Chapter 13 Bankruptcy in Albany NY
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A type of bankruptcy utilized by individual consumers, notably those who are experiencing financial troubles but are earning enough money to repay some debt, Chapter 13 bankruptcy is also known as "wage earner's bankruptcy" or "repayment plan bankruptcy." Anyone can file for Chapter 13 bankruptcy in Albany, NY protection from creditors, even salary earners, and independent contractors. Chapter 13 is not available to corporations or partnerships. There is a debt ceiling as well.
Only people who have secured obligations under $1.396 million and unsecured debts under $465,275 are eligible to file under Chapter 13. The caps are occasionally changed to reflect inflation. The majority of obligations are not forgiven in Chapter 13 bankruptcy, unlike Chapter 7. However, it does grant borrowers a respite from collection activities and can halt attempts by creditors to seize your house, vehicle, or other property. Chapter 13 bankruptcy in Albany, NY, like other forms, takes its name from the region of the United States. Code of Bankruptcy that defines it. Your credit report will include a Chapter 13 filing for seven years. But the time begins when you submit the petition, not when the repayment plan is over. You won't need to take any action to have the Chapter 13 notation off your credit record. That should happen automatically thanks to the credit reporting agency. If you file a Chapter 13 case and later discover that you are once again deeply in debt, you can file another Chapter 13 petition within two years of the original filing date and pursue the discharge of new obligations. |
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However, you must wait four years before attempting Chapter 13 if your prior bankruptcy was a Chapter 7. The deadlines only apply if you anticipate having any debt discharged, which means you won't be required to pay it back. Chapter 13 bankruptcy can be filed more often, but you cannot expect your debt to be dismissed until the necessary amount of time has passed. For non-dischargeable reasons, such as requesting a halt to collections so you may catch up on bills, you might still wish to file for Chapter 13 bankruptcy in Albany, NY. Debtors who are facing bankruptcy under Chapter 13 are given some breathing room. It halts all forms of collection, including repossessions and foreclosures. Some debts will need to be repaid, often over a three- to five-year period. But in the end, you come out of it with no debt and, presumably, the ability to handle any future debt obligations better.
Meeting Qualifications
Individuals may file for bankruptcy under Chapter 13 in Albany, NY, but corporations and LLCs may not. Even if their debts are personal, stockbrokers and commodity brokers are also ineligible to file. People must demonstrate that they can afford the monthly fees. Within 14 days of submitting a petition, they must reveal their income sources and provide the court with the information. A person's income can come from a number of sources, including royalties, rent, Social Security payments, unemployment benefits, pension income, and the sale of real estate.
Additionally, you must file your taxes on time. You must provide documentation proving you submitted to state and federal tax returns during the last four years. If you are unable to do this, your case may be postponed until you do, and if you are unable to provide transcripts of your returns, your case may be dismissed. After reviewing the income and debt data, the trustee will set up a hearing to determine whether the plan is acceptable. The Chapter 13 case will be released once the repayments have been made in full. Three to five years are usually needed for this.
Additionally, you must file your taxes on time. You must provide documentation proving you submitted to state and federal tax returns during the last four years. If you are unable to do this, your case may be postponed until you do, and if you are unable to provide transcripts of your returns, your case may be dismissed. After reviewing the income and debt data, the trustee will set up a hearing to determine whether the plan is acceptable. The Chapter 13 case will be released once the repayments have been made in full. Three to five years are usually needed for this.
How Does Bankruptcy Chapter 13 Work?
Chapter 13 bankruptcy in Albany, NY puts an agressive debtor on a scheduled repayment calculated plan and provides various forms of financial pressure relief. A freeze on collections, for example, starts when the bankruptcy petition is filed the court. Debt Collectors and debt creditors are compelled to no longer call, write, visit, file legal action, garnish wages, and otherwise can not try to get their money. Chapter 13 bankruptcy also stop, at least temporarily, foreclosure and repossession proceedings. Chapter 13 bankruptcy also protects co-signers on loans from being pursued by creditors.
Chapter 13 bankruptcy is intended for people who are working and earning enough money to pay off their debts—but need a little help. So, they’re given more time to make payments and often don’t have to repay the full amount of their debt. The debtor’s payments go to a trustee, allowing Chapter 13 bankruptcy in Albany, NY to act as a kind of debt consolidation plan. The process simplifies monthly payments and ends the contract between the creditor and the debtor. But the repayment plan itself can be complicated under Chapter 13. It must address three different types of creditors: priority, secured and unsecured.
Chapter 13 bankruptcy is intended for people who are working and earning enough money to pay off their debts—but need a little help. So, they’re given more time to make payments and often don’t have to repay the full amount of their debt. The debtor’s payments go to a trustee, allowing Chapter 13 bankruptcy in Albany, NY to act as a kind of debt consolidation plan. The process simplifies monthly payments and ends the contract between the creditor and the debtor. But the repayment plan itself can be complicated under Chapter 13. It must address three different types of creditors: priority, secured and unsecured.
What Does a Chapter 13 Repayment Plan Look Like?
Priority debts are paid in whole and first. They primarily consist of tax debts. Collateral is required for secured debts, such as vehicle loans and mortgages. If filers want to maintain the collateral, they must pay secured lenders at least the collateral's value. Credit card debt is an example of an unsecured debt, which lacks any form of security. They receive the last payment, which may not be made in full or at all. When determining how much money unsecured creditors should receive, the bankruptcy court will take into account the debtor's available income. Depending on the debtor's monthly income and the size of their family, a Chapter 13 repayment plan often lasts between three and five years.
A filer who makes less than the state median for households like theirs can often file in three years. A five-year period will be granted to anyone making more money than the state median for their household size. Any outstanding debt is "discharged" when all payments are made in accordance with the plan, which implies that even if the creditor didn't receive the whole amount, the debt is no longer owed. Not all debts can be forgiven. The following debts cannot be discharged: mortgages, alimony, child support, some taxes, school loans, and debts accrued as a result of criminal activity. The Debtor shall make all payments under the Plan on schedule and shall not incur any new Debt without the prior written consent of the Court.
A filer who makes less than the state median for households like theirs can often file in three years. A five-year period will be granted to anyone making more money than the state median for their household size. Any outstanding debt is "discharged" when all payments are made in accordance with the plan, which implies that even if the creditor didn't receive the whole amount, the debt is no longer owed. Not all debts can be forgiven. The following debts cannot be discharged: mortgages, alimony, child support, some taxes, school loans, and debts accrued as a result of criminal activity. The Debtor shall make all payments under the Plan on schedule and shall not incur any new Debt without the prior written consent of the Court.
How To File For Chapter 13 Bankruptcy?
You can apply for Chapter 13 bankruptcy protection "pro se"—without a chapter 13 lawyer's assistance. But Chapter 13 is difficult. A novice pro se filer could easily make a mistake that would cause the bankruptcy court to reject the petition. The filer would once more be at the mercy of creditors if that happened. Attempts at collection, foreclosure, and repossession may continue. In light of this, a person filing for Chapter 13 bankruptcy in Albany, NY should do the following:
- Employ A Knowledgeable Chapter 13 Lawyer. Untrained individuals may find it difficult to determine which debts Chapter 13 can remove as well as how or if a filer can prevent foreclosure or repossession. Additionally, our chapter 13 lawyer can assist you in determining whether Chapter 13 is the best bankruptcy to file or whether you even need to do so. Last but not least, our chapter 13 attorney can help with the numerous documents that need to be filled out and take the initiative when dealing with creditors, the trustee, and the judge.
- Join A Credit Counseling Program. You have 180 days from the time you file your application with the bankruptcy court to finish an approved course. After finishing the course, keep the certificate you receive.
- Assemble The Relevant Paperwork. Tax returns, pay stubs, W-2s, and account statements for banks, brokerages, and retirement accounts are among them. Additionally, ask for a recent credit report. This will make it easier for you to list every creditor you owe money to.
- Garner The Funds Necessary To Pay The Court Costs. The normal filing price for a Chapter 13 case in the federal bankruptcy courts, where all bankruptcy cases are handled, is $310, which is a little less than the $338 filing fee for a Chapter 7 case.
- Download & Complete The Required Forms. You can fill out a few dozen pieces of paperwork, including the petition for bankruptcy and lists or schedules of assets and debts, on the website for the bankruptcy courts. There are forms in the "100" series for single people and married people. Print single-sided copies to hand to the judge.
- You Should Submit A Bankruptcy Petition. To discover the bankruptcy court that serves your ZIP code, use the "Federal Court Finder" function on the U.S. courts website. Bring your forms, petition, and fee money to the court. After paying the charge, hand the cashier your documents. The clerk will provide you with information about your case number, as well as the name and contact details of the trustee in charge of it.
- Make A Plan In Writing To Pay Off Your Creditors. Within 14 days of submitting your petition, you must do this. You will make consistent payments to the trustee as per your plan, typically monthly or bimonthly. Even if the court has not yet approved your repayment plan, you must start providing that money within 30 days of filing for bankruptcy.
- Meet With Your Creditors In Person. The trustee will convene a meeting of the creditors three to seven weeks after your bankruptcy petition is submitted. You must show up for this meeting so that you can be sworn in. Although it's possible, creditors rarely do so.
- Await The Hearing To Get Your Repayment Strategy Confirmed. Within 45 days of the creditors' meeting, it is convened in court under the supervision of a bankruptcy judge. Although creditors can protest that they aren't receiving everything they are entitled to, in theory, the court will approve the plan. You can submit a modified proposal if you don't get an OK right away.
Once everything is accepted, the debtor pays the trustee, the trustee makes the necessary payments to the creditors, and eventually, the obligations are settled. However, the filer must complete a debtor education program before their obligations can be fully dismissed. The training must be provided by an approved provider, just like pre-bankruptcy credit counseling. Eventually, the lawsuit is resolved and all debts are paid off, typically after three to five years.