Chapter 13 Bankruptcy

Benefits of filing a Chapter 13 Bankruptcy:

A Chapter 13 Bankruptcy is a powerful tool to pay creditors on terms that are favorable to you, the debtor.  This chapter of bankruptcy allows the Debtor to keep property that has delinquent payments.  A Debtor normally utilizes a Chapter 13 Bankruptcy in the following situations:

First, a Chapter 13 Bankruptcy can allow a Debtor to stop the foreclosure of a residence or repossession of a vehicle.  The Chapter 13 repayment plan allows the Debtor to take any missed payments and pay back the creditor over a three to five year period. 

Additionally, debts that may not be dischargeable in a Chapter 7 can be paid back through a Chapter 13 Bankruptcy.  Examples of non-dischargeable debts are delinquent income taxes and back due child support.  The Chapter 13 Bankruptcy allows the Debtor to repay these debts over the three to five year payment plan.

Eligibility to file a Chapter 13:

If you have filed a previous Chapter 7, you must wait four years before you file for a subsequent Chapter 13 bankruptcy.  A Chapter 13 is different from a Chapter 7 because there is no income requirement or “means test” for Chapter 13 eligibility. Most people who are not eligible for Chapter 7 are eligible for Chapter 13 bankruptcy.  If you have regular income that you can use to repay a portion of your debts, a Chapter 13 may be right for you.

Timeline of a Chapter 13:

The first step is to come into our office for a FREE consultation.  Our experienced bankruptcy attorneys will sit down with you face to face.  They will evaluate your debt and income situation as well as provide you with options for your unique situation.

After that consultation, if Chapter 13 Bankruptcy is right for you, you will work with our office to prepare your bankruptcy petition.  We will then carefully review your case and ensure that we have all the necessary documents to provide to the Court.  Once everything is in order, we will then file your case.  After your case is filed you can expect to attend a bankruptcy conference with the Chapter 13 Trustee.  This meeting is informal, and is not in a courtroom or in front of a bankruptcy Judge.  Along with this meeting, the court will also schedule a “confirmation hearing”, in order to approve your payment plan. The bankruptcy’s duration depends on the type and amount of debt that the Debtor has, which will vary depending on each person’s unique situation.    

There are also two online courses that you will need to complete, namely credit counseling and financial management.  One course will be taken prior to the bankruptcy being filed and the second course is taken after the case is filed.

Cost of a Chapter 13:

The cost of filing a Bankruptcy case is an important consideration.  At Coggins, Larreau & Lythgoe, PC, we are sensitive to our client’s situation and understand if you had excess funds, you probably would not be calling us for help.  Our attorney fees will vary, depending on the chapter and complexity of your case.  As part of your FREE consultation, we will explain our fee structure to you. 

There are also certain fees associated with every bankruptcy case.

•Filing fees for a Chapter 7 charged by the court are $299.00 

•Filing fees for a Chapter 13 charged by the court are $274.00.

•There is also a fee for the Credit Counseling Course and Financial Management Course.  The fees for these courses depend on the provider and can range from $35.00 and up for the first class and $10.00 and up for the second course.

Attorney’s fees in a Chapter 13 differ slightly from attorney’s fees in a Chapter 13.  The flat fee for a consumer Chapter 13 Bankruptcy case is set by the local bankruptcy rules and most attorneys charge the same amount.  A distinct advantage of a Chapter 13 Bankruptcy is that a significant portion of the attorney fees can be included in the repayment plan.