcy?

Attorneys charge at least $3,200 to file a Chapter 13 bankruptcy, compared to $1,5000 for a Chapter 7.

Who is Jonathan Petts?

Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and Board Chair of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in... read more about Attorney Jonathan Petts

Can you file a Chapter 13 without a lawyer?

Chapter 13 should never be filed without a lawyer. Chapter 13 cases filed with an attorney already have only a 33% success rate; that number drops to a 2.3 % success rate without a lawyer. In fact, many bankruptcy trustees will tell you they have never seen a successful Chapter 13 case where a debtor was unrepresented.

Why do people choose Chapter 13?

Another popular reason for choosing Chapter 13 is because it can often filed with “no money down.”. Unlike Chapter 7 where legal fees always must be paid up front, Chapter 13 attorney fees can be extended over the 5 year life of the plan.

What is an estate?

The Estate is comprised of all of your assets, with just a few exceptions. Generally, any real estate or vehicles you have will be a part of the Estate. Any property, real or personal, that is a part of the Estate cannot be sold or transferred unless the Court approves the transfer.

How long does a Chapter 13 bankruptcy last?

In fact, typically a Chapter 13 case must last for at least 36 months and can continue for as much as 60 months, or 5 years.

Is bankruptcy filing easy?

Filing for bankruptcy relief is comparable to filing your taxes. For some people, it can be a relatively swift and easy process, but for the majority of folks, it will take time to gather the necessary documents and information.

What to do if you are in a car wreck?

If you’re in a car wreck or you’re injured while you are in a Chapter 13 case, and you are considering filing a lawsuit to recover for your injuries, make sure you tell your bankruptcy attorney. When you’re in a Chapter 13 case, you have a duty to disclose lawsuits to the Court.

Do you have to take credit counseling before filing bankruptcy?

Every person who files bankruptcy must take a credit counseling course before the case can be filed. At Bond & Botes, we assist our clients in the process by helping them get in touch with certified credit counseling agencies. If you are filing pro se, then be aware that your case can be immediately dismissed if your file before you’ve completed a credit counseling course.

What happens if you get in a car wreck?

Suppose you are in a car wreck and your insurance company is going to be paying you the proceeds from your insurance policy to help you buy a new vehicle. Before your insurance company can do so, the Court has to enter an order directing the insurance company where to send the funds.

Can a lawyer help with bankruptcy?

A Lawyer Can Help. As always, a knowledgeable bankruptcy attorney can help you with all of these issues. The standard forms for bankruptcy have been modified in an effort to make them easier to read and understand, but bankruptcy is still a complicated area. Even other attorneys tend to avoid bankruptcy law!

What does a trustee request?

Trustees commonly request that debtors provide additional tax documents for the trustee's review. The trustee must investigate the financial affairs of the debtor, and the debtor must cooperate and turn over all financial records to the trustee.

How many years of tax returns are required for Chapter 7 bankruptcy?

In Chapter 7 bankruptcy, you'll provide the most recent federal tax return filed (possibly two). You'll turn over four years of returns in Chapter 13. Find out what happens to tax refunds in bankruptcy.

Can bankruptcy erase stimulus checks?

If you're one of the millions laid off due to COVID-19, bankruptcy can erase bills while keeping most retirement accounts intact. And you don't need to worry about losing your stimulus funds—the new bankruptcy "recovery rebate" law protects stimulus checks, tax credits, and child credits. Bankruptcy lawyers will consult with you virtually, ...

How long do you have to contribute to a Chapter 13 plan?

In a Chapter 13 bankruptcy, you must contribute all of your disposable income to the Chapter 13 plan for three to five years. It's quite likely that your income will change over this period. The trustee uses the returns to monitor your income and to determine whether your plan should be modified to include additional post-petition income not anticipated at the plan confirmation.

Do you have to provide copies of tax returns if you file bankruptcy?

If the Court, United States Trustee, your bankruptcy trustee, or another party in interest requests it, you must provide copies of any tax returns filed while your bankrup tcy is pending. This rule includes: returns which came due after the bankruptcy filing.

How long do you have to file income tax for Chapter 13?

Annual Income Tax Returns in Chapter 13. In a Chapter 13 bankruptcy, you must contribute all of your disposable income to the Chapter 13 plan for three to five years. It's quite likely that your income will change over this period.