Frequently Asked Questions about Bankruptcy
Bankruptcy is a legal action usually based on where you have lived for the past six months. Chapter 7 and Chapter 13 (covered here) are for individuals and small businesses. To determine which is better for you, please contact me and I will guide you, so you can be assured of the best result for your situation.
WHAT ARE DEBTS AND EXEMPTIONS?
When you file any kind of bankruptcy case, you must list or disclose all of your assets and all of your debts. This does not mean you cannot keep certain debts, like debt for your home or your car. You merely have to list or disclose everything about your finances to your attorney.
Exemptions allow you to protect property from your creditors. If you have moved from another state within the past two years, you must have an attorney review your situation to determine the correct exemption law you can use.
When I claim the correct exemptions for you, you will be able to keep most or all of your property, if the value of that property is within the dollar limits of the law.
WHAT IS CHAPTER 13 BANKRUPTCY?
Chapter 13 Bankruptcy is a “wage earners” bankruptcy. Any individual with regular income can qualify for Chapter 13. That means anybody, regardless of the amount of debt, regardless of income, can qualify for debt relief under Chapter 13.
Regular income can include social security, self-employment, private disability or retirement, and wages from employment, to name just a few. You will not be able to file a Chapter 13 if you are unemployed, or on temporary workers’ compensation benefits. Most every other type of income or benefits will work.
HOW CAN THE BALANCE OF MY FEES BE PAID THROUGH MY PLAN?
One of the best things about Chapter 13 is that when your case is filed, the balance of any remaining attorney fees can be paid from your monthly plan payments, interest free. Additionally, as work is done on your case during the duration of your bankruptcy, any fees for new work that you need, such as Court permission to refinance a home or buy a newer car, can be financed through your plan payments. This allows you to receive the legal services you need in your case without coming up with more money, and without fear of losing your case and not getting your debts discharged.
HOW IS MY MONTHLY PLAN PAYMENT COMPUTED?
In a Chapter 13 case, you will have to make monthly payments toward what you can afford to pay to your creditors, not what you owe. Debt settlement companies compute your payment to them based on what you owe. I compute your Chapter 13 payment based on what you can afford.
For example, if you owe $20,000 in credit card debt, debt settlement may require $500 per month to settle or pay off the debt. If you can only afford $100 per month, that is all you will pay in Chapter 13. If you owe $50,000 in credit card and medical debt, debt settlement might require you to have to pay $1,000, based on what you owe. Again, in Chapter 13, if you can only afford to pay $100 per month, that is all you pay.
WHO DETERMINES HOW MUCH I CAN PAY?
You and I work together to show to the Court what you really can afford and still have enough money to live on. As an experienced bankruptcy attorney, I have helped thousands of people develop realistic budgets they can live on, and these budgets are accepted and approved by the Court.
Many inexperienced or less-experienced attorneys will have you paying too much for your monthly Chapter 13 plan payment. They do not know all of the factors that go into developing a successful budget. That is why the national completion rate for Chapter 13 cases is 60-70%. My success rate for completion of Chapter 13 cases is 90%. Some cases do not go through for reasons beyond everyone’s control. But I have helped thousands of people erase or reduce millions in debt, and I can help you.
HOW LONG WILL MY CHAPTER 13 PLAN LAST?
Under the law, a Chapter 13 plan of repayment can last from three to five years. The time is based on many factors. A note of caution: If your paperwork is improperly done, you may be forced into a five-year plan. As an experienced bankruptcy attorney, I can help you determine whether you qualify to have your plan last only three years
Information in this site is provided free of charge and as a courtesy to visitors to this site, and is not intended to be relied on or used as a substitute for legal advice. Neither Ted L. Tinsman nor Douglas, Haun & Heidemann, P.C. can represent you until we have entered into a written fee agreement creating an attorney/client relationship.
Please do not send confidential information through this website until we have a signed fee agreement. Visiting this site does not create an attorney/client relationship.
Although every effort has been made to provide accurate information, the laws are constantly changing in this area of law. The author, Ted L. Tinsman, and Douglas, Haun & Heidemann, P.C., specifically disclaim any liability or warranty for the accuracy or currency of the information.