A Chapter 13 bankruptcy petition is also known as a wage earners bankruptcy. It allows debtors with a consistent income to negotiate a payment plan to repay all or a portion of their debts to creditors over a period of three to five years. The automatic stay benefit also pertains to Chapter 13. After a bankruptcy petition is submitted, an automatic stay is enacted, halting all collection efforts by creditors. During the bankruptcy, creditors will be prohibited from contacting the debtor in any way, lest they violate the automatic stay. This is arguably the greatest advantage of all bankruptcy filings. Under Chapter 13, an individual has the opportunity to prevent the foreclosure of their residence. When negotiating the payment plan, the debtor can halt the foreclosure by negotiating the missed mortgage payments and making payments over time.
Due to the payment plan, chapter 13 is not the first option for the majority of debtors. The Chapter 13 payment plan is proposed to the bankruptcy court by the debtor's bankruptcy counsel via the bankruptcy trustee. To devise a plan that will be most advantageous to the debtor, it is crucial to have a Chapter 13 bankruptcy attorney with extensive experience. It is best to devote a great deal of time to creating a budget that the debtor can actually afford when crafting the plan. If the payment plan is impossible and the debtor is unable to continue making payments, the bankruptcy petition will be dismissed. Typically, a Chapter 13 payment plan is founded on the debtor's ability to pay rather than the creditors' willingness to accept. If that is all you can afford, a Chapter 13 payment plan may only include a minimal payment to unsecured creditors.
To corroborate your income, the bankruptcy court will require six months of pay stubs or bank statements. If feasible, a bankruptcy attorney will use actual expenses when preparing a budget. Occasionally, the court will require the use of the IRS's expense guidelines, which are likely significantly lower than actual. The proposed payment plan will be filed by the bankruptcy attorney at the time of the actual bankruptcy petition. The creditors and trustee will have the opportunity to object to the plan at that time. In accordance with the Bankruptcy Code, the bankruptcy court will hear the objections and determine whether the plan is equitable. Once the plan is authorized, creditors are obligated to adhere to the Chapter 13 plan.
Given the complexities of bankruptcy filing, a bankruptcy attorney is an invaluable asset. Consultation with a bankruptcy attorney can assist in avoiding future financial issues that may be neglected by an inexperienced person. How can you place a price on peace of mind during these trying times?""
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