When your monthly bills become overwhelming, you might be thinking about talking with a Chapter 7 or Chapter 13 bankruptcy lawyer Las Vegas, NV has to offer. Many people initially think they will be able to eliminate all of their debt through Chapter 7. However, with this type of bankruptcy, a Means Test must be passed. If you don’t meet these requirements, Chapter 13 might be recommended. Through the US Bankruptcy Code, Chapter 13 bankruptcy allows debtors to pay creditors over time at an amount that is affordable. In general, a Las Vegas, NV chapter 13 bankruptcy lawyer will negotiate the debt with creditors, and represent you in bankruptcy court.
Understanding Chapter 13 Bankruptcy
Chapter 13 is considered to be an adjustment of debt. It is a type of bankruptcy that is ideal for people who earn a regular income, but need a reorganization of their debt so they can repay their creditors. Depending on your circumstances, it may be possible to arrange a repayment plan that will give you between three and five years to resolve the debt. As soon as you file for bankruptcy, an automatic stay on collection efforts is imposed. This means that any lawsuits, foreclosure proceedings, or other legal debt collection proceedings are halted. At the end of the 3-5 years, any remaining unsecured debt will be discharged.
If you are more concerned about the demands of the creditors rather than the ability to pay your bills, a Las Vegas bankruptcy lawyer might recommend filing for chapter 13. The eligibility rules for this are strict, but more people will be able to qualify for chapter 13 then chapter 7. Keep in mind, chapter 13 bankruptcy will not eliminate:
- Court ordered child support or alimony
- Any fines or penalties that are incurred from a traffic ticket, restitution, etc.
- Student loans from private sources and the federal government
- Income taxes
Benefits and Drawbacks of Chapter 13
As a Las Vegas, NV chapter 13 bankruptcy lawyer might explain to you, there are many benefits to this form of bankruptcy as well as some drawbacks.
- Your petition for chapter 13 will stop all collection efforts, including lawsuits, calls, and wage garnishment
- Your assets, including your home, can be protected rather than sold off (as in Chapter 7)
- You can keep your home as long as you can pay your mortgage
- Chapter 13 on a credit report is viewed as less extreme than chapter 7
- You cannot discharge certain debts (see above)
- Chapter 13 bankruptcy will remain on your credit report for a number of years
- The process can take several months
- All new mortgage payments must be repaid on time.
If you do not comply with the legal requirements, your bankruptcy case might be dismissed. Creditors could then reinstate their lawsuits, foreclosure, and other collection efforts.
A chapter 13 bankruptcy lawyer in Las Vegas, NV can help to weigh out these benefits and drawbacks so you can make a sound decision on how to proceed.
Qualifying for Chapter 13
The primary eligibility rule for chapter 13 is your income. If you have enough disposable income to pay down your debt over the period of 3-5 years, you will likely qualify. In addition to this, you may need to:
- Be an individual not a business.
- Be current on state and federal taxes.
- Show proof that you have filed taxes for at least 4 years prior to filing for chapter 13.
- Cannot have more than a certain amount in unsecured debt.
- Cannot have above a certain amount of secured debt. 4
If you would like to know more about chapter 13 and are ready for guidance in making an informed decision about your future, please call Ballstaedt Law Firm. We can help you to navigate the complex process of bankruptcy and debt relief. To find out more, call Ballstaedt Law Firm now to speak with a chapter 13 bankruptcy lawyer in Las Vegas, NV.