Filing Chapter 13 Bankruptcy in Missouri?
Our Attorneys Can Answer All of Your Chapter 13 Bankruptcy Questions
Chapter 13 bankruptcy, also called a “wage earners plan” or “individual debt restructuring”, has the power to stop foreclosure sales and/or otherwise give debtors time to pay off their debt(s) — this can apply to past due debt amounts as well. The experienced bankruptcy attorneys at our local Kansas and Missouri law firm know how difficult this decision is and promise to be there for you every step of the way should you choose to work with us.
For more than three collective decades, the dedicated bankruptcy lawyers at Sader Law Firm have successfully represented fellow Missourians — as well as many others in Kansas and across the country — filing for Chapter 13 bankruptcy. We work tirelessly to ensure that all of your wants and needs are met during this difficult time. Our legal team has several resources at their fingertips as well as intricate knowledge of all state and federal bankruptcy laws to help clients with their filing. Our overall goal is to provide all clients with peace of mind by securing their futures in their bankruptcy proceedings.
Frequently Asked Questions About Chapter 13 Bankruptcy
The following are some of the most commonly asked questions that our bankruptcy attorneys have been asked about Chapter 13 over the years:
- What is Chapter 13 bankruptcy?
- Who can file for Chapter 13?
- Who cannot file Chapter 13 bankruptcy?
- Can I change from Chapter 13 to Chapter 7 bankruptcy?
- How long does the Chapter 13 bankruptcy process take?
- Are there advantages to filing Chapter 13 over Chapter 7 bankruptcy?
- What is the “automatic stay” associated with Chapter 13?
- What is not covered under Chapter 13 bankruptcy?
- Will I have to go to court when filing for Chapter 13?
- How will filing for Chapter 13 affect my credit?
What Is Chapter 13 Bankruptcy?
This type of bankruptcy allows individuals who have a consistent income to develop a payment plan in order to pay back their debt(s). This plan usually covers a span of three to five years. However, if the debtor’s current monthly income is less than the applicable state median, then the plan will be for three years unless the court approves a longer period. If the debtor’s current monthly income is greater than the applicable state median, then the plan generally must be for five years.
Who Can File for Chapter 13?
Anyone, even those who are self-employed or operating an “unincorporated” business, are typically eligible to file for Chapter 13 bankruptcy if the following two monetary requirements are met:
- Your “secured debts” — usually property, such as a house or car, that has been put up as collateral for a loan — total under $1,184,200.
- Your “unsecured debts” — unprotected property that has not been put up as collateral — total under $394,725.
Note that these amounts are subject to change regularly per fluctuating market values. An experienced bankruptcy lawyer can help you stay up to date, as well as determine, these amounts.
Who CANNOT File Chapter 13 Bankruptcy?
Corporations and partnerships cannot be Chapter 13 debtors. An individual cannot file Chapter 13 — or any other kind of bankruptcy — if they have filed within the last 180 days and were dismissed. This dismissal can be due to either your failure to appear in or comply with the court; or, alternatively, the dismissal could be voluntary on behalf of the creditors if they managed to seek relief from the bankruptcy court by recovering property they hold liens in.
No one can file bankruptcy until they have sought credit counseling. This counseling must be conducted by an officially approved credit counseling agency and can be done in a group setting or individually.
Can I Change from Chapter 13 to Chapter 7 Bankruptcy?
Depending on the circumstances, individuals filing for Chapter 13 can convert their cases to Chapter 7. This typically only occurs when clients decide they no longer wish to keep their homes or other property. Examples of reasons that people might want to switch include, but are not limited to: a mortgage that is too high for debtors to consistently keep paying, a debtor lost his or her job or a couple is separating.
How Long Does the Chapter 13 Bankruptcy Process Take?
It varies for each applicant. Whenever you file for Chapter 13, you are expected to create a payment plan that details how you will pay the debt back. Once this plan is confirmed — usually during your required creditors meeting — and the payments have been made, a discharge will be entered by the court.
Are There Advantages to Filing Chapter 13 Over Chapter 7 Bankruptcy?
Yes, there are quite a few advantages to filing Chapter 13 bankruptcy as opposed to Chapter 7. One of the most important being that you can save your home from foreclosure. Further, Chapter 13 bankruptcy can cure mortgage payments that are past due and delinquent. However, an applicant is responsible for making all mortgage (and other necessary) payments on time while the bankruptcy proceedings are underway.
What Is the “Automatic Stay” Associated with Chapter 13?
This term refers to the period of time where the collection actions of creditors against a debtor stop — or are “automatically stayed” —and can no longer be pursued. Depending on the circumstances, this “stay” may only be for a short amount of time. However, no matter the span of an automatic stay, no creditor can try to collect a debt by pursuing a lawsuit, wage garnishment or otherwise contact you about payment. Further, creditors cannot contact any other individual considered liable along with the debtor in pursuance of the debt payment. Note that an automatic stay can also be instituted in Chapter 7 bankruptcy proceedings.
What Is Not Covered Under Chapter 13 Bankruptcy?
It is important to know that filing for bankruptcy can solve many financial problems, but it certainly does not cure all of them. When filing for Chapter 13, you are still responsible for the following expenses before, during and after the proceedings:
- Child Support
- Other divorce-related debts
- Most student loans
- Court-ordered restitution payments (including fines incurred by criminal activity)
- Certain taxes
Will I Have to go to Court When Filing for Chapter 13?
Typically not. Usually, a debtor seeking to file Chapter 13 bankruptcy only needs to attend a creditors meeting. In this meeting, you and your bankruptcy attorney will answer Chapter 13 bankruptcy questions asked by attending creditors (if they choose to attend), lenders, a bankruptcy trustee and any other relevant party as well as review relevant paperwork. This meeting is usually short — lasting around an hour or so — and is a rather simple affair. However, if complications arise during this meeting and you — or the opposing parties — choose to pursue legal action, you will have to see the inside of a courtroom.
How Will Filing for Chapter 13 Affect My Credit?
It is important to note that when you file for bankruptcy, that doing so will show up on your credit report for 10 years. This can affect your ability to buy a car or house in the future, but this is not always the case. It will always be up to the discretion of future lenders. It will be important to do everything you can to maintain and build your credit as such displays of exemplary financial behavior will help when trying to make a big life purchase after filing for Chapter 13.
Other Questions About Your Chapter 13 Bankruptcy Case? Call Us Today
Filing for bankruptcy is a stressful, emotional and complicated situation to be in. If you are considering filing for Chapter 13 — or any kind of bankruptcy — it is highly recommended that you seek an experienced bankruptcy attorney. The professional bankruptcy lawyers at Sader Law Firm are here to answer your questions every day of the week. If you have questions concerning your bankruptcy case, call us at (816) 281-6349 or contact us online to schedule your free consultation.