The Scottsdale bankruptcy lawyers of Ariano & Associates, PLLC understand that you will have a number of questions regarding Chapter 13 bankruptcy, and we are here to answer those questions, and help you complete the Chapter 13 bankruptcy process. We hope that the Frequently Asked Questions (FAQs) and answers below will provide you with a general understanding of Chapter 13 bankruptcy and whether or not this is the best way for you to eliminate your debt.
Can Anyone Qualify for Chapter 13 Bankruptcy?
As with most things, not every single person can seek protection of the court by filing for Chapter 13 bankruptcy. While Chapter 7 bankruptcy uses a means test to determine if your income level is low enough to qualify for Chapter 7 bankruptcy, Chapter 13 does not require the same type of test. The main factor considered when determining if someone qualifies for Chapter 13 bankruptcy is evaluating whether you have a steady source of income that will be used to repay your debt. Overall, when people do not qualify for Chapter 7 bankruptcy, they turn to Chapter 13, using a repayment plan to discharge their debt.
How Much Debt is Discharged Through Chapter 13 Bankruptcy?
The goal of filing for bankruptcy, whether it be Chapter 7 or Chapter 13, is to eliminate as much debt as possible. With Chapter 13 bankruptcy, you will have an approved repayment plan that, if followed, will eliminate all of your outstanding debt. However, it is important to remember that your income is a key factor in determining what you are able to pay back. Therefore, if you have paid off all of your priority debts, such as unpaid child support and tax debts, and you have paid off your secured debts, such as past due and late mortgage or car payments, you may not be responsible for 100% of your existing unsecured debt, which would be any credit cards or loans that are not secured by collateral. So, in the end, you may not have to pay off all of your credit card debt depending on your unique financial circumstances.
Will My Home and Car Be Protected During Chapter 13 Bankruptcy?
By filing for Chapter 13 bankruptcy, you are effectively seeking the court’s authority to stop all collection efforts from your creditors. This is called the “automatic stay.” Therefore, a creditor cannot try to foreclose on your home during the bankruptcy process, and your car cannot be repossessed during the bankruptcy process. You will be able to keep your home, and agree to make any late or past due mortgage or car payments.
What If My Income Changes During My Chapter 13 Bankruptcy?
If your income either decreases or increases during your Chapter 13 bankruptcy, you may have to adjust your current repayment plan. Further, if you have lost your job and have no other income, you will certainly need to adjust your bankruptcy plan as soon as possible. This is a very important aspect of the bankruptcy process and this should be handled by a highly experienced and skilled Arizona consumer bankruptcy attorney.
Contact the Scottsdale Bankruptcy Lawyers of Ariano & Associates, PLLC Today
If you are considering Chapter 13 bankruptcy as a way to discharge your debt, it is important that you speak with a qualified Arizona consumer bankruptcy attorney right away. At Ariano & Associates, PLLC, our skilled Scottsdale bankruptcy attorneys have the resources and dedication to help you overcome your debt, and avoid the stress of going through the bankruptcy process on your own (i.e., without the help of an attorney). With office locations throughout the state of Arizona, our bankruptcy attorneys can help you no matter where you live. We are available 24/7 to answer your questions and address your concerns.