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Chapter 13 Bankruptcy in Phoenix
Phoenix Bankruptcy Chapter 13 Attorney
Filing Chapter 13 BK in Maricopa County
PHOENIX CHAPTER 13 BK FREQUENTLY ASKED QUESTIONS
Our Phoenix Chapter 13 Bankruptcy Attorneys answer many of the most asked questions that people in Maricopa County have about declaring chapter 13 bankruptcy. In the Phoenix Metro Area there are many people who run against hard times and need a “Fresh Start” to get back on track financially. The lawyers in our Phoenix based bankruptcy firm assist hundreds of people yearly with debt relief actions including filing Chapter 13 bankruptcy. Contact our office today for a consultation. (480) 262-1699. Both the consultation and the advice are free of charge. Also, please know that our consultations are 100% confidential.
ANSWER:
Chapter 13 bankruptcy reorganizes your debts into a payment plan based on how much disposable monthly income you have. Your payment plan will be 3 years if your income is below the state median income line for your family size. If your income is above that line, your Chapter 13 payment plan will last 5 years. A government attorney known as a trustee will be appointed to your case to review your petition, distribute payments to your credits, and more. You will be protected from your creditors taking actions such as repossession, foreclosure, and wage garnishment while your case is pending due to the Automatic Stay. If you make your payments and comply with other applicable bankruptcy requirements, the Automatic Stay will protect you for the length of your payment plan.
ANSWER:
Most tax debts are priority debts, meaning they are a third-tier debt that must be paid in full in a Chapter 13 payment plan. If your tax debts have been due for three years, filed for two years, assessed at least 240 days prior, and no fraud was involved in their filing, they will be nonpriority debts. Nonpriority debts are in the fourth tier of debts in Chapter 13 bankruptcy, and don’t need to be paid in full to be discharged if the debtor doesn’t have sufficient disposable monthly income. Bankruptcy allows the debtor to catch up on their taxes in payments tailored to fit their budget, while protected from creditor collection methods like garnishments and bank levies.
ANSWER:
A Repayment Plan is the reorganization of your debts into payments you can afford based on your disposable monthly income. Your debts will be organized into four different tiers, which are paid in order throughout your plan. The first tier of debts are fees to your bankruptcy trustee and attorney. The second tier is secured debts, or debts that have property attached as collateral. Any balance in arrears on a secured debt must be paid in full in your payment plan. Your auto loan must also be paid in full in your bankruptcy plan. Third are priority debts, which include domestic obligations, employee wages, and most taxes. The last tier of debts are unsecured, nonpriority debts. These debts can be discharged at the end of your payment plan, even if the balance isn’t fully satisfied. Common fourth tier debts include credit cards, medical bills, deficiency balances, and unsecured personal loans.
ANSWER:
Your payment plan will last either three or five years depending on how your income compares to your state’s median income. In Arizona, the median annual income for an individual is $52,319. This increases to $65,713 for a family of two, $71,704 for a family of three, and so on. If you are married, your spouse’s income will be combined with yours. If your income exceeds the state median, your plan will be 5 years. Otherwise, your payment plan will last 3 years.
ANSWER:
For the most part, student loans can’t be discharged in bankruptcy. Your student loans will be paid along with the rest of your fourth tier debts in your payment plan. Unlike other fourth tier debts, any remaining balance at the end of your payment plan won’t be discharged. Your student debt will continue to accrue interest during your bankruptcy. However, bankruptcy provides the benefit of protection against wage garnishment due to your student loans.
ANSWER:
After filing bankruptcy, you are disqualified from obtaining a home loan for 2 years. However, because Chapter 13 lasts 3-5 years, you may still be in your bankruptcy when you become eligible for a home loan again. If you wish to purchase a home while your Chapter 13 bankruptcy is still active, you will need the court’s approval first. Your payment plan will need to be reviewed to make sure that you have sufficient income for any changes in your payment plan.
ANSWER:
PHOENIX CHAPTER 13 LAWYER
How a Chapter 13 bankruptcy can benefit your financial debt situation:
Every Chapter 13 Bankruptcy case in Phoenix is unique in itself. There are many factors and variations to a Ch 13 BK. Thus, having an experienced Phoenix Chapter 13 Bankruptcy Lawyer will benefit you as they can assist with making sure that you are filing the proper Chapter of Bankruptcy for the filers financial debt situation.
Often, the reason why many people in Phoenix decide to file a Chapter 13 vs. a Chapter 7 bankruptcy is because it allows individuals to keep all their property, including non-exempt assets.
However, in order to qualify for Chapter 13 bankruptcy, you must demonstrate that you have a steady income in order to pay back a portion of your debts as agreed upon in a repayment plan. (Usually 3-5 years). Because of this Ch 13 Repayment plan, the bankruptcy can become very complex.
Declaring Chapter 13 bankruptcy in Phoenix, Arizona can help put an end to your downward financial spiral by:
- Stopping lawsuits and garnishments filed by creditors.
- Chapter 13 buys you more time to service your debts.
- Filing will stop collection actions on your Student Loans.
- Preventing foreclosure on your unsold home.
- Returning your repossessed vehicle to you.
- Ch 13 allows you to keep your car.
- Ch 13 in Phoenix allows you to keep your home.
- Resolving tax problems and back taxes.
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