Understanding the basics behind filing a chapter 13 Bankruptcy in Arizona
[tabby title=”How Much Does It Cost?”]The initial bankruptcy consultation Buy kamagra without a prescription is completely free. For the most part, a Chapter 13 bankruptcy in Mesa will cost you more because of the amount of work you and I will be going through to get your discharge. However, the advantage is that you can pay most of your attorney fees through your plan! I only require a deposit in order to get your case started and pay the required filing fees. During your initial consultation we will discuss the fees involved if you decide to continue.
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A typical Chapter 13 bankruptcy plan lasts from 36 to 60 months, depending on the individual’s income, and amount of debt to be reorganized.
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In order to be eligible to get relief under Chapter 13 bankruptcy in Mesa, you must have a regular and steady income. Wage-earners, self-employed business owners, and even retirees with steady pensions will qualify for a Chapter 13 bankruptcy in Arizona.
There is also a debt limit to qualify for Chapter 13. Only individuals with unsecured debt of less than $360,475, and secured debt of $1,081,400 are eligible to file a Chapter 13 bankruptcy case in Mesa.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy in Arizona is a payback plan, where the applicant can pay back mortgage arrears, car loans and certain taxes while being protected from foreclosure and repossession. The Chapter 13 bankruptcy applicant makes a monthly payment to a Chapter 13 Trustee, who divides the payments between creditors according to class. The monthly payment amount is determined by figuring income vs. allowable expenses, and should be affordable for the applicant every month.
Why Do I Need a Law Firm to File Chapter 13 Bankruptcy?
If you have fallen behind on house payments and are in danger of losing your Mesa home to foreclosure, a Chapter 13 Bankruptcy Plan gives you an opportunity to make up those missed payments over years. Also, non-dischargeable debt, such as child support or certain taxes, can be repaid with no interest. Car loans can also be paid through a Chapter 13 bankruptcy, and in some cases where the vehicle is worth less than what is owed, the car can be paid off by simply paying only the value of the car. Chapter 13 is also a useful way to gain bankruptcy protection for those ineligible to file a Chapter 7 because of higher income.
What debts must I pay?
Any past-due child support must be paid in a Chapter 13 bankruptcy plan, and paying back certain tax liabilities is also mandatory. Also, to save a house from foreclosure, you must repay all missed mortgage payments. Car payments may be made through the Plan, as well. Other debts, such as unsecured credit cards, medical bills, and certain judgments, are paid back only if the applicant can afford to pay. Oftentimes this means that unsecured creditors are not paid at all. If payments are made according to the plan, these unsecured debts will be discharged, similar to a Chapter 7 “Fresh Start.”
“Cram Down” Feature
As part of a Chapter 13 bankruptcy plan in Mesa, Arizona, we can cram down vehicle loans and some other secured debt. If your car loan is more than 2 ½ years old, and you owe more than your car is worth, you would pay only the value of the car back to the lender, and treat the balance of your car loan as unsecured. For example, if you owe $20,000 on your car which has a value of $12,000, we would arrange to pay back $12,000 through the Chapter 13 Plan, and treat the remaining $8,000 as unsecured debt to be paid back with other unsecured debt, or perhaps not at all.
You can also cram down any personal property that has a secured loan against it, such as furniture, jewelry or electronics. The debt must be over 1 year old in order to qualify for this feature.
Strip off Unsecured Second Mortgages
Lien stripping allows you to get rid of the “wholly unsecured” liens on your property. In many cases, if you owed more on your first mortgage than the fair market value of your house, your second mortgage lender will not receive anything from a foreclosure sale because there will be nothing left over after the first mortgage is paid. If the lender won’t get any money if your house is sold, your second mortgage is considered “wholly unsecured” and can be stripped through a Chapter 13 bankruptcy.
For Example. Say you own a house worth $250,000 and you have a $325,000 balance on your first mortgage. In this case, you can strip any junior liens to your first mortgage. So, if you had a second mortgage with a balance of $100,000, you can get rid of it through lien stripping in a Chapter 13 bankruptcy.
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