Chapter 13 Bankruptcy Eligibility

Are You Eligible for Chapter 13 Bankruptcy?

Bankruptcy Attorneys in Kansas, Missouri

Bankruptcy is a serious consideration when you have too many bills that you can’t pay, but you also want to keep your assets. In some cases, bankruptcy is reasonable, and it may be the best option for some people. There are different types of bankruptcy, each with its own benefits and drawbacks.

If you or your company is facing bankruptcy, you will need the services of a Kansas bankruptcy attorney. There are lots of attorneys that can assist you through this time, but if you want the services of the top bankruptcy lawyers in Missouri, look no further than Roach Bankruptcy Attorney. 

Why Do I Need a Bankruptcy Attorney in Kansas, Missouri?

It is no secret that when people are in trouble financially, bankruptcy can help them get out of it. Are you experiencing the following problems?

  • Unexpected medical expenses;
  • Lost your job; or
  • Had your boss practically fire you

 

Then bankruptcy can help you get back on your feet. Bankruptcy attorneys in Kansas and Missouri like Roach Bankruptcy Center, LLC are more than happy to let you know your options so that you can proceed safely.

What is Chapter 13 Bankruptcy?

Chapter 13 refers to a bankruptcy case in the United States in which debtors reorganize their finances under court supervision and permission. Individuals and married couples can apply for Chapter 13 bankruptcy, even if they are self-employed or operate an unincorporated business. 

As part of a Chapter 13 reorganization, also known as a wage earner’s plan, debtors are required to file and adhere to a plan to repay their outstanding debts within three to five years.

In the majority of cases, the repayment plan must give a considerable payback to creditors, at least equal to what they would receive under other kinds of bankruptcy, and it must, if necessary, utilize one hundred percent of the debtor’s disposable income.

Chapter 13 bankruptcy requires debtors to produce a list of all creditors and the amount of money owing to each, a list of any property possessed, information on income quantities and sources, and a breakdown of monthly spending.

Facing Imminent Foreclosure?

We can help save your home! Even if time is running out, we’ll find a way. Find out how by speaking with our bankruptcy lawyer in Kansas City, Missouri today.

Why File Chapter 13 Bankruptcy?

People typically choose Chapter 13 bankruptcy if they earn too much to pass the Chapter 7 means test, do not want to lose a house or car after falling behind on monthly payments, wish to avoid wage garnishments and other collection tactics, and wish to repay support arrears or recent tax debt over a period of five years.

Other advantages not accessible in Chapter 7 include the elimination of junior mortgages on a home through “lien stripping” and the reduction of a car loan payment through “cramdown.”

Advantages of Going into Bankruptcy under Chapter 13

Filing for Chapter 13 bankruptcy offers several benefits to persons who are struggling with enormous levels of debt, including the following:

Are You Eligible for Chapter 13 Bankruptcy?Keeping your house from foreclosure.

A homeowner can avoid foreclosure by filing for Chapter 13 bankruptcy, which allows them to pay back past-due mortgage payments for many years. To save the home, it is necessary to make all mortgage payments on schedule while also paying off the Chapter 13 payment plan. If this is accomplished, the house may be salvaged.

Rearrange the repayment schedules for secured obligations.

It is possible to prolong secured obligations, other than mortgage debts, throughout the payment plan.

Co-signers and other parties should be protected.

Third parties and co-signers who would otherwise be jointly and severally responsible for consumer and credit card bills are better protected in Chapter 13 bankruptcy, according to the Federal Bankruptcy Code. This is beneficial in preventing family members and acquaintances from experiencing financial difficulties.

If you are having financial issues, Chapter 13 bankruptcy may be a smart option for you. Please call our law firm for a free consultation to see whether it is the correct choice for you. We can discuss your alternatives with you and determine whether or not a repayment plan is in your best interests.

What Kinds of Debt cannot be Discharged in Kansas Bankruptcy?

Filing for bankruptcy does not mean all your debts will be eliminated. There are exceptions to the statute in Kansas. These consist of:

 

  • Child support and alimony 
  • Student loans 
  • In addition to income tax bills incurred within the past three years, all other tax debts are included.
  • Legal penalties and punishments, such as tickets
  • Dues for an injury or death incurred as a result of a DUI

 

These provisions apply to both chapter 7 and chapter 13 bankruptcies. If you wish to keep the property, you must also continue to pay secured debts (such as a mortgage or car payment).

Facing Imminent Foreclosure?

We can help save your home! Even if time is running out, we’ll find a way. Find out how by speaking with our bankruptcy lawyer in Kansas City, Missouri today.

Am I Eligible for Bankruptcy?

The subsequent phases involve determining your eligibility, the cost of the plan, and any potential obstacles that may arise.

Debt limits. 

You can only have a certain amount of debt in Chapter 13 bankruptcy; the debt limits for Chapter 13 bankruptcy can be found here. If your entire debt load is too large, you will be ineligible, but you can still file for Chapter 11 bankruptcy.

Income requirements. 

When filing for Chapter 13 bankruptcy, you must demonstrate that you can afford to pay both your monthly household expenses and the monthly plan payment. The bankruptcy court will not “confirm” or approve your planned Chapter 13 plan if your income is insufficient or nonexistent.

Person status. 

Small firms and corporations are not eligible for a Chapter 13 debt discharge; only individuals and sole proprietors are eligible. However, small business owners who pay their taxes separately must include personally guaranteed business debts in their plans. And practically speaking, a business owner’s improved financial state can indirectly benefit a small business, thus Chapter 13 may be worthwhile.

Means Test

Debtors with incomes below the median pass the means test on the first try. Debtors who make more than the median income must proceed to round two and perform a complex examination of their income and spending to determine if they have sufficient disposable income to pay their unsecured creditors.

The purpose of the means test is to determine whether or not a debtor has money left over after paying his or her living expenses. It indicates, at least in theory, whether a chapter 7 bankruptcy petition would be abusive or whether a chapter 13 bankruptcy payment plan is required. Additionally, it determines whether the payment plan must be at least three or five years long.

Schedule a consultation with our Trusted MO Attorney

Roach Bankruptcy Center LLC focuses only on the practice of bankruptcy law and has been in for more than a decade. In other words, we are a debt relief agency, which means that we assist clients in filing for Bankruptcy under Chapter 7 of the United States Bankruptcy Code.

Our Kansas City, Missouri bankruptcy lawyers assist people or debtors who need to file for Chapter 7 bankruptcy, Chapter 13 bankruptcy, or an emergency chapter 7 bankruptcy filing.

Please call our law office for a free consultation to see whether Chapter 13 is the correct solution for you.

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