Basic Information Regarding Chapter 13 Bankruptcy
- January 27, 2018
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There will come a time that an individual would be having a hard time managing all their expenses including their debts. This may make them declare bankruptcy and try to recover their financial status and capabilities by getting a fresh start. Filing them allows you to find solutions to your current issues and look for ways in overcoming them and preventing it from happening again.
There are different kinds of this that you can file for which depends upon your current situation and qualifications. One of the type you could be under will be Chapter 13 bankruptcy Utah law firms can help you with. This is usually chosen over the more popular and easier Chapter 7 when you want to keep ownership of certain important assets.
Aside from saving important assets, the debtors would like also to obtain a discharge of their debts from the creditors. This is possible when the court will tell them that the debtor has fulfilled all requirements needed for filing a Chapter 13 case. It means that he does not have any obligation anymore in paying them although not every debt is dischargeable.
Before getting to this point and prior to filing for your case, there are many things you should have to do first. Among them is by taking a session in credit counseling where the counselor reviews your budget and determine if you have other ways of gaining control on your finances. These are offered by private companies approved by the government.
These sessions usually last for around one hour and normally cost twenty five dollars which could be done online plus a quick phone call from the counselor. Other options that are available would be talking with them through the phone or personally in their office. Choose one which is more convenient for you.
Because some people have abused the bankruptcy system even when they should be capable in paying their debts, a means test was created. This calculates and compares your income with your necessary and reasonable expenses while considering your family size. This also considers the median income at your state when they are making the calculations.
The test enables them to know if you are abusing the system and still has the capabilities of paying your debts in parts. If you did not pass this test for letting you be allowed to file a case for Chapter 13, this will inform you about your ability to pay. They would tell you how much it must be each month in order to satisfy your creditors.
All cases for bankruptcy are filed at special federal courts by submitting documents which list all your assets, debts, expenses and income. These are known as petition, schedules and statement of financial affairs and all information should be true, complete and correct as long as you know. You would sign them under the penalty of perjury.
Repayment plan under this usually last for three years at least but not more than five years. You are going to propose a plan of paying all creditors at the beginning of the case. Then your debts will be classified as secured or unsecured.