Chapter 13 Bankruptcy Lawyers in Philadelphia
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Filing for Chapter 13 in Philadelphia? Avoid the Stress by Working with the Best Attorneys in Town!
Filing for a Chapter 13 Bankruptcy allows applicants to create a plan for paying off their debts over a three-to-five-year time frame. For many, filing for a Chapter 13 bankruptcy appears confusing. In addition, many of our clients are concerned about keeping their homes and vehicles. If you have questions about filing for Chapter 13 bankruptcy, whether you qualify, and what the process will look like, the attorneys at Cibik Law are here to guide you through the process.
Chapter 13 Bankruptcy Lawyers Serving Center City, Bucks, Montgomery, and Delaware Counties
The Chapter 13 bankruptcy lawyers at Cibik Law have helped over 18,000 clients successfully file for bankruptcy and move forward with a clean slate. We are dedicated to providing our clients with bankruptcy and non-bankruptcy solutions that work for them and help them handle their debt problems.
Learning the Definitions: What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcies are often called reorganization bankruptcies. Chapter 13 bankruptcies are frequently used to stop mortgage foreclosure or lower the applicant’s overall monthly expenses. When an applicant files for Chapter 13 bankruptcy, he or she can repay mortgage arrears and begin to repay unsecured debt. At the end of the Chapter 13 bankruptcy process, most of the applicant’s unsecured debts will be eliminated, and he or she can begin with a fresh financial start.
What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?
Chapter 7 bankruptcies are called liquidation bankruptcies because the bankruptcy trustee will liquidate or sell the applicant’s assets to pay off debt. In a Chapter 7 bankruptcy, the applicant will not need to make monthly payments over three to five years. Instead, the trustee will liquidate the applicant’s assets, pay off as much data as possible, and then wipe out the remaining debt at the end of the process.
In Chapter 13 bankruptcies, the applicant must keep paying their balances according to the court’s instructed repayment plan. After the plan is completed, the court will typically discharge all unsecured debts. There are also different eligibility requirements, and many people who do not qualify for a Chapter 7 bankruptcy choose to file a Chapter 13 bankruptcy.
Knowing the Steps: The Process of Filing for Chapter 13
There are many steps to filing for Chapter 13 bankruptcy. First, you will meet with your Chapter 13 bankruptcy lawyer. Your lawyer will ask you questions about your financial situation and review your financial documents. Once your documents are in order and there are not any issues that threaten your ability to get a discharge of debts, we will help you take the following steps:
- File for bankruptcy in a Philadelphia bankruptcy court
- The court will issue an automatic stay
- Your creditors will receive notice from the court that they cannot contact you or pursue debt until this day is left a door the bankruptcy is finalized
- The bankruptcy trustee will work with you to create a repayment plan
- You will attend your 341 Meeting of Creditors with your lawyer
- The trustee and creditors will approve or object to your repayment plan
- You must complete your financial education course
- Make play payments to the trustee for the next three to five years
- Complete the payment plan
- The court will issue the final decree of Chapter 13 bankruptcy
The Role of the Chapter 13 Bankruptcy Trustee
The bankruptcy trustee is appointed by the bankruptcy court to oversee the administration of your reorganization plan. The trustee will review your bankruptcy paperwork, review your proposed plan for repayment to make sure it complies with bankruptcy laws, and collect your payment. That trustee will also distribute funds to creditors and carry out the terms of the chapter 13 plan.
What are the Requirements for Filing Chapter 13 Bankruptcy?
Only individuals, not businesses, can file for Chapter 13 bankruptcy. Applicants cannot have filed a prior Chapter 13 bankruptcy within the last two years or a Chapter 7 bankruptcy within the last four years. Additionally, a debtor cannot file for Chapter 13 or Chapter 7 bankruptcy when:
- Their previous bankruptcy petition was dismissed in the last 180 days, or
- They willfully violated a court order or failed to appear before the court
- Or they requested that the court dismissed their case after a creditor asked the court to lift an automatic stay.
Applicants must have filed their income tax returns and cannot have debts that are too high. Individual debtors must have less than $419,275 in unsecured debts and less than $1,257,850 in secured debts. There are no income limits in Chapter 13 Bankruptcy as there are in a Chapter 7 bankruptcy. However, you will need to show that you have enough income to make your monthly debt payments. If you are unsure whether you qualify for Chapter 13 bankruptcy, one of our experienced bankruptcy lawyers can help review your situation and advise you of your legal options.
Chapter 13 Bankruptcy: Can I Pay One Debt Better Than Others?
Everyone with debts has at least one bill they’d like to pay, even if they can’t pay them all. So if you are already filing Chapter 13 bankruptcy and repaying some debt, why not treat some better than others?
Sometimes that is allowed and sometimes not. It’s a complicated issue because, at the heart of the Chapter 13 plan, there is a pool of money – the payments you make – which has to be divided among creditors. If one is paid more, others get less typically. So favoring one means discriminating against others.
The law requires some discrimination. For example if you aren’t paying everyone in full, then you typically have to provide for special “priority” claims to be paid in full. These are things the government has a special interest in – paying the trustee, child support, recent taxes and so on.
In other cases, like your home and car, the law often allows payment of these “secured” debts in preferential ways over your other debt because you need those assets to keep going (and putting the money into the pot each month!).
But what if the debt is one you can’t wipe out at the end of the typical case, like student loans? Can you pay those in full and “short change” the other debts you can wipe out? Sadly, there are only limited ways to do that because it gives you a “head start” not a “fresh start” at the end of your case, according to some.
So arguing that your sister’s loan to you deserves special treatment because she’s been good to you probably won’t fly. But all is not lost. If paying the debt with special treatment is necessary to keep your case afloat or otherwise earning income, then it might be better received by the court. So some judges have allowed restitution and some business-related debts to be paid preferentially, recognizing that going to jail or having to close your business down is counterproductive to getting anyone paid well.
How Long Do Chapter 13 Bankruptcies Last?
Most Chapter 13 repayment plans last between three and five years, depending on the applicant’s income and how much time she needs to pay off the debt. In most cases, if you would have qualified for a Chapter 7 bankruptcy but chose to file a Chapter 13 Bankruptcy, the plan will last three years. However, if you do not qualify for a Chapter 7 bankruptcy, your repayment plan will probably last five years.
Call the Chapter 13 Bankruptcy Lawyers at Cibik Law Today
Our legal team is proud to help hard-working Pennsylvania residents get out of debt and get started on the path to a new financial future. We have successfully represented many clients in Philadelphia, Center City, and Bucks, Montgomery, and Delaware Counties. We understand that the thought of filing for bankruptcy can be overwhelming; we offer our clients a free initial consultation to discuss their options with one of our experienced Chapter 13 bankruptcy lawyers. Contact us today to schedule your free initial consultation.
