Arizona Chapter 13 FAQs
Arizona Chapter 13 FAQs
After a person has accumulated significant debt that he cannot pay, he may consider the relief that bankruptcy can offer. However, it often is difficult to determine what type of bankruptcy to file. Chapter 13 offers an individual the opportunity to reorganize existing debt, including the discharge of certain types of debt, through a repayment plan that is negotiated with creditors. Some of the Arizona chapter 13 FAQs that a person may have about whether or not to file a Chapter 13 include:
What is Chapter 13?
A Chapter 13 bankruptcy is a type of debt relief that is afforded by the federal United States Bankruptcy Code. It involves a negotiated repayment plan where the debtor agrees to repay some or all of his debt over a period of three to five years. By negotiating with creditors, a person is able to formulate a plan with affordable payments. The Chapter 13 protects a person by eliminating the accrual of interest and penalties. At the conclusion of the plan time period, the dischargeable debts are deemed satisfied and the debtor can move forward without further liability. As this is overseen by a bankruptcy trustee and enforceable in court, it offers more certainty than negotiating with creditors outside of bankruptcy.
Why is a Chapter 13 right for me?
When a person has secured assets that he wants to retain or non-exempt property that he does not want to liquidate as part of a Chapter 7 bankruptcy. In addition, a person may not be eligible to file a Chapter 7 bankruptcy because income exceeds the limits for such an action. A person also may not be able to file a Chapter 7 if he has previously filed one within the last eight years. A skilled bankruptcy attorney will be able to explain the nuances between Chapter 13 and Chapter 7 bankruptcy actions.
Arizona Chapter 13 FAQs – Is a Chapter 13 plan a formal agreement?
Yes. This is a written document that details all the debt that will be repaid, the amount of money that will be paid to each creditor, and the timing of the payments. The payments are made to the designated bankruptcy trustee and then distributed to the creditors so that there is oversight over compliance with the agreement. The court must approve the plan before it is put into effect and creditors may file objections to the plan, which must be resolved by the court.
Arizona Chapter 13 FAQs – Will a Chapter 13 bankruptcy allow me to keep my home?
Often, a person will file for bankruptcy when he is behind on mortgage payments and there is a risk of foreclosure. The homeowner sits down with his creditors and determines whether there is adequate income to make payments on overdue debt while continuing to make current payments. If a payment plan is manageable, then the details are worked out and the homeowner may keep his home. Under Illinois law, a foreclosure takes seven months or more after a foreclosure action is commenced. However, it is a good idea to consult with a bankruptcy attorney as soon as possible after determining that it is not going to be possible to catch up on delinquent debt without help.
Arizona Chapter 13 FAQs – How can an attorney help with a Chapter 13 bankruptcy case?
There are many different steps involved in a Chapter 13 bankruptcy petition and case, including obtaining approved credit counseling prior to filing a bankruptcy case. An attorney can assist with the following:
Help a debtor gather all necessary documents;
Prepare the petition;
Appear with the debtor in court;
Make court appearances on behalf of the debtor;
Assist in the preparation of a budget to determine reasonable payments;
Draft the Chapter 13 plan and have it approved;
Respond to any objections; and
Obtain the discharge of debt at the conclusion of the plan period.
If you live in the Chicago area, a skilled Illinois bankruptcy attorney is ready to assist you with learning about your options and preparing the bankruptcy filing that is right for you. Call AZ Debt Relief Group, PLLC at (602)-466-9631 to schedule an appointment. Often, we can answer many of your initial questions over the telephone.