why would an attorney have you file bankruptcy 13 instead of chapter 7

You may like to file Chapter 13 instead of a Chapter 7 bankruptcy

, if you're behind on your mortgage payments and you're trying to save your home. Chapter 7 does not give you the opportunity to catch up mortgage payments or otherwise save your house. A Chapter 13 would be the appropriate chapter to file for that.

Full Answer

Should I file Chapter 7 or Chapter 13 bankruptcy?

Jan 15, 2014 · A co-debtor’s obligation to repay on a debt he or she shares with you is not eliminated when you file for Chapter 7 bankruptcy. However, in Chapter 13 bankruptcy, this debt will be eliminated for both of you as long as you make your Chapter 13 monthly plan payments. Are You Behind on Your Mortgage or Car? When you are behind on your mortgage or car …

Do you need a lawyer to file Chapter 13?

Jan 09, 2018 · Because a lot can happen in three to five years – sickness, divorce, getting laid off – Chapter 13 bankruptcy has a high failure rate. The repayment will tighten your budget. It’s more complicated than Chapter 7, so you’ll need to hire a bankruptcy attorney, which will cost somewhere between $3,500 and $5,000.

What happens if my Chapter 13 bankruptcy is unsuccessful?

Mar 17, 2021 · If a person has debts that would not be discharged in a Chapter 7 bankruptcy and would risk losing valuable property, e.g. a house, then a Chapter 13 bankruptcy might be the better option. If a person successfully pays back creditors in a Chapter 13 bankruptcy per the plan agreed to, then some of the person’s debts might be discharged as in a Chapter 7 bankruptcy.

What is Chapter 7 bankruptcy and how does it work?

Apr 25, 2022 · Unlike Chapter 7, Chapter 13 requires you to pay off your debts through a payment plan created by the bankruptcy trustee. Chapter 13 is a reorganization bankruptcy since the payment plan rearranges your debts. Note that there is a limit to how much debt you can have to qualify for Chapter 13.

What are the advantages of filing bankruptcy under Chapter 13 instead of Chapter 7?

Which is worse filing Chapter 7 or 13?

Which is better bankruptcy Chapter 7 or 13?

What is a big difference between Chapter 7 and Chapter 13?

How long does a Chapter 13 stay on your credit?

What is the difference between Chapter 7 11 and 13 bankruptcies?

What Cannot be discharged in Chapter 7 bankruptcy?

Which bankruptcy wipes out all debt?

Which of the following types of debts would be discharged with Chapter 7 bankruptcy?

What are the benefits of filing Chapter 13?

What does bankruptcies do to your credit?

What happens when my Chapter 13 is paid off?

When Should I File under Chapter 7 Instead of Chapter 13?

A person should file a Chapter 7 if the following circumstances apply:

What Are the Requirements to File Chapter 7 Bankruptcy?

In order to file for bankruptcy under Chapter 7, a person must meet the following requirements:

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows a person to restructure their finances and pay off creditors. Most of their debts will not be cancelled; instead, the person is allowed to obtain a repayment plan that reflects their financial situation. This may be favorable for people who are beginning to recover financially from a period of financial hardship, e.g.

Chapter 7 vs. Chapter 13 Bankruptcy

Chapter 7 bankruptcy allows a person to have most of their debts discharged or cancelled. Chapter 7 is often called “liquidation” bankruptcy. A debtor is not required to pay back debts that are discharged.

Can I Switch to a Different Kind of Bankruptcy after Filing?

It may be possible for a person to switch to a different kind of bankruptcy claim after they have filed. In fact, courts may require a person to switch from one kind of bankruptcy chapter to another. This is known as “forced conversion” and may occur at the discretion of the bankruptcy judge.

Do I Need a Lawyer for Help with a Bankruptcy Proceeding?

Filing for bankruptcy can be a challenging task. It is in your best interest to hire an experienced bankruptcy lawyer to help you. Your lawyer can explain the differences between Chapter 7 and Chapter 13 bankruptcy. An experienced bankruptcy lawyer can help you determine which approach would work best for you.

What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy allows you to construct a payment plan where your debts are paid down in line with what you can afford according to your income. Plus, you won’t have to worry about interest rates going up or being hit with extra penalties or fees.

Why won't the court sell my house in Chapter 13?

In Chapter 13 bankruptcy, the court won’t sell any of your assets because you’ll use current income to pay off your debts. So if you own a home that you would like to keep or if you have other items you don’t want sold, Chapter 13 is probably a better choice.

Can I file for bankruptcy under Chapter 7?

Anyone can submit a bankruptcy petition (i.e. your “application”) for either Chapter 7 or Chapter 13 bankruptcy. However, the court does not have to accept your petition if the trustee determines that you should be filing for the other type of bankruptcy, or if you do not qualify to declare bankruptcy at all. ...

Can you file for bankruptcy with little income?

That said, most people who qualify to file for Chapter 7 don’t really have much in the way of assets, ...

Can student loans be forgiven in bankruptcy?

Also, there are certain debts, such as alimony, child support, and student loans, that can’t be forgiven regardless of what type of bankruptcy you file.

Can you declare bankruptcy if you have art?

For example, if you have a valuable collection of art, you probably won’t be able to declare Chapter 13 bankruptcy and keep it. This is because under Chapter 7, your collection would be sold and your creditors repaid.

What is Chapter 13 bankruptcy?

Chapter 13 benefits people with significant income, which is why it’s sometimes known as the wage-earner bankruptcy chapter . By contrast, Chapter 7 works well for people who don’t make enough to repay their creditors.

How long does Chapter 13 pay?

One of the benefits of Chapter 13 is the ability to reduce how much you pay on certain property. Better yet, you’ll pay the reduced amount over three to five years.

Can you protect your property in bankruptcy?

All filers can exempt (protect) some property when filing for bankruptcy, but not everything. Nonexempt property—property you can’t protect—typically includes luxury items, such as a vacation home, a boat, or the RV you plan to use when visiting the Grand Canyon this summer.

Can you file Chapter 13 if you are behind on your mortgage?

Chapter 7 won’t help you if the payments aren’t current before filing.

What happens if you file for bankruptcy in Chapter 7?

When you file for Chapter 7 bankruptcy, you get to keep only exempt property—prop erty protected from creditors under state or federal law. You have to give your nonexempt property to the bankruptcy trustee, who can sell it and distribute the proceeds to your creditors. (Learn more about bankruptcy exemptions .) In Chapter 13 bankruptcy, you don't have to give up any property. Instead, you repay your debts out of your income. But that doesn't mean that you get to keep more property than you would have had you filed for Chapter 7 bankruptcy. All filers can protect (exempt) the same amount of assets. Here's the difference: Only the Chapter 7 trustee sells nonexempt assets. In Chapter 13 bankruptcy you must pay for the value of the nonexempt assets you keep through your three- to five-year repayment plan. So, if you have nonexempt property that you can't bear to part with, Chapter 13 bankruptcy might be the better choice—if you can afford to pay for your nonexempt assets in addition to other required payment amounts.

What is the difference between Chapter 7 and Chapter 13?

Here's the difference: Only the Chapter 7 trustee sells nonexempt assets. In Chapter 13 bankruptcy you must pay for the value of the nonexempt assets you keep through your three- to five-year repayment plan.

What happens to your property when you file for bankruptcy?

Keep Property You'd Lose in Chapter 7 Bankruptcy. When you file for Chapter 7 bankruptcy, you get to keep only exempt property—property protected from creditors under state or federal law. You have to give your nonexempt property to the bankruptcy trustee, who can sell it and distribute the proceeds to your creditors.

What happens to a codebtor in Chapter 13?

By contrast, if you file for Chapter 13 bankruptcy, the creditor will leave your codebtor alone, as long as you keep up with your bankruptcy plan payments. (Learn more about what happens to codebtors in bankruptcy .)

How long can you stay in bankruptcy?

Depending on the number of times you've filed during the previous year, the stay could be limited to 30 days (you filed one other matter) or might not apply at all (you filed two or more cases).

What is the means test for Chapter 13 bankruptcy?

These calculations are referred to as the "means test.".

Does bankruptcy erase stimulus checks?

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, and courts continue to hold 341 creditor meetings telephonically or by video appearance unless an in-person meeting is necessary—see the U.S. Trustee's 341 meeting status webpage for details.

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.

Why do people 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.

What is Upsolve for bankruptcy?

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Why is Chapter 13 dismissed?

That’s because the interest on your unpaid debts has continued to mount as you’ve struggled to make payments.

How long does it take to get discharged from Chapter 13?

Why do roughly 2 out of every 3 Chapter 13 cases fail? Well, to get a discharge of your debts, you need to complete a 3-5 year repayment plan. And most plans are 5 years long. Only at the end of the plan will the remainder of some debts be forgiven.

What is the argument in favor of Chapter 13?

Another argument made in favor of Chapter 13 is that it teaches you to live within a budget.

What is the failure rate of Chapter 13?

1. Chapter 13 Has a Failure Rate of 67%

What is the benefit of Chapter 13 bankruptcy?

One powerful benefit offered by Chapter 13 bankruptcy but not Chapter 7 is the ability to remove unsecured junior liens (such as your second mortgage) from your house in a process known as lien stripping.

How long does it take to pay back debt in Chapter 13?

You'll pay back a certain amount of your debts through a three to five-year plan. The Chapter 13 bankruptcy trustee distributes the money to your creditors according to the plan terms. That doesn't mean that you have to pay back all of your debts. The amount you'll pay will depend on your income, expenses, assets, and debt type.

What does it mean to fail Chapter 7?

Failing the Chapter 7 means test —the test that qualifies you for Chapter 7—tells the court that you have sufficient income to repay at least some of your debts through a repayment plan. That's what you'll do in Chapter 13 bankruptcy. You'll pay back a certain amount of your debts through a three to five-year plan.

What is disposable income in bankruptcy?

disposable income—the amount left after deducting necessary expenses. priority debts —obligations you must pay in full, such as recently-incurred taxes, or. nonexempt assets—property you can't protect with a bankruptcy exemption. Find out more about what happens in Chapter 13 bankruptcy.

Can you file for Chapter 13 without income?

A filer without sufficient income to cover the current payment, the missed payments, and other required Chapter 13 obligations, won't get repayment plan court approval (confirmation). It's likey that the filer would need to let the home go back to the bank to proceed with Chapter 13. Some courts offer loan modification assistance. You should be able to learn more by consulting a local bankruptcy attorney.

Can you file Chapter 13 in Chapter 7?

Although most people don't want to pay into a three- to five-year repayment plan, Chapter 13 offers many benefits not available in Chapter 7. So even if you make too much to qualify for Chapter 7, filing Chapter 13 might be the right choice. For instance, in Chapter 13, you can: keep all of your property. catch up on missed mortgage or car payments.

Does Chapter 13 pay off debt?

Chapter 13 Repayment Plans Help You Pay Off Nondischargeable Debts. Bankruptcy doesn't discharge (wipe out) certain types of debts, called nondischargeable debts. In Chapter 13, debtors can pay off a nondischargeable debt over time without fear of collection actions such as a wage garnishment or loss of property.

How many forms are required for Chapter 13?

Chapter 13 debtors must file either one or two forms that together determine the duration and available income for a Chapter 13 repayment plan.

What form do you file for Chapter 13?

The first form is the Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period, Official Form B122C-1 .

Can you include your car payment in your bankruptcy?

It is possible to include your entire car payment in the plan and even adjust your interest rate or the amount of the principal you will repay if your car loan was at least 2 ½ years old when you filed the bankruptcy case. 6 7

Do you have to pay a debtor through a conduit?

In some districts, known as conduit jurisdictions, debtors are required to make their entire house payment through a Chapter 13 trustee, not just an amount to cover arrearages. Conduit payments permit trustees to maintain accurate recordkeeping and better oversight of the debtor’s progress and adherence to the Chapter 13 plan. 5