Phoenix Bankruptcy Lawyer
The Law Offices of Thompson & McGinnis, located in Phoenix, Arizona, provides legal representation to clients in need of an experienced bankruptcy attorney who is compassionate and caring with clients. She is assertive of their interests whether confronting chapter 7 concerns or facing chapter 13 concerns.
After focusing her practice on mainly family law , Phoenix divorce attorney Susan McGinnis has gained significant insight into all aspects of divorce and family law, including divorce litigation, collaborative divorce, child custody, child support, property division, spousal maintenance and other complex family issues. Contact The Law Offices of Thompson and Mcginnis at 602-952-2666, ask for Susan McGinnis or one of her associates to schedule a free initial consultation.
Bankruptcy Law Questions:
Chapter 7
How to Start the process
How The Process works
Why would I think about a filing a chapter 7 bankruptcy?
What debts are discharged?
How are the cost calculated for a chapter 7 bankruptcy, with an attorney?
How can I qualify for a chapter 7 bankruptcy?
How do I qualify under the means test?
How does chapter 7 bankruptcy work?
What do I have to provide to start the bankruptcy process?
So will the bankruptcy trustee take all of my property and sell it?
What if I want to keep my home or car but they are worth more than the amount exempted?
If I may want to reaffirm a debt but am unsure can I wait and see how the bankruptcy works out?
What if I find out after filing that a chapter 7 bankruptcy is not right for me?
What if I withhold information or lie during my bankruptcy case?
Can my boss fire me for going bankrupt?
About chapter 13 bankruptcy
The chapter 13 repayment plan
What happens if I cannot repay the repayment plan?
What are the advantages to chapter 13?
How am I eligible for chapter 13 bankruptcy?
How do I get started?
How much does a bankruptcy petition cost?
What if I can’t afford the court costs?
After I file a petition how does a chapter 13 bankruptcy work?
Who and when do I start paying according to the confrimed chapter 13 plan?
How many months do I have to repay my debts?
Can I pay the plan off early?
If I fall into some extra money should I pay more into my plan?
In a chapter 13 repayment plan typically how much money will I have to pay back?
Am I free from foreclosure after I file for bankruptcy?
I have federal income tax debts how will they be treated in chapter 13 bankruptcies?
What happens if I fail to pay a trustee?
What happens if I have trouble making the monthly payment?
What if my inability to make payments becomes a problem?
Are there any legal fees other than the ones I paid before filing?
What is a fair fee for the attorney in a chapter 13 bankruptcy?
The party or joint party that will be going through the process must first make sure that they qualify before filing. A person will qualify for Chapter 7 relief if either: (1) their and their spouses income does not exceed the median income level for the state in which they reside; or (2) if their income is over the state median, the “means test” is satisfied. (For more information on state specific median income visit www.justice.gov). In addition to the income requirement, before a person can file for bankruptcy, they must receive credit counseling from an agency approved by the United States Trustee’s office. (For a list of approved agencies, go to the Trustee’s website at www.usdoj.gov/ust).
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
How to File your Petition
Preparing a bankruptcy petition can be overwhelming and confusing and that is why we suggest that you let Attorney Susan McGinnis assist you with this process. There are a number of detailed rules and procedures that must be followed to ensure that your petition is filed correctly with the court.
Once a petition is properly filed, the court will appoint a trustee who will be assigned to your case to collect all “non-exempt property,” of which he or she will take these assets and distribute proceeds to appropriate creditors. This does not mean that a trustee will necessarily take all of your assets. And in fact, a person filing pursuant to chapter 7 may even qualify to reaffirm specific debts which would then be exempt from capture and repayment by the trustee. For instance, by signing a reaffirmation agreement a debtor can continue to pay for a car loan or a mortgage on their home.
Under Chapter 7, unlike other forms of bankruptcy filings the debtor does not make a payment to the trustee for his or her services. Also a filing debtor under Chapter 7 receives a discharge on all dischargeable debts. For further clarification on which debts are and are not dischargeable it is recommended that you seek the advice of Attorney Susan McGinnis.
The chapter 7 FAQs
WHY WOULD I THINK ABOUT A FILING A CHAPTER 7 BANKRUPTCY?
The simplest answer is to get rid of debts that have made it hard to live your life. Chapter 7 Bankruptcy gives most people a large amount of relief for relatively low cost.
But that is not the only reason, there are other reasons as well. For example after a bankruptcy petition is filed a creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt.
Another is that bankruptcy can stop foreclosure proceedings giving a debtor more time to either find a away to keep the house or find alternative places to reside that may be a better fit for the budget.
And there are many more! Ask an Attorney to explain how bankruptcy can help you remove the pile of debt that you have been under.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
WHAT DEBTS ARE DISCHARGED?
Most unsecured debt is erased in bankruptcy. There are some exceptions to the general rule:
- Child support and alimony;
- Personal injury or death judgments ;
- Student Loans
- Income tax debts and all other tax debts (However these types of debts can sometimes be discharged so consult an attorney first about income tax liability before you file)
- Debts you forget to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case; and
- Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.
Debts that are ordinarily discharged can also become non-dischargeable if they fall under the following criteria:
- Debts you incurred on the basis of fraud, such as lying on a credit application; Credit purchases of $1,225 or more for luxury goods or services made within 60 days of filing; Loans or cash advances of $1,225 or more taken within 60 days of filing
- Debts from willful or malicious injury to another person or another person’s property; Debts from embezzlement, larceny or breach of trust, and
- Debts you owe under a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them or the benefit you’d receive by the discharge outweighs any detriment to your ex-spouse.
* The list is not all items that would not be covered so consult an attorney before filing – An attorney being involved will get you the the best results – Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
HOW ARE THE COST CALCULATED FOR A CHAPTER 7 BANKRUPTCY, WITH AN ATTORNEY?
Fees in each case are different and therefore will usually have a different price. Please consult Attorney Susan McGinnis for cost for your specialized case at 602-952-2666. She is very reasonable and will work with almost anyone’s situation.
HOW CAN I QUALIFY FOR A CHAPTER 7 BANKRUPTCY?
To qualify for relief using Chapter 7 Bankruptcy, the debtor may be an individual, a partnership, or a business entity. Apart from being in the classifications just listed, a debtor’s financial position must fall within the parameters of the means test which is a debt to income ratio set by the United States Bankruptcy Code (for more information see below). A potential Chapter 7 candidate must complete credit counseling classes within 180 days before filing.
There are also some restrictions if you have filed for bankruptcy (any chapter) before. For instance, if you have already used a Chapter 7 Bankruptcy in the past to discharge your debt you must wait eight (8) years before you file again. This is an important consequence to filing so make sure that if you are considering a bankruptcy that you have no other options available. Also, please note that if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court, comply with court orders, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens; you cannot file.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
HOW DO I QUALIFY UNDER THE MEANS TEST?
The bankruptcy “means test” determines whether your income to debt ratio is low enough to qualify. It’s a formula designed to keep filers with higher incomes from filing for Chapter 7 Bankruptcy. High income filers who fail the means test may use Chapter 13 Bankruptcy to repay a portion of their debts according to a designated plan.
Having to take the Chapter 7 means test does not mean that you have to be desolate to use Chapter 7 Bankruptcy. Under the means test you can still make significant income if your monthly expenses are great, such as if you have a high mortgage payment.
Only bankruptcy filers with primarily consumer debts need to take the means test. To take the means test, you must first determine whether your income is more or less than the median income in your state. If you earn more than the median, you must figure out whether you would have enough left over, after subtracting certain expenses, to repay some of your debt.
Median income levels vary by state and household size, and each county and metropolitan region has different allowed amounts for categories of expenses: basic necessities, housing, and transportation.
Attorney Susan McGinnis can help you calculate the means test to see if you qualify for Chapter 7 Bankruptcy. Call today for more information!
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
HOW DOES CHAPTER 7 BANKRUPTCY WORK?
If you are qualified to file for a Chapter 7 Bankruptcy there are numerous documents that you are going to need to file, but,first things first, here is a brief overview of the general process:
The bankruptcy process officially begins when the debtor/attorney files a petition with the bankruptcy court. Usually the particular bankruptcy court used for filing is the one located where the debtor resides.
The petition, usually prepared by an attorney, will contain certain necessary documents such as:
- A schedule (defined lists) of assets and liabilities;
- A schedule of current income and expenditures;
- A statement of financial affairs;
- A schedule of executory contracts and unexpired leases.
- A copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began);
- A certificate of credit counseling;
- A copy of any debt repayment plan developed through credit counseling;
- Evidence of payment from employers, if any, received 60 days before filing;
- A statement of monthly net income and any anticipated increase in income or expenses after filing: and
- A record of any interest the debtor has in federal or state qualified education or tuition accounts.
Note: A husband and wife may file a joint petition or individual petitions. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
Along with the documents listed above the courts will charge a $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. The fees must be paid to the clerk of the court upon filing.
Upon filing a petition, an “automatic stay” (stop order) will go into affect preventing most collection actions/efforts against the debtor or the debtor’s property. The stay does not necessarily stop all collection efforts and is only temporary while the bankruptcy petition is being sorted out. Check with an attorney for a list of what is and is not covered. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments.
If you are in a Chapter 7 Bankruptcy and you are still being harassed after the petition has been filed, please contact Attorney Susan McGinnis at 602-952-2666 to see that relief may be available to you.
Between 20 and 40 days after the petition is filed, the case trustee (the court representative handling your case) will hold a meeting of creditors. During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor’s financial affairs and property. If a husband and wife have filed a joint petition, they both must attend the creditors’ meeting and answer questions. This meeting is generally held to make sure that all creditors are on notice of the debtor’s pending bankruptcy, to inform the debtor of the consequences of filing bankruptcy and to make determinations about whether the debtor has committed bankruptcy fraud in the preparation of a petition.
If everything is in order, the bankruptcy claim has been determined valid and the all of the creditors have been accounted for the trustee will start the process of collecting and selling all non-exempt property. Once complete, a discharge will happen releasing individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, debtors should consult competent legal counsel before filing to discuss the scope of the discharge.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
WHAT DO I HAVE TO PROVIDE TO START THE BANKRUPTCY PROCESS?
Well there are lots of documents that you have to provide, but the good news is that if you have an attorney all of the forms will be filled out correctly for you, so all that you have to do is provide the appropriate documentation of creditors, debts, expenses, etc. to the attorney and you will be well on your way.
Here is a brief (non-exclusive) list of the documents that you will need are:
- A list of all creditors and the amount and nature of their claims;
- The source, amount, and frequency of the debtor’s income;
- A list of all of the debtor’s property; and
- A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
NOTE: Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse are required so that the court, the trustee and creditors can evaluate the household’s financial position.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
SO WILL THE BANKRUPTCY TRUSTEE TAKE ALL OF MY PROPERTY AND SELL IT?
No! Filing bankruptcy will not deprive you of all of your belongings. There is certain property that is “exempt” and that property will be protected from being sold off to settle a debtor’s debts. In Arizona, a list of exempt property can be found at the following website.
WHAT IF I WANT TO KEEP MY HOME OR CAR BUT THEY ARE WORTH MORE THAN THE AMOUNT EXEMPTED?
Every situation is different, so there is no guarantee that you will be able to keep certain non-exempt property, but, usually based on certain financial factors, a debtor will be allowed to reaffirm a debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt. Again this is not an automatic right so please as an attorney to explore and advise all options available to you.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
IF I MAY WANT TO REAFFIRM A DEBT BUT AM UNSURE CAN I WAIT AND SEE HOW THE BANKRUPTCY WORKS OUT?
If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court. The Bankruptcy Code requires that reaffirmation agreements contain specific disclosures that must advise the debtor of exactly the amount of the debt being reaffirmed and exactly how it is calculated, and that reaffirmation means that the debtor’s personal liability for that debt will not be discharged in the bankruptcy. The disclosures also require the debtor to produce paperwork that they have enough income to pay the reaffirmed debt. If the debtor does not have enough the court may not approve the reaffirmation agreement.
Note: If a debtor does not have an attorney the court will have to approve the reaffirmation agreement. Otherwise, the attorney can certify that the debtor has been made aware of all rights and responsibilities regarding the reaffirmation without having to get the court’s approval.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
WHAT IF I FIND OUT AFTER FILING THAT A CHAPTER 7 BANKRUPTCY IS NOT RIGHT FOR ME?
If you are eligible for another chapter (such as chapter 11, 12, or 13) the Bankruptcy Code allows the debtor to convert a chapter 7 case to a case a new chapter. However, a condition of the debtor’s voluntary conversion is that the case has not previously been converted to chapter 7 from another chapter.
WHAT IF I WITHHOLD INFORMATION OR LIE DURING MY BANKRUPTCY CASE?
The court can negate any action that it has taken to discharge your debt if the discharge was obtained through fraud by the debtor, if the debtor acquired property that is property of the estate and knowingly and fraudulently failed to report the acquisition of such property or to surrender the property to the trustee, or if the debtor makes a material misstatement or fails to provide documents or other information in connection with an audit of the debtor’s case. So essentially everything that the bankruptcy was trying to do to help you would be undone SO DON’T DO IT!
CAN MY BOSS FIRE ME FOR GOING BANKRUPT?
NO! The United States Bankruptcy Codes prohibits any employer from discriminating against you because you filed bankruptcy.
Chapter 13 Bankruptcy is sometimes referred to a reorganization bankruptcy and is very different from Chapter 7 bankruptcy. In a Chapter 7 bankruptcy, most debts are discharged and a person is given a “clean slate” to start over. However, those persons that do not qualify for Chapter 7 bankruptcy may nonetheless seek financial relief through a Chapter 13 bankruptcy filing. In a Chapter 13 bankruptcy, a person does not hand over any property, but must instead use their income to pay some or all of what is owed to creditors generally over a three to five year repayment plan.
The length of a person’s repayment obligation will be dependent on how much they earn in relation to how much they owe. If a person’s average monthly income over the preceding six month period prior to the date a Chapter 13 bankruptcy petition is filed is more than the median income for their state, they will be mandated to prepare and propose a five-year repayment plan. If however, a person’s income is lower than the median, they may propose a repayment plan over three years. (For median income data in your state, visit the United States Trustee’s website, www.usdoj.gov/ust. No matter how much you earn, your plan will end if you repay all of your debts in full, even if you have not yet reached the three- or five-year mark.
Chapter 13 bankruptcy isn’t for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you’ll have to prove to the court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13. If your total debt burden is too high, you are also ineligible. Your secured debts cannot exceed $1,010,650 and your unsecured debts cannot be more than $336,900. A “secured debt” is one that gives a creditor the right to take a specific item of property (such as your house or car) if you don’t pay the debt. An “unsecured debt” (such as a credit card) doesn’t give the creditor this right.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
The most important and convoluted aspect of a Chapter 13 filing will be a repayment plan. The repayment plan is a detailed list that will describe precisely how a person will repay each of their debts. There is no official form for the plan and therefore it is strongly recommended that you seek the advice of one of our bankruptcy attorneys when preparing your repayment plan documents.
A Chapter 13 plan is required to pay certain debts in full. These debts are called “priority debts,” since they are considered adequately important to move to the head of the bankruptcy repayment line. Priority debts include child support, alimony, wages you owe to employees and certain tax obligations. In addition, your plan must include your regular payments on secured debts, such as a mortgage or an auto loan, as well as repayment of any arrearages (past due amount(s)) on the debts.
A repayment plan must also illustrate that any disposable income a person has left after making required payments will go towards repaying any unsecured debts, such as credit cards. It should be noted that a person will not be required to repay these debts in full or at all in some cases.
What Happens if I Cannot Repay the Repayment Plan?
If for some reason a person cannot finish a Chapter 13 repayment plan, if circumstances are warranted, the bankruptcy trustee has the power to modify the plan, or a court may discharge the remaining debts in full if “hardship” can be demonstrated. If the bankruptcy court won’t let you modify your plan or give you a hardship discharge, you might be able to change to a Chapter 7 bankruptcy or seek permission from the court to dismiss your Chapter 13 bankruptcy, of which case a person would still owe any remaining debts, plus interest(s) creditors discharged while the Chapter 13 case was pending.
WHAT ARE THE ADVANTAGES TO CHAPTER 13?
Chapter 13 offers individuals a number of advantages over liquidation under Chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and try and work out a re-payment plan for missed and future payments.
Another advantage of chapter 13 is that it allows individuals to reschedule secured debts and extend them over the life of the chapter 13 plan. Doing this may lower the payments and help the debtor keep property that they may not have been able to with the higher payments.
Chapter 13 also has can protect third parties who are liable with the debtor on consumer debts or can also protect co-signers.
Finally, chapter 13 allows the debtor to consolidate his debt paying the monthly payment to the Trustee. This will make repayment easier while shielding current creditors from contacting you.
HOW AM I ELIGIBLE FOR CHAPTER 13 BANKRUPTCY?
Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400 (These numbers are subject to change and we will update them as soon as possible if and when they do).
NOTE: This Chapter is only eligible to individuals, business entities or corporations are not eligible.
There are a few more restrictions that you need to be aware of. An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. No individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency.
The first thing you must do is file a Chapter 13 Petition in the Bankrupcty Court that oversees the area where you live. The filed petition is the first official step in the chapter 13 process. By filing the petition the court will enter an automatic stay which means creditors may no longer demand money from you, bring you to court to collect debt or even to proceed with foreclosure or repossession of your property.
The debtor through his attorney must also file with the court:
(1) schedules of assets and liabilities;
(2) a schedule of current income and expenditures;
(3) a schedule of executory contracts and unexpired leases;
(4) a statement of financial affairs;
(5) a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling;
(6) evidence of payment from employers, if any, received 60 days before filing;
(7) a statement of monthly net income and any anticipated increase in income or expenses after filing
(8) and a record of any interest the debtor has in federal or state qualified education or tuition accounts.
(9) a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case.
Note: A husband and wife may file a joint petition or individual petitions.
Don’t get too worried, while the list of documents looks daunting your attorney will help you through the process. They will make sure that you have everything you need and they will correctly prepare the documents that need to be filed on your behalf.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
HOW MUCH DOES A BANKRUPTCY PETITION COST?
The courts must charge a $235 case filing fee and a $39 miscellaneous administrative fee.
WHAT IF I CAN’T AFFORD THE COURT COSTS?
If you cannot pay the court fees all at one time you may be able to ask the Bankruptcy Court to accept payments on the filing fee. Remember, the Court must grant you permission to do this and they usually base their permission on the particular facts of your case.
AFTER I FILE A PETITION HOW DOES A CHAPTER 13 BANKRUPTCY WORK?
After individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. The chapter 13 trustee will serve as the person who collects payments from the debtor and makes the distributions to creditors.
Your Attorney will file a proposed plan as to how you are going to repay the debt over 3-5 years depending on your individual circumstances.
Between 20 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan. The parties typically resolve problems with the plan either during or shortly after the creditors’ meeting.
After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor’s chapter 13 repayment plan. After which the Trustee will confirm your repayment plan and you can start repayment.
Your attorney will make sure that every form and document is provided and filled out correctly. Your attorney should also contact the trustee ahead of time to make sure that the plan will be workable and that all of the creditors will be satisfied. These steps by the attorney will not only speed up the process but also prevent any delays that that could delay the start of your repayment schedule.
WHO AND WHEN DO I START PAYING ACCORDING TO THE CONFRIMED CHAPTER 13 PLAN?
If you still have secured debts, such as a mortgage, these payments may be outside the plan and you will pay them off just as you normally would. The date and time of the payment will not change. If you miss a payment on a secured debt the creditor may as that the automatic stay be lifted and something like your house could go into foreclosure proceedings.
Unsecured debts on the other hand should all be consolidated into the repayment plan along with some secured debt (if your plan was structured a certain way) that was all accrued before filing bankruptcy. For these debts you will make a payment each month in the amount dictated by your individual plan. The trustee will take that payment and disburse it to the creditors according to how the plan is structured.
Any new debt that you may incur after the filing of bankruptcy will not be a part of the bankruptcy and will have to be paid according to the terms that you and the creditor have agreed to.
HOW MANY MONTHS DO I HAVE TO REPAY MY DEBTS?
This depends upon your plan which should be based on your income over the life of the plan. The plan will be between 3 to 5 years or 36 to 60 months.
No it really doesn’t work that way because if your income would allow for faster payback than the time bed in the plan than the Trustee most likely would have set your plan at the minimum 36 months and allowed for a larger portion of the money to go to your unsecured creditors.
IF I FALL INTO SOME EXTRA MONEY SHOULD I PAY MORE INTO MY PLAN?
Changes in circumstances may require that you file an amendment to your initial plan, which accounts for such changes in a modified plan payment.
IN A CHAPTER 13 REPAYMENT PLAN TYPICALLY HOW MUCH MONEY WILL I HAVE TO PAY BACK?
The amount you repay varies based on your specific financial situation, namely the amount of income you have remaining each month after expenses deemed necessary by the court.
AM I FREE FROM FORECLOSURE AFTER I FILE FOR BANKRUPTCY?
Yes, unless you start missing your mortgage payments. If you start missing your payments then the automatic stay could be lifted stripping you of all the protection that a Chapter 13 Bankruptcy provided.
I HAVE FEDERAL INCOME TAX DEBTS HOW WILL THEY BE TREATED IN CHAPTER 13 BANKRUPTCIES?
In most cases tax debt cannot be discharged.
WHAT HAPPENS IF I FAIL TO PAY A TRUSTEE?
Your case could be dismissed. If the Trustee moves to dismiss your case you will lose the protection of the bankruptcy by not reducing the debt owed and extinguishing any protective relief granted by the court.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666
WHAT HAPPENS IF I HAVE TROUBLE MAKING THE MONTHLY PAYMENT?
At the first sign that you may have trouble making your payment let your attorney know so that he may alert the Trustee or creditors involved. The Trustee will have the option to dismiss your case, but, if this is a one or two month set back most Trustees will allow you to make up the payments at some point in the future and will not dismiss the case. Remember, this is not a guaranteed outcome but usually things go a lot smoother if you communicate your issues with your attorney instead of waiting and missing payments.
WHAT IF MY INABILITY TO MAKE PAYMENTS BECOMES A PROBLEM?
The worst case scenario is that the case is dismissed. However, some debtors may have the opportunity, with Trustee permission, to convert the Chapter 13 Bankruptcy to another Chapter such as a liquidation bankruptcy like Chapter 7. However, you will have to meet the requirements of a Chapter 7 Bankruptcy to convert, so again the sooner you realize payments are going to be a problem it is best to alert your attorney so he can explore all of the options that are available to you.
ARE THERE ANY LEGAL FEES OTHER THAN THE ONES I PAID BEFORE FILING?
Many attorneys may charge reduced rates up front, with the remaining balance being paid through the plan. This makes filing for bankruptcy more accessible for some clients. In addition, there may be some fees based on any additional motions (including but not limited to work done on plan amendments, adversarial proceedings, extra motions, or conversion to another chapter), and those fees will all be determined by the agreement that you and your attorney set up in advance.
WHAT IS A FAIR FEE FOR THE ATTORNEY IN A CHAPTER 13 BANKRUPTCY?
Chapter 13 cases can be complicated and therefore legal fees are higher. If your Chapter 13 case involves a wholly-owned business, or other complicated legal issues, legal fees could be increased. Attorney Susan McGinnis is very fair and can work with most clients situations.
Attorney Susan McGinnis knows the rules and regulations and will guide you through the process.
Contact The Law Offices of Thompson and Mcginnis and ask for Susan Mcginnis or one of her associates 602-952-2666