What Does it Mean to File Chapter 13 Bankruptcy?
When you are falling behind on debts and you feel pressured by your creditors to meet the payment deadlines, you may find yourself left with the only option left, filing for bankruptcy. There are different types of bankruptcy called chapters and each is filed for different reasons. Chapter 13 bankruptcy comes with certain options that other forms of bankruptcy do not come with. Knowing when you can file for chapter 13 bankruptcy, what you can use this type of bankruptcy for, and how to file for chapter 13 bankruptcy can help you make the best decision for your situation. Talk to a Las Vegas bankruptcy lawyer to learn more.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is known as a wage earner’s plan for bankruptcy because this type of bankruptcy allows you to file for bankruptcy when you still have your job. The main requirement is that you are currently earning a basic income and have debts you need to repay. You have the option to pay part of the debts you owe or all of your debts within a specified period of time.
The period of time can last three to five years depending on whether the income you receive each month from your job exceeds the state median. When your income is higher than the state median, you will be given five years to pay back your debt and three years if your income is lower. However, you may not be able to file for chapter 13 bankruptcy unless you meet the following requirements:
- Your unsecured debts must not be over $394,725
- Your secured debts must not be over $1,184,200
- You must have undergone credit counseling
- You must not have failed to show up or cooperate with the court or court orders (within last 180 days)
- You were dismissed in bankruptcy court by creditors (within last 180 days)
How Do I File for Chapter 13 Bankruptcy?
You may be wondering what steps you need to take to file for chapter 13 bankruptcy. Filing for chapter 13 bankruptcy starts with determining your eligibility. This can be done on your own, but if you find yourself unsure, you can always consult with one of our bankruptcy attorneys for help. After this, the first step is to file a petition with your local bankruptcy court and then file a schedule of:
- Executory contracts
- Assets and liabilities
- Your current income and expenditures
You will also have to submit your proof of credit counseling with a certificate and an official statement of financial affairs. Recent tax returns will also be needed.
Contact a Nevada Bankruptcy Attorney
Taking all the steps necessary to file for chapter 13 bankruptcy is not impossible to take on alone, but comes with its own risks without legal guidance. Reaching out to one of our Nevada bankruptcy lawyers means you will have a fighting chance. Not only will we investigate your situation, but we will work hard to help you repair your finances. Call the Aaron Law Group today at (702) 550-1111 for a free consultation. We are located in Las Vegas, Nevada.