Dealing with your ongoing financial problems can be a tricky issue.
You can be at
crossroads – whether to file for Chapter 7 or Chapter 13.
Both of these help. Chapter
7 wipes your qualifying debt in quick time making you free of medical bills,
personal loans, and pending credit card bills.
Chapter 13 is better
suited if you are financially better off and not eligible to file for Chapter
7.
Moreover it is a good
option if you want to keep your home and vehicle.
A Chapter 13 bankruptcy
lawyer in MD will tell you that Chapter 13 has several benefits not
available in Chapter 7.
You can:
·
keep all of your property
·
catch up on pending payments
·
minimize your car loan balance
·
pay off debts like domestic support
obligations
·
eliminate second mortgage, if any
But remember, you will
be eligible for all of above benefits only if you fulfill the separate
qualification requirements for each.
If you fail the Chapter
7 means test (a test that you must pass to qualify for Chapter 7), it
effectively means you have adequate income to repay at least some of your debts
via a repayment plan.
This is exactly how
Chapter 13 works.
You will pay a portion
of your debt through a 3-5 year plan.
The bankruptcy trustee
will disburse the money as per the terms of your repayment plan.
However, a Chapter
13 bankruptcy Maryland lawyer reminds you that you need not repay all
of your debts. The amount you will pay will vary depending on your income,
assets, and expenses. And, of course, the type of debt you have.
In all probability, you may be required to pay the greater of priority debts, nonexempt assets, and disposable income.
The United States Bankruptcy Code stipulates that you must meet the following criteria to qualify for Chapter 13.
You must not be a business entity.
·
You can file only as an individual or
jointly as husband and wife.
·
Businesses that are corporations and LLC
are not eligible for Chapter 13.
You are not disqualified by a prior
bankruptcy.
If you have already discharged
debt in a Chapter 7 within the last 4 years or Chapter 13 within the last 2
years, you will not be qualified for Chapter 13 until after a lapse of a
specified time.
Your filing for a Bankruptcy was not
dismissed within the previous 180 days.
You are not eligible
for Chapter 13 if your petition was dismissed for any of the following reasons.
·
You willfully violated a court order or
did not appear before court.
·
You requested that the court dismiss the
case after one of your lenders asked to the court to lift an automatic stay.
In addition to above,
you must also have fulfilled the credit counseling requirement; you have filed
your income tax returns, your proposed repayment plan repays all required debts,
and your debts are not too high.
If you are still in a
quandary whether Chapter 13 is the right answer for you, a Chapter 13
bankruptcy lawyer MD will answer all your queries.
