Chapter 13 Bankruptcy
Are you drowning in credit card debt? Have you had unexpected medical expenses? Do you worry about losing your house because you can’t make the payments? Maybe you have thought about bankruptcy, but don’t know where to start. Is Chapter 13 bankruptcy an option for you? A competent bankruptcy attorney can advise you of your options and help navigate you through the process.
An important part of the process is understanding which bankruptcy chapter fits your financial situation. If you are contemplating bankruptcy, contact the trusted Nevada attorneys at Anthem Bankruptcy Lawyers for a free consultation. Reach us online or at (702) 857-6000.
What Is Bankruptcy?
Federal bankruptcy laws were enacted to give honest debtors who were unable to pay their debts a “fresh start.” In Chapter 7 bankruptcy, a fresh start comes from discharging debt. This discharge releases the debtor from personal liability for debts after completion of the bankruptcy. Creditors can not collect on discharged debts.
The United States Bankruptcy Court administers bankruptcies under federal law. The following govern all bankruptcies:
- United States Bankruptcy Code,
- Federal Rules of Bankruptcy Procedure, and
- Local rules of the court in which the debtor files the case.
Under the Bankruptcy Code there are six types of bankruptcy cases, named for the chapters that describe them. Chapter 7 and 13 apply to consumer bankruptcy. Your individual situation will determine the type of bankruptcy case you file.
What Is Chapter 13 Bankruptcy?
Chapter 13 is an adjustment of debts of an individual with regular income. A Chapter 13 debtor
- is an individual (can be a sole proprietor),
- has regular income,
- owes outstanding debt to creditors, and
- believes he/she can repay such debt within a reasonable period of time.
The creditor is the individual or company to which the debtor owes money.
Under Chapter 13, a debtor either partially or fully repays debts through a repayment plan. This option may appeal to homeowners who have mortgage arrears and want to save their home from foreclosure. The repayment plan lasts three to five years. During the plan, you pay the Trustee all of your monthly disposable income and the Trustee pays your creditors. The Trustee is an officer appointed by the court who oversees your case. Upon successful completion of the repayment plan, your remaining dischargeable debts are eliminated.
Does Bankruptcy Eliminate All Debts?
There are several protected debts that bankruptcy usually does not eliminate, including:
- Child support
- Spousal support
- Most IRS taxes
- Student loans
- Court-ordered restitution
- Court judgments for injury or death as a result of a DUI
- Fraudulently incurred debts
Who Can File For Chapter 13 In Nevada?
An experienced bankruptcy attorney is the best person to advise you of whether you can file for Chapter 13 in Nevada. There are residency requirements that you must meet before you can file for bankruptcy in Nevada. There are also income and debt considerations that may determine whether Chapter 13 fits your situation.
The Means Test
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires every debtor to list their income in a “means test.” Your attorney can review the means test with you. If you cannot satisfy the means test, then you cannot file for Chapter 7 (and Chapter 13 may be your only option).
What If I Filed For Bankruptcy Before?
It is possible to file for bankruptcy even if you previously filed. Whether or not you are currently able to file for bankruptcy depends on a few factors including:
- How long ago you filed.
- Whether or not your case was dismissed.
- Whether or not you received a discharge in your case.
Your attorney can advise you on whether bankruptcy is currently an option for you.
Does Filing For Bankruptcy Cost Money?
Yes, filing for bankruptcy costs money. There are administrative fees associated with the bankruptcy process including filing fees and financial counseling fees. You must pay these fees prior to filing and your attorney can advise you of their amounts. If you hire an attorney, there are attorney fees.
Why File Chapter 13?
Whether you choose to file Chapter 13 will depend on your unique financial situation. There are several reasons that Chapter 13 may apply to your situation. An experienced bankruptcy attorney is the best person to advise you on whether Chapter 13 fits your needs.
The following are questions you may consider:
Are you a high income earner who cannot pass the means test?
Do you earn a regular income? Can you pay your regular monthly expenses? If so, can you partially or fully repay your debts through monthly payments to the Trustee?
Do you want to pay off back taxes, support obligations, and reduce or negotiate lower interest rates?
Are there assets that you want to keep?
If you are a homeowner you may choose to file Chapter 13 if you are:
In arrears and you want to mediate or pay arrears in the repayment plan.
Eligible to eliminate a second mortgage.
What Are Exemptions?
The Bankruptcy Code and Nevada law “exempt” certain assets from collection, allowing the debtor to keep the property even when filing for bankruptcy. Nevada Revised Statute 21.090 contains a list of Nevada exemptions.
Do I Need An Attorney?
Chapter 13 Bankruptcy is a complex legal process that has long-term financial and legal consequences. It is possible for an individual to file for bankruptcy without an attorney. However, a qualified bankruptcy attorney, such as those at Anthem Bankruptcy Lawyers, can answer your legal questions and provide advice specific to your situation. Remember to seek the advice of an attorney licensed to practice in your bankruptcy court. Anthem Bankruptcy Lawyers are Nevada licensed attorneys with experience in bankruptcy court.
What Financial Documents Will I Need?
Your individual situation will determine what financial documents you will need to provide for your attorney to review. To assess your situation, your attorney may request that you provide the following:
- Proof of income for the past six months.
- Financial (bank and credit card) statements for the past six months.
- Tax returns or tax transcript for the last two to four years. You can obtain a tax transcript request form from the IRS.
- Copies of any pending complaints and legal judgments against you (including divorce decrees).
- Credit reports
Expense records (example bills)
Your attorney may also provide you with forms to list your assets, creditors, and debts.
Do I Need To Attend Financial Counseling?
Your attorney will advise you of what steps you need to take prior to filing for bankruptcy. A Chapter 13 plan requires financial counseling.
180 days before filing, you must obtain a Certificate of Compliance by attending credit counseling through a Department of Justice approved credit counseling agency. The Department of Justice provides a list of approved credit counseling agencies.
Before your debts are discharged, you are required to attend a personal financial management instructional course by an approved provider. The Department of Justice provides a list of approved providers.
Hire a Las Vegas Lawyer Before You File for Bankruptcy
Award-winning Las Vegas Anthem Bankruptcy Lawyers is a team of experienced, dedicated bankruptcy lawyers and case managers based in Henderson, Nevada. We serve clients in Henderson, Las Vegas, North Las Vegas, Summerlin, and Clark County. With over 25 years of experience, Anthem Bankruptcy Lawyers specialize in bankruptcy law cases. Fill out a form today for a free consultation.