Tag: Chapter 13 Bankruptcy

The common tendency of bankruptcy filers is to believe that Chapter 7 is better than Chapter 13. Yes, Chapter 7 has many benefits, but it can outrightly not be regarded as the best alternative compared to Chapter 13. There are many scenarios when Chapter 13 can prove more advantageous than Chapter 7. Every bankruptcy chapter has some or the other benefits and flaws. To learn more about all the Chapters and their technicalities log on to Recovery Law Group. Some of the Chapter 13 benefits over Chapter 7 can be listed as follows-

• When you are not eligible for Chapter 7

If you fail to be eligible for Chapter 7, well the only option available could be Chapter 13. In that scenario, Chapter 13 is beneficial. In other words, it is easier to qualify for Chapter 13 than Chapter 7. There is a median test as well as a means test to be eligible for Chapter 13. The calculation can become slightly intriguing but the straightforward debt thresholds for Chapter 13 make it a lot easier to determine if you qualify for Chapter 13 or not.

• Safeguarding your car and other important assets

Even if you are eligible for Chapter 7 after undergoing the complicated calculations, applying through Chapter 13 might still be a better option. If you are running behind the payment schedules of your car mortgage, you get to keep your car as well accommodate the payment of the arrears in the proposed payment plan over the next three to five years.

• Managing the priority and non-releasable debts

If you have a larger portion of debts that cannot be released, Chapter 13 is the right option for you. Child support, alimony, tax debts, etc., are a few examples of non-releasable debts. If your debt constitutes of a good portion of these debts, then Chapter 13 is a very good option. You get sufficient time period of 3-5 years to pay off these non-releasable debts, while you end up without assets as well as liable to these non-releasable debts with Chapter 7 bankruptcy code Dallas.

• Time is all that you need

Sometimes, people come across a stage when nothing is working well for them and it is usually all about time. A relaxed phase of 2-3 months can put you back on track with your finances and help you pay off all your dues. This time is very difficult to get especially when you are falling behind several payments across lenders. If you have a steady flow of income and time is all you need to pay off your debts, Chapter 13 can help you close most your debts as well keep all your assets intact. This is possible due to a phenomenon called ‘automatic stay’ which is applied as soon as you apply for bankruptcy. Some salient features of ‘automatic stay’ can be listed as follows-

1. The lender cannot garnish your wages, or withdraw your cheque, funds from the bank account or make such request to your bank
2. The creditor cannot repossess your secured loan assets like a car or jewelry, or any other asset kept as collateral
3. The lender cannot foreclose a home mortgage either
4. The creditor cannot initiate any suit against you for defaulting payments

• If your tally of a nonexempt asset includes an asset you had like to keep

If you have a nonexempt asset which shall be liquidated during the course of Chapter 7 bankruptcy procedure, Chapter 13 becomes an obvious choice to safeguard your asset as none of the assets are repossessed or liquidated under the Chapter 13 bankruptcy.

• To relieve you co-debtor

If there is any guarantor for any of your debts, the co-signer or co-debtor can have all the possible troubles of recovery with Chapter 7 bankruptcy. The filer is safe, but the guarantor or co-debtor isn’t. The lenders will go after the guarantor to recover as much of dues as possible. This could be very disturbing for the co-debtor. With Chapter 13, there is no such hook on the co-debtor since you have proposed to payout most of the debts in the next 3-5 years.

To know more about Chapter 13 and Chapter 7 technicalities, formalities, applying details and to discuss what is best in your case, call us now at 888-297-6203.

When you are struggling with debts, you are probably considering bankruptcy via Chapter 7 or Chapter 13. Once, after assessing different eligibility criterions, you lock upon Chapter 13, the next question is to determine how effective it is and what would be an estimated cost for the same. We will try to explore an estimate of some of the costs and effectiveness of the whole process using the survey results of the readers. If you have still not determined whether to go for Chapter 13 or Chapter 7, consider logging in to Recovery Law Group for information about eligibility and other salient features of each chapter to make a wiser decision. To start with let’s identify a range of all the costs associated with Chapter 13.

1. Cost of an attorney

The attorney cost can range from $1,500 to about $5,000. The survey shows a good chunk of people paying between $0 to $3,000. To be specific, 24% of readers confirm to have paid below $1,500 and 39% readers confirm to have paid between $1,500 to $3,000. This makes for 63% in the range of $0-$3,000. 30% people paid between $3,000- $5,000. While 7% of people ended paying more than $5,000. Depending on the complexity of the case, you are likely to end up in the $0-$3,000 range or $3,000-$5,000 range. In rare circumstances, you might end up paying above $5,000 as per the survey.

The cost of attorney also depends on various factors like an attorney, win percentage history, bankruptcy filing state, etc. Most of the attorneys usually charge a flat fee that includes most services a common bankruptcy case would need. An additional $310 on an average might have to be kept aside as filing fee. There are bankruptcy court rules and regulations or guidelines that control pricing for the services offered by the attorneys too. The range for attorney cost as per a few states can be listed as follows-

• Texas attorneys might charge you between $3,000-$3,825
• California attorneys might charge you between $3,300-$5,000
• Florida attorneys estimate ranges between $3,500 to $4,500
• Michigan would be between $2,600 to $3,650
• Finally, Virginia would be $4,000 to $5,100

What potential reasons could hike your attorney cost?

• If you are a sole proprietor and filing for bankruptcy under Chapter 13
• If your house is less worth when compared to the amount you owe. You might want to seek a release of debt for the amount in excess of the worth
• If you want to release a student loan or similar kind of priority or non-releasable loans
• If there is any suit involved along with bankruptcy

Chapter 13 payment plan completion survey

Chapter 13 bankruptcy consists of a payment plan which lasts for 3-5 years depending on the amount of debt and the disposable income. The survey about how many people ended up dismissing the payment plan before the stipulated duration and how many people ended up completing the payment plan shows interesting results leaving us not much to pick between them. While 48% of people ended up completing their payment plan tenure, 52% of people were successful in dismissing the case before the tenure actually ended. By this stat, there is a small majority of people who ended up stabilizing their financial condition and cleared of all dues before their payment plan concluded. This could be an encouraging start.

Time factor

Time is another important aspect of the bankruptcy filing. The tenure or duration of payment plan is known by all, however, the time consumed to get the plan approved and the formalities of bankruptcy court can only be figured out by the people’s feedback who have gone through the whole process. While a large chunk of people about 58% confirm the whole process taking less than 3 months, you can be rest assured that under most circumstances, the process should not take more than 6 months. Adding 32% of readers contributing to 4-6 months range, it is about 90% of people who have got their payment plan and other Chapter 13 bankruptcy procedure done in less than 6 months. Under rare circumstances would you take over 1 year as the probability based on survey results is mere 4%.

Satisfaction degree

After the whole process, the ultimate thing that matters is the satisfaction level. The survey has thrown up mixed results and it is difficult to assess how successful Chapter 13 has been for our readers. While only 40% of people say they were satisfied with the Chapter 13 results, 16% maintain a neutral approach and 44% people, on the other hand, were dissatisfied. It could be that the whole process is slightly frustrating and expensive to their liking or readers think they ended up paying most of their debts, difficult to analyze possible repercussions of this survey results.

If you are looking forward to a smooth Chapter 13 bankruptcy experience with consistent and professional support, do get in touch with us at +1 888-297-6203.