How a Lexington Chapter 13 Bankruptcy Attorney Can Help You
Many people think that they could file Chapter 13 Bankruptcy on their own. While technically true, there are many benefits to hiring Chapter 13 bankruptcy attorneys. Besides having the knowledge and expertise so you can the most of your filing, a Lexington Chapter 13 bankruptcy lawyer can help in the following ways.
- Bankruptcy Alternatives – A Chapter 13 bankruptcy lawyer can provide other options. Other options can include a debt-relief program, or your attorney can negotiate with your creditors to make your payments lower.
- Less Stress – A lawyer can relieve the stress of dealing with creditors wanting their money. Lawyers can handle the minute details so you can focus on what is important, like your family and job.
- Less Paperwork – Filing for Bankruptcy entails a lot of paperwork. You have to file numerous documents the right way and on time. An experienced Chapter 13 lawyer knows how to fill out documents correctly and plead your case in front of a judge.
- Help Keep Your Home – Chances are, you are behind in your mortgage payments. If it has not yet gone into foreclosure, a Chapter 13 bankruptcy attorney can help develop other solutions so that you can hopefully stay in your home.
- Saving You Money – Since you are already under financial stress, you may be deciding whether or not to hire a lawyer, which comes with attorney’s fees. However, hiring a lawyer can help you save money in the long run by getting you the best possible settlement with creditors.
- Relationships with Legal Authorities – An experienced Chapter 13 bankruptcy lawyer, especially one in Lexington, knows the judges and other legal personnel at the court. They also have a working relationship with trustees, which may help your case in the long run.
You should not go through the process of Chapter 13 bankruptcy on your own. Let experienced lawyers guide you through the process and fight for your rights. Filing for Chapter 13 bankruptcy is a big decision. Do not make that decision without a knowledgeable expert to help.
Why You Should Hire Bunch & Brock for Your Lexington Chapter 13 Bankruptcy Attorneys
There are a lot of Chapter 13 bankruptcy lawyers in Lexington. You will want to hire a law firm with the knowledge and experience to get the job done. Some of the reasons to hire Bunch & Brock include:
- You will always deal with an attorney. You will not get pawned off on a paralegal or a legal secretary.
- We have been in business helping the people of Lexington and central Kentucky for over 45 years.
- Most of our staff were born and bred in Lexington and central Kentucky, so we know the issues that citizens in our area face. We are one of you.
If you are in need of Chapter 13 bankruptcy advice, give Bunch & Brock a call today at 859-254-5522.
Summary of Chapter 13
Often called “wage earner” bankruptcy, Chapter 13 bankruptcy is for people with a steady income source but may be overwhelmed by debt payment obligations. Falling behind on mortgage payments is a common scenario in this circumstance. One of the most significant benefits of filing for Chapter 13 is that it halts foreclosure proceedings and offers a chance to keep your family in your home. It removes the threat of upheaval and eliminates the need to find a different place to live.
Chapter 13 bankruptcy allows you to repay a portion of your debt via a court-approved repayment plan. Following the successful completion of the repayment plan, all remaining eligible debt is discharged. This means some credit card debt, department store debt, and loans will be eliminated.
Advantages of Chapter 13 Bankruptcy
When you file for Chapter 13 bankruptcy protection, you immediately end the litigation, wage garnishment, and other forms of harassment. You can take time to assess your situation and focus on restructuring debt. Working with a Chapter 13 attorney allows you the opportunity to repay your debts under better conditions and at lower interest rates.
If you have missed payments and are at risk for foreclosure, Chapter 13 allows you to catch up. Reorganization allows you to keep your home and other property, including nonexempt assets like collectibles and recreational vehicles.
What to Expect from Bankruptcy?
The focus of Chapter 7 bankruptcy is the liquidation of assets, which means a court-appointed Trustee sells all of your nonexempt property to pay creditors. Chapter 7 is for individuals and business owners who need more disposable income (and assets) to qualify for Chapter 13. After a Chapter 7 case is discharged, all qualifying debts are dismissed; some receive nothing if there is not enough to pay all creditors off.
In contrast, Chapter 13 is a “reorganization” bankruptcy, which provides relief from creditor harassment while you determine a workable payment plan. The goal is to allow you to keep your property and let creditors collect at least a partial repayment. In some cases, you can reduce the balance on an upside-down home or car loan to the property’s current market value. Discharging a second or third mortgage lien against your house is also possible.
Satisfying a Repayment Plan
In a Chapter 13 bankruptcy, you agree to a payment plan that includes reimbursing unsecured creditors with a sum determined to be equal to the value of the asset. Examples of unsecured creditors are companies that do not hold a deposit or lien on your house or title to your car. (This includes credit cards, loans used to purchase furniture, etc.)
The U.S. Bankruptcy Code gives you up to five years to repay your creditors under Chapter 13. The minimum amount you will have to repay depends on how much you earn, how much you owe, and how much your unsecured creditors would have received if you had filed Chapter 7.
Your repayment plan will have to be approved by the courts. A repayment plan can be created even if creditors disagree with it. Once you complete all necessary payments, the remainder of your outstanding eligible debts will be eliminated.
How Do I Choose Which Assets to Keep?
Some of this is a personal decision, and the courts determine some of it. In Chapter 13, you can keep all of your property. However, some property is considered “exempt,” and other property is “non-exempt.” Exempt items you retain are meant to give you a fresh start by allowing you to keep the property you will need to maintain a home and job. Some examples of “exempt” property include:
- Partial equity in a primary residence
- Household goods
- Some equity in a car, truck, or SUV
- A qualified retirement account.
Items that are “non-exempt” under Chapter 13 include:
- Boats
- Vacation condominiums or cabins
- Timeshares
- Other non-essential luxury goods.
A court-approved repayment plan will determine how much you repay creditors in Chapter 13. As for “non-exempt” property you decide to keep, you will have to pay creditors the value of each item in the 3- to 5-year period allowed under Chapter 13. The more you keep, the more you will likely pay.
How Is My Repayment Plan Calculated?
Several factors affect the repayment plan that the courts will ultimately approve. In Chapter 13, you propose a plan that includes monthly payments to creditors. Several complex laws are at play, but generally, the following help determines the amount of your monthly payment:
- your household income.
- the property you own.
- your monthly living expenses.
- The amount of debt that you owe.
How much disposable income you have (after monthly expenses), and the number of years included in your repayment plan will help determine the amount of money you will need to pay each month under the plan. For a more detailed explanation of “exempt” and “non-exempt” property, contact a Kentucky Chapter 13 lawyer at 859-469-4821.
Will My Spouse Be Affected by My Bankruptcy?
If you are married, you can file a joint bankruptcy with your spouse or bankruptcy as an individual without your spouse. But even if you file alone, your bankruptcy may affect your spouse. Whether your bankruptcy impacts your spouse is determined by:
- whether you file Chapter 13 or Chapter 7
- whether you have joint property and debts in your and your spouse’s names together
- Property laws of the state in which you reside.
Generally, your bankruptcy will not affect your spouse’s FICO credit score. However, if you have joint debts, the fact that you filed for bankruptcy to discharge these debts may show up on your spouse’s credit report. And even though you, as the bankruptcy filer, will be relieved of responsibility for the joint debt, creditors can still come after your spouse to collect any joint debt. So, if you are married, you and your spouse must talk through all of your bankruptcy choices before deciding how to proceed. A skilled Chapter 13 attorney can help you weigh your options.
How Much Time Do I Have to Make a Decision?
You can take whatever time is needed to make an informed decision. But ensure you are not dragging your feet to avoid the inevitable or lounging in denial about your financial problems. Do not stop bankruptcy indefinitely if that is the best path for you and your family. Generally, the longer you wait, the narrower the path and the fewer options you have.
How Long Will a Bankruptcy Show Up on My Credit Report?
Be prepared. Bankruptcies stay on your credit report for a number of years and will negatively affect your ability to get a loan or a credit card at an attractive interest rate. However, if bankruptcy is your only choice for a fresh start, then this is something you will have to deal with. The length of time a bankruptcy stays on your credit report is determined by the type of bankruptcy you file:
Completed Chapter 13 bankruptcies stay on your credit report for 7 years.
Chapter 7 bankruptcies stay on your credit report for 10 years.
Will a Bankruptcy Affect My Employment?
In most cases, bankruptcy will not affect your current employment. However, bankruptcy could affect your future job prospects if you leave your current job and look for another one. Increasingly, corporations and private industry review prospective employees’ credit reports (along with other historical data) as part of their decision about whether or not to extend a job offer. Just as many employers now require a pre-employment drug test, several also review a candidate’s credit history.
How Will a Bankruptcy Affect My Children?
First, filing bankruptcy does not discharge any child support payments you owe going forward. Child support remains in place despite the bankruptcy. Next, some good news is that your bankruptcy generally will not affect your child’s ability to get college student loans, nor will it impact any checking or savings account in their names alone. However, be careful about making any last-minute deposits into a child’s account before declaring bankruptcy to protect your own funds. Courts are very suspicious of such actions.
Your bankruptcy may affect, to some degree, any money you’ve already contributed to a 529 Educational Fund for your child. Under federal laws, any money you have deposited in an educational fund in the prior 365 days is not protected. Deposits made between 365 and 720 days before filing for bankruptcy are only partially protected. And deposits made longer than 720 days before bankruptcy are entirely protected.
Contact a Lexington Chapter 13 Bankruptcy Attorney Now
To discover whether this is the right move for you, contact a Chapter 13 attorney at Bunch & Brock. For more than three decades, Bunch & Brock in Lexington, Kentucky, has provided assistance to individuals and families overcome by financial problems. Chapter 13 attorneys at our firm take the time to understand your situation and explain available options for relief.
There is no time like the present to start a brighter future. Do not let overwhelming financial burdens take the joy out of your life. To schedule a confidential appointment with a Bunch & Brock Chapter 13 attorney, please call 859-254-5522 today or contact us online.
Attorney Matthew Bunch
Matt handles complicated bankruptcies and debt restructuring in Chapters 11 and 13 for both individuals and companies. He has also negotiated with multiple creditors on behalf of his clients to avoid bankruptcy. Matt is the firm’s lead litigator and handles contract disputes, certain personal injury claims and general litigation. [ attorney bio ]
