In Missouri, a Chapter 13 bankruptcy enables a debtor to draft a debt reorganization plan that will be overseen by the federal bankruptcy court. Most frequently, Chapter 13 is used by people and families with sufficient discretionary income to pay off their obligations but are facing foreclosure, repossession, and garnishments, also known as wage garnishment.
Families with enough non-exempt property (which is often liquidated in a Chapter 7 bankruptcy) also benefit from filing under Chapter 13. Consulting with one of our Missouri bankruptcy lawyers is essential if you have overwhelming debt that can be eliminated only through Chapter 13 bankruptcy. With our assistance and effective legal services, you can assess your situation and identify the best action.
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Why Do You Need a Knowledgeable Chapter 13 Bankruptcy Attorney in Missouri?
The legal process of declaring bankruptcy can be challenging. Any client planning to file for bankruptcy needs trustworthy and knowledgeable attorneys who can guide them in making important decisions throughout the entire procedure.
- At the Doyel Law office, we care about you and your family. Bankruptcy is a terrifying thought. It can get worse if you conduct online searches. Fear and anxiety might be triggered by frightening tales of situations going downhill, and terminologies like exemptions mean testing, preferences, fraudulent transfers, and financial stress. We at Doyel Law are here to give legal advice and assist you in getting the fresh start and improved credit you deserve by guiding you throughout the process.
- We provide personalized bankruptcy and debt relief to Missouri families. There are no universal remedies because every person’s situation is different. We want to get to know you and for you to get to know us because we think that an attorney-client relationship is characterized by trust and honesty. We cannot create a plan for your financial peace without knowing your objectives and issues first.
- We make bankruptcy simple for you with our Sunset Hills attorney. We make every effort to make the procedure straightforward. There aren’t any lengthy, complicated forms for us to complete. Your case is initiated with a quick checklist of what the court requires. When you’ve finished checking off every item on your list, we’ll compile your case and have it ready for your review in just a few days.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is an option for both individuals and businesses, unlike other types of bankruptcy. Debtors are allowed to restructure or reorganize their debts to pay their debt collector what is owed to them.
Chapter 13 differs from Chapters 7 and 11. The debtor’s debts are discharged when they file for Chapter 7 bankruptcy. In other words, a debtor who files for bankruptcy is given a “new start,” and practically all of their debts are discharged. An organization that files for bankruptcy gets a debt discharge for most of its debts and a reorganization plan for its remaining debts.
Alternatively, Chapter 13 bankruptcy:
- Enables an individual to reorganize their obligations by presenting a debt repayment plan to their creditors. Typically, this strategy would last for three to five years.
- Makes the debtor give the required payments to the trustee, who then distributes the funds to the creditors as payment for the debts owed.
According to the United States Bankruptcy Code, a debt repayment plan may last up to five years. The debtor typically retains ownership of their assets, and the bankruptcy trustee will pay the creditors the agreed-upon amount.
Your monthly trustee payment will be determined by your income and the total amount owing to your creditors. Your bankruptcy case will be dismissed if you don’t make the payments outlined in the reconstruction plan.
How Does Chapter 13 Bankruptcy Work?
Here is a quick breakdown of the essential Chapter 13 bankruptcy processes to strictly follow if you are contemplating filing bankruptcy in Sunset Hills, Missouri. After going through these basic steps of filing for Chapter 13 bankruptcy, the more challenging aspects of Chapter 13, such as determining eligibility and the specifics of your Chapter 13 plan, will seem less intimidating.
1. Sign up for the credit counseling course: Before submitting a Chapter 13 bankruptcy petition in Sunset Hills, Missouri, counseling from a credit counseling organization must be completed within three months. The credit counseling course aims to help you assess if you make enough money to pay off your debts.
Most providers charge between $25 and $35 for this course, while some offer free or largely-funded credit counseling to people who perhaps cannot manage to pay for it. Those who file for Chapter 13 are not frequently given the discount.
2. Show the necessary Chapter 13 bankruptcy documents: The Chapter 13 bankruptcy filing in Sunset Hills, Missouri, triggers the start of insolvency proceedings. The trustee appointed to manage your bankruptcy case, your creditors, and you will get a letter advising you of the automatic stay prohibiting collection efforts shortly after that, which will be mailed by the bankruptcy court clerk.
The letter will provide information to creditors regarding the deadlines for submitting claims and the date, time, and location of the creditors’ 341 meeting, which is an essential hearing for all claimants.You need to pay a filing fee when submitting your bankruptcy petition and credit counseling certificate.
3. Be a part of the 341 Hearing (Meeting of the Creditors): 521 papers, including bank statements, wage stubs, tax returns, and maybe more, must be provided to the bankruptcy trustee at least five times a week before the hearing. The trustee will verify your identity at the bankruptcy hearing and interview you about your bankruptcy petition. Though they rarely do so, creditors are still welcome to attend.
4. Make payments: Your Chapter 13 monthly payments will begin a month after you file for bankruptcy, regardless of whether the court has confirmed your proposed Chapter 13 plan. Your Chapter 13 case will be finished on schedule, often in roughly five years.The bankruptcy trustee will return your funds if your plan is not approved by the court. Do not, however, expect a return of your auto loan installments. Instead, the auto loan provider will credit your account.
5. Finalize the process: The proposed Chapter 13 payment plan will be open to challenge by your creditors as well as the bankruptcy trustee. If this occurs, your bankruptcy lawyer could try to make adjustments that will please everyone.
The judge must be able to affirmatively respond to the following queries before approving your repayment plan after considering any arguments presented at the plan confirmation hearing:
- How practical is the repayment strategy? In this instance, can the individual filing for Chapter 13 bankruptcy in Sunset Hills make the required payment each month from their income?
- Was the debtor’s suggestion made in good faith? Or is the individual filing Chapter 13 bankruptcy attempting to manipulate the bankruptcy process?
- Is the strategy in compliance with bankruptcy law? Is the amount paid to creditors following the law?
Most judges give applicants multiple opportunities to fix a lousy plan before rejecting a Chapter 13 bankruptcy case.
6. Finish the confirmed plan: You must make all of your payments, be current on both alimony and child support, and complete a second course called “the debtor’s education course” before the court grants a debt discharge, eliminating the balance of your eligible debts.
Mortgages and student loan debt are the only types of debt that remain unpaid for Chapter 13 filers after receiving a bankruptcy discharge. For additional information on debts that survive Chapter 13, speak with a Doyel Law bankruptcy lawyer in Missouri.
Is Chapter 13 Bankruptcy Affordable for You?
Will Chapter 13 payments be feasible for you? For some people, it is. Although you may be able to pay far less than what you owe, your Chapter 13 plan will require you to pay up to the limit of your ability if you can.
What Will Be The Cost of a Chapter 13 Plan?
Add all your payments and divide the total by 36 or 60, depending on how many months are left in your repayment plan. That will determine how much you must pay each month.
- Priority Debts – All your priority claims, including past-due child support obligations, unpaid alimony, and current tax debt, must be fully satisfied under the Chapter 13 repayment plan.
- Secured Debts – Secured debt is debt supported by collateral, such as your car or home. You shall pay the secured debt and any overdue amounts to retain your personal property.
- Unsecured Debts – Unsecured debt includes the rest of your debts. The payment plan utilizes your disposable income—the cash you have left over after paying your priority debts, secured debt, and permitted living expenses—to settle unsecured debts like credit card debt and medical bills.
- Trustee’s Fee – As a payment to your Chapter 13 trustee, you will also be required to pay an additional 10%.
What Effect Will Filing for Chapter 13 Bankruptcy Have on Your Credit Score?
According to United States Courts, studies have shown that declaring bankruptcy will result in a credit score of between 550 and 575, but that is not the complete picture. Having a lot of debt already impacted your credit score negatively. You can regain financial stability through bankruptcy. The process of redemption is the process of bankruptcy.
Your debt-to-income ratio will improve as soon as you file for bankruptcy. Though it is not a panacea, bankruptcy is a big step in the right direction.
Consult Our Trusted Missouri Chapter 13 Bankruptcy Attorney!
In Missouri, submitting a Chapter 13 bankruptcy petition can be difficult. Our trustworthy and knowledgeable Chapter 13 bankruptcy lawyers in Sunset Hills, Missouri, can assess your situation and create a strategy that best meets your needs. In addition to accompanying you to the creditors’ meeting, we will assist you in completing all the paperwork required for your bankruptcy petition and guide you through the bankruptcy procedure.
To learn how we can assist you in making a new beginning, call Doyel Law today to schedule a case evaluation with one of our Chapter 13 bankruptcy lawyers!