We Can Help You File for Chapter 13 Bankruptcy in Missouri and Kansas
Excessive debt can have a negative impact on your life or business. Creditors could seek a judgment to garnish your wages or seize your assets if you fall behind on your debt obligations. Bankruptcy is a debt relief option that can help you discharge debts and catch up on other debts like mortgage payments, vehicles payments, taxes and child support. Chapter 13 bankruptcy may be an option for debt relief if you have a regular income.
Our experienced Kansas City bankruptcy attorneys can help you file for Chapter 13 bankruptcy in Missouri or Kansas. Below, our attorneys answer some of the most common questions we receive about Chapter 13 bankruptcy.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is sometimes referred to as a “wage earner’s plan” because of the income requirement to file a case. However, you do not need income from a job to file Chapter 13 bankruptcy. You need sufficient income to cover your repayment plan.
An automatic stay goes into effect after filing a bankruptcy petition with the court. For as long as the automatic stay is in effect, creditors cannot sue you, garnish your wages or otherwise take your property.
Can Business Owners File for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a debt relief option for individuals. However, certain types of business owners may still be able to file a case. If you are a sole proprietor, then you may discharge business and personal debts upon finishing a Chapter 13 repayment plan.
You may also protect your assets with bankruptcy’s automatic stay and exempt some business assets up to a certain dollar amount.
How Does Chapter 13 Bankruptcy Work?
In a Chapter 13 bankruptcy, you pay back your debts in a bi-weekly or monthly repayment plan. The Trustee assigned to your case takes and distributes these payments to your creditors. Upon completing the plan, you may receive a discharge of unsecured debts, usually paying less than you would have without bankruptcy.
Certain debts have higher priority than others. In a Chapter 13 bankruptcy, you must pay back your priority debts, such as child support or certain taxes.
Secured debts may include assets like a home or vehicle. These are assets backed by collateral. Unless you surrender the property, you will pay these debts during your repayment plan.
Unsecured nonpriority debts may include medical, credit card and utility bills. These are typically not paid back as part of a Chapter 13 case, depending on your income.
How Long Does Chapter 13 Bankruptcy Take?
The length of a bankruptcy case depends on your personal circumstances. Chapter 13 repayment plans can last between three to five years, depending on your ability to pay and income compared to the state’s population.
Some Chapter 13 cases fail because filers do not make payments. You could potentially enroll in automatic payments with your bank. By enrolling in automatic payments for a Chapter 13 plan, you may make the repayment process easier on yourself.
Am I Eligible for Chapter 13 Bankruptcy?
There are eligibility requirements for Chapter 13 bankruptcy. You need sufficient income to pay back your debts during a three to five-year repayment plan.
In addition, you must meet the debt requirements for Chapter 13 bankruptcy. These requirements change every few years. As of 2019, you cannot file a Chapter 13 case if you have $419,275 or more in unsecured debts or $1,257,850 in secured debts. You can find more information about the debt limits on the Federal Register.
Your tax filings must also be up to date to file a case. Specifically, you must provide tax documentation going back several years.
Are There Advantages to Chapter 13 Bankruptcy Over Chapter 7 Bankruptcy?
It depends on your situation. For some filers, Chapter 7 bankruptcy may be the best or sometimes only debt relief solution. However, the benefits of Chapter 13 bankruptcy include:
- You may be able to stop a foreclosure sale from proceeding.
- You can pay back your past-due mortgage payments during your repayment plan.
- In some cases, you may be able to wipe out a second mortgage on your home in a process called lien stripping.
- If you have vehicle payments and are eligible for a Chapter 13 cramdown, you may be able to reduce your outstanding balance.
- You can pay back tax debt at no interest.
We strongly encourage you to speak with our Kansas City bankruptcy lawyers to learn more about the benefits of Chapter 13 bankruptcy. During a consultation, our attorneys can help you create the most effective debt relief plan for your situation.
What Are the Steps in a Chapter 13 Bankruptcy?
Our Kansas City bankruptcy attorneys can help you with the Chapter 13 filing process. During the process, our attorneys help with the following steps.
- Filing your bankruptcy petition. We will help you file the financial paperwork with your bankruptcy petition. Paperwork may include an accounting of your assets and debts, current income and expenses, and a statement of your financial affairs.
- Gathering additional paperwork. Prior to your case, our attorneys will assist you in gathering documents that include prior tax returns, a credit counseling certificate, pay stubs, bank statements, and a statement of your net income and expenses.
- Creating a debt repayment plan. Our attorneys will work with you to create a Chapter 13 repayment plan. We will submit the plan to the court for approval.
- Attending the 341 meeting of creditors. You and the Trustee must have a meeting with your creditors after we file your bankruptcy paperwork. During the meeting, the Trustee and creditors will ask questions about your finances and bankruptcy case. Our attorneys can represent you during the 341 meeting of creditors.
Your payment plan will start within 30 days of filing your Chapter 13 case, which will give you time to be able to make the first monthly payment.
Contact Our Kansas City Bankruptcy Attorneys for More Information
The Kansas City bankruptcy attorneys at Troppito Miller Griffin, LLC can help you file Chapter 13 bankruptcy in Missouri and Kansas. You can schedule a free consultation with us by dialing (816) 221-6006 or by using the confidential contact form on our site.