The experienced Chapter 13 Bankruptcy attorneys at Stone Rose Law have also helped many people in Scottsdale and the surrounding communities obtain Chapter 13 bankruptcy relief. A Chapter 13 Bankruptcy differs from a Chapter 7 because a debtor makes payments toward one’s debts over a period of 3 to 5 years as opposed to having most unsecured debt simply discharged. If all plan payments are made so that a Chapter 13 plan is fulfilled, then any outstanding balances on the type of unsecured debt typically discharged in a Chapter 7 bankruptcy will also be discharged.
A Chapter 13 Bankruptcy is usually appropriate when a person is behind on mortgage payments but wishes to keep their family home or the person is ineligible for a Chapter 7 under the means test. For anyone in Scottsdale that is behind on mortgage payments, the Chapter 13 bankruptcy process provides an effective way to avoid loss of one’s home to foreclosure. If you have fallen behind on your mortgage, the lender may refuse to accept anything short of the full amount of any outstanding arrearages (i.e., missed mortgage payments along with late fees).
If you qualify for a Chapter 13 bankruptcy in Scottsdale, you will be able to stretch the repayment of the amount you are behind over a 3 or 5 year payment plan and be protected from foreclosure as long as you remain under Chapter 13 protection by making your plan payments on the mortgage arrearages as well as current mortgage payments as they become due.
There are also maximum debt requirements for eligibility for Chapter 13 Bankruptcy relief if a Scottsdale resident wants to file a Chapter 13 Bankruptcy. You may be ineligible to file for Chapter 13 Bankruptcy relief if your secured debt amounts to more than $1,010,650, and your unsecured debts exceeds $336,900.
As with a Chapter 7 Bankruptcy, you must take a credit counseling course. You also must file a packet of paperwork that is even more complex than in a Chapter 7. In addition to the documents that must be prepared for a Chapter 7 Bankruptcy, you must also prepare a Chapter 13 repayment plan that will indicate how creditors will be paid under the plan. This packet of documents can be very complex and typically is from 30-50 pages in length. The Chapter 13 Bankruptcy plan payments will include payments on arrearages to secured debtors, such as your mortgage company.
The payment plan is the fundamental component of a Chapter 13 bankruptcy, and feature that distinguishes it from a Chapter 7 Bankruptcy. The payment plan will provide the details about how your debts will be handled during the administration of the bankruptcy by the Chapter 13 Trustee. The plan will specify how much of your unsecured debt will be paid under your payment plan. The plan will also specify how much of the plan payment will go toward your mortgage arrearages. The plan must also provide for full repayment of certain priority debts including spousal support, child support, certain taxes and unpaid wages.
Ultimately, a lot of complicated calculations go into your Chapter 13 Bankruptcy payment plan with the aim of determining a monthly payment plan that is feasible for you to afford and acceptable to the trustee and your creditors. The key to having the Trustee approve a Chapter 13 Bankruptcy payment plan is that you must have sufficient income to fund the plan and make the payments. This issue sometimes referred to as “plan feasibility” is of critical importance.
If you successfully complete your Chapter 13 payment plan by making all plan payments, you will receive a Chapter 13 discharge. Completion of your Chapter 13 payment plan will mean that all arrearages on secured debts and priority debts will have been paid. You will also have repaid some portion of unsecured debts. Any outstanding balances on unsecured debts will be discharged as with a Chapter 7 discharge.
Stone Rose Law represents Scottsdale debtor in Chapter 7 and Chapter 13 Bankruptcy matters in the following areas in Arizona:
Our experienced bankruptcy attorneys provide legal representation to clients throughout the Scottsdale area. We provide comprehensive debt relief and asset protection solutions. We recognize the stress and anxiety that accompanies overwhelming financial hardship. We offer candid and honest assessments of your rights and legal options so call Stone Rose Law today at 480-498-8998 today to see how we can help.