Chapter 13 Bankruptcy Attorney in El Dorado, Arkansas

Chapter 13 bankruptcy is a powerful debt relief option that allows qualifying debtors to reorganize and repay certain debts. Individuals who file for bankruptcy under Chapter 13 can bounce back from overwhelming debt and get the fresh start they need.

That is why you must discuss your circumstances with a skilled bankruptcy attorney who will help you identify the debt relief options available in your particular case so that you can make an informed decision about how to resolve your debt.

The Chapter 13 bankruptcy attorney at Rushing Law Firm, PLLC, helps clients navigate the process of filing for bankruptcy and get out of crushing debt. We are committed to helping clients in El Dorado, Arkansas, and throughout Ashley, Columbia, Ouachita, and Union counties achieve financial stability.

What You Need to Know
About Chapter 13 Bankruptcy

Also called a “repayment plan,” Chapter 13 bankruptcy allows individuals who accumulated significant debt to develop a plan to repay all or part of their debt. Chapter 13 bankruptcy is a common debt relief option that allows debtors to protect themselves from creditors, retain assets, and set up a repayment plan.

However, filing under Chapter 13 is not available to everyone. Debtors are eligible to file for Chapter 13 bankruptcy if they have enough income to stick with the repayment plan, which can last from three to five years, and their qualifying debt does not exceed certain limits.

Here are a few things you should know about Chapter 13 bankruptcy before declaring bankruptcy:

1. When is filing under Chapter 13 a good option? Those who are not eligible for Chapter 7 bankruptcy may consider filing under Chapter 13. However, even if a debtor qualifies for Chapter 7, filing for Chapter 13 bankruptcy may be a better alternative, depending on their circumstances. Many people who are behind on mortgage payments choose to file under Chapter 13 in order to keep their homes.

2. What does Chapter 13 bankruptcy cover? Filing for Chapter 13 bankruptcy allows a debtor to discharge unsecured debt, including medical bills, utility bills, personal loans, credit card debt, and many more. Depending on the type of debt, it can either reduce or eliminate payments.

3. What doesn’t Chapter 13 bankruptcy cover? Certain types of debts cannot be discharged when filing for bankruptcy under Chapter 13. Non-dischargeable debts include debts arising from child support or alimony obligations, certain tax debts, criminal penalties, fines owed to government agencies, and debts arising from the debtor’s malice or willful conduct.

If you still wonder if Chapter 13 bankruptcy is the right solution to resolve your debt, speak with an experienced attorney at Rushing Law Firm, PLLC, to discuss your unique situation and understand your options.

Who Qualifies for Chapter 13 Bankruptcy?

As mentioned earlier, not everyone is eligible for debt relief under Chapter 13. Debtors qualify for Chapter 13 bankruptcy if two conditions are met:

• They make enough income each month. Since filing for Chapter 13 bankruptcy requires you to make monthly payments under their repayment plan, your income must be sufficient to cover plan payments and basic living expenses. Those whose income is not sufficient or not steady may not be eligible to file under Chapter 13.

• Their debts do not exceed certain limits. A debtor does not meet eligibility requirements to file for Chapter 13 bankruptcy when their debts exceed a certain limit. According to the official website of the U.S. Courts, Chapter 13 filers cannot have more than $394,725 in unsecured debts and $1,184,200 in secured debts to qualify for bankruptcy under the chapter.

There are many advantages of filing for Chapter 13 bankruptcy, including the potential to avoid home foreclosure and car repossession. While Chapter 13 bankruptcy allows a debtor to keep certain assets and reorganize their debts, declaring bankruptcy still requires careful consideration. At Rushing Law Firm, PLLC, we offer free consultations to help debtors facing overwhelming debt understand their options for seeking relief and getting back on their feet. 

The Process of Filing Under Chapter 13

There are many steps involved in the process of filing for bankruptcy under Chapter 13, including:

1. A credit counseling course. Chapter 13 filers must complete a credit counseling course within six months before filing the bankruptcy petition.

2. Bankruptcy petition. The second step involves filling out and filing a bankruptcy petition and a proposed repayment plan, along with tax returns and other forms.

3. The appointment of a bankruptcy trustee. The court will appoint a trustee to oversee and administer your bankruptcy case.

4. The automatic stay. When you file your papers for Chapter 13 bankruptcy, the automatic stay will take effect, prohibiting creditors from trying to collect the debt or seize your property.

5. Meeting of creditors (341 hearing). You must attend the meeting of creditors presided over by the appointed bankruptcy trustee.

6. Confirmation hearing. The next step is to attend the confirmation hearing, during which the judge will determine if your plan meets Chapter 13 requirements.

7. Make payments and comply with plan requirements. You must make your monthly payments under the repayment plan on time until the repayment period ends and the court closes your bankruptcy case.

The process of filing for bankruptcy under Chapter 13 can be complicated. That is why you need to speak with an experienced bankruptcy attorney to help you navigate the process and protect your best interests.