Bankruptcy Chapter 13 Attorney on Long Island
Chapter 13 bankruptcy, also known as “a wage earner’s plan,” is a type of bankruptcy where a debtor undertakes a reorganization of their finances under the supervision and approval of the federal government. One of the most attractive aspects of Chapter 13 bankruptcy is that the repayment plan provides “regular” income individuals with an opportunity to develop a plan to restructure their debt while retaining all of their property. A chapter 13 requires a debtor to propose a plan of reorganization that lasts between three (3) years and five (5) years. During this repayment plan period, creditors are prohibited from starting or continuing collection attempts and prohibiting enforcement of existing judgments.
Continue reading if you would like to learn more about Chapter 13 bankruptcy, its advantages, disadvantages, and whether you are eligible to petition for Chapter 13 bankruptcy. While bankruptcy is an effective means to get you the financial help you need, we at Macco & Corey P.C. understand that this is a daunting and complicated process. Our experienced bankruptcy lawyers are here to listen to your wants and needs, identify all of your potential options, guide you through the bankruptcy process, and most importantly, offer you peace of mind amid these challenging times. Reclaim your financial future today and contact us for your free and confidential consultation.
How Does Chapter 13 Bankruptcy Work?
When debt begins to pile up, you are generally left with two types of bankruptcy: Chapter 7 or Chapter 13 bankruptcy. People often seek to qualify for a chapter 7, as it requires no plan to repay debts. However, in certain situations, particularly those with high regular monthly incomes or valuable non-exempt assets, Chapter 13 may provide the only route to eliminating your debt. While chapter 13 debtors are required to propose a repayment plan, the amount a debtor repays is based on several factors, including monthly income and expenses and non-exempt assets. Although some cases require a one hundred (100%) percent payment of a debtor’s debts, most plans are structured to pay substantially less. A chapter 13 plan permits a debtor to make the payments interest-free over an extended period regardless of the distribution percentage.
In a Chapter 13 bankruptcy case, you will be required to compile an exhaustive list of all assets, liabilities, income, expenses, and other information regarding your financial wherewithal. The most important information for a Chapter 13 plan is a determination of your monthly expenses, such as:
- Home expenses. Home expenses entail the cost of housing. This may come in the form of rent or mortgage payments. However, it may also include homeowners association fees, real estate taxes, and homeowners or renters insurance. Fees for utilities are also part of this category.
- Child-related expenses. This includes all expenditures related to the care and education of the child, such as babysitters, daycare, after-school activities, tutoring services, school uniforms, school supplies, textbooks, personal computers, school tuition, and before and aftercare services.
- Transportation expenses. The costs associated with leasing or buying a car, commuting costs to work, and other transportation services used by household members to commute, including public transportation. Additionally, monthly expenses for gas, vehicle maintenance, and vehicle insurance.
- Entertainment expenses. Entertainment expenses refer to costs of entertainment purchases for the household, such as subscription television services or tickets to a professional sporting event.
Enlisting the help of a well-versed bankruptcy lawyer can be highly advantageous. Filing the seemingly endless required bankruptcy documents is a formidable task. By having a trusted bankruptcy attorney by your side, you can feel assured that these crucial documents are correctly completed and submitted by the appropriate dates, absent of preventable mistakes. Moreover, your bankruptcy attorney will advise you before drafting and submitting a proposal to repay your debts that address your financial needs and goals. Hiring an attorney specializing in bankruptcy to help you petition for Chapter 13 bankruptcy protection can save you the headache and any unnecessary mishaps.
Once you have submitted the necessary information, you and your attorney will create a chapter 13 plan of reorganization you can maintain. After filing a bankruptcy, a chapter 13 trustee will be appointed by the Court. The trustee will review your assets, income, and expenses and determine whether such plan complies with the requirements of the Bankruptcy Code.
A chapter 13 plan eliminates the challenges of managing multiple payments to multiple creditors. Instead, the debtor needs only to make one payment to the trustee, which the trustee then distributes to the debtor’s creditors. Through the repayment plan’s streamlined process and Chapter 13 bankruptcy protection, the debtor need not directly contact creditors. A debtor can rest assured knowing that the provisions of chapter 13 are set up by the federal government, including the appointment of their chapter 13 trustee, avoiding potential scams from fly-by-night debt consolidation or debt negotiation companies.
Who Is Eligible For Chapter 13 Bankruptcy?
Just because you have a lot of debt and are overwhelmed by your creditors doesn’t mean you should be filing bankruptcy. Filing Chapter 13 takes serious consideration. There are specific requirements according to bankruptcy law that are unique to a New York Chapter 13 case. To be eligible to file for Chapter 13 bankruptcy, there are several requirements that you must first meet. These requirements include:
- Having a regular income. First, you must prove that you receive a consistent income that is sufficient to pay your monthly expenses and fund your chapter 13 plan of reorganization. If your income is irregular or too low, your proposed repayment plan will not be approved by the court.
- Having unsecured debts totaled under $419,275. Unsecured debts are debts that are not backed by collateral, such as a vehicle or home. Examples of unsecured debts include credit cards, medical bills, and student loans.
- Having secured debts totaled under $1,257,850. Secured debts include loans where you have pledged a tangible asset as collateral. Examples of such include a mortgage and car loans.
What Makes You Ineligible for a Chapter 13 Bankruptcy?
Your eligibility also depends on any previous bankruptcy cases you may have filed for.
Dismissed for a Previous Bankruptcy
If you were already dismissed, you can’t file for a new bankruptcy petition if you had previously done so in the last 180 days. This only includes dismissal for specific reasons, such as not showing up to your scheduled court session. However, if you were dismissed because you weren’t making Chapter 13 bankruptcy payments on time, you could reapply. You must know you can commit to your payments before your attorney begins a new Chapter 13 case.
Previous Chapter 13 Bankruptcy Filing
If you filed for a Chapter 13 bankruptcy in the past two years, you wouldn’t be able to again until two years have passed. If you previously filed a Chapter 7 within the last four years, you also won’t be able to apply for a Chapter 13 until four years have passed.
How Can a Chapter 13 Attorney Help You?
You may be confused about how filing a bankruptcy works. When Chapter 13 bankruptcy lawyers get involved, they clarify the process and go over all of your income, car loans, mortgage payments, property, credit card debts, and other payments you have fallen behind on. They do a full review of your circumstances, where your secured, unsecured debt, assets, and income are scrutinized. Some of your property may be non-exempt from being used to pay creditors, but to clarify this, your attorney can help inform you how that works according to bankruptcy law. After investigating your case, they are ready to file a bankruptcy petition using the Chapter 13 plan they crafted for you. Your Chapter 13 case will be presented in the New York bankruptcy court and will be in the hands of the judge from that point forward.
How a New York Bankruptcy Lawyer Helps with Organization
Your attorney will ensure that you avoid simple mistakes that most individuals make when filing for a Chapter 13 bankruptcy. They will also make sure your Chapter 13 case is on time for deadlines and submit your paperwork on the appropriate dates. They will identify what your financial goals are and help you meet them through your bankruptcy filing.
Chapter 13 Mortgage Modification
One of the most important aspects of a Chapter 13 case is to get back into good standing with mortgage payments. When your attorney starts your repayment plan, they will look at your income, figure out what is holding you back from paying on time and help you restructure your mortgage by modifying monthly sums to your secured creditors. This will not only help you keep your home, but also allow you more disposable income.
Chapter 13 Plan Creations
When working with a bankruptcy attorney, they will create a feasible repayment plan through your Chapter 13 case. They outline your expenses by grouping them based on the type of secured and unsecured creditors that manage them. Your mortgage, property payments, credit card debts, and other loans will be organized into a realistic proposal of monthly payments. It considers your income level and may also define what non-exempt property you will turn over to your secured and unsecured creditors. Because your Chapter 13 attorney is educated in bankruptcy law and debt modification, they know how to build a Chapter 13 plan that the New York bankruptcy court will accept.
What are the Steps of a Chapter 13 Bankruptcy in New York
Your bankruptcy lawyer will help you complete the Official Bankruptcy Form that is part of the bankruptcy court petition, a statement of financial affairs, and a schedule.
Pre-File Course
You will be required to attend a pre-file course where you undergo credit counseling. After this course, you receive a bankruptcy court certificate that is needed in your petition.
Filing the Form
The form that you fill out will have the following:
- A list of your creditors and the amount you owe them
- The explanation for each debt claim
- Your source of income
- The amount of wages you are paid
- How consistently you are paid
- A list of all the properties that you own
In addition to these financial details, you will need to provide a list of your monthly expenses. This can include the following:
- Grocery bills
- Clothing expenses
- Utilities
- Transportation fees
- Mortgage
- Medical bills
- Taxes
Creating a Petition Jointly or Individually
You and your spouse will have to decide if you will be filing together separately. Your attorney can provide guidance on which strategy would work best. If you are filing together, you will need to collect information on your spouse as well. You will need to know their income, expenses, and other details that provide a whole picture of your financial situation.
Information Verified
In your official paperwork, you will also need to provide bank statements, tax returns, and paycheck stubs. This will be used to verify the information in your petition.
Automatic Stay
After you file your petition, you will then undergo an automatic stay provision. This protects you from creditors looking to collect payments from you. Each of your creditors is sent a one-page document that prohibits them from contacting you.
Attend Two Hearings
You will be appointed an administrator when you attend the meeting of creditors, where they may ask questions. Your attorney will also participate in a confirmation hearing to learn whether you are approved or disapproved.
Next Steps
After you are approved, you have to follow the repayment modification plan strictly. You will be required to take a post-filing course when your plan is almost complete. On completion, you receive a bankruptcy discharge.
Reasons You Should Contact a Chapter 13 Attorney Today
Most people in the US struggle financially, but not many seek help. Around 70% of Americans today are in some kind of financial trouble. When you are in arrears on most of your payments, you may consider filing for bankruptcy to help reorganize your debt to help repair your finances. This is a customizable debt consolidation that includes your credit card debt, mortgage payments, car loan, and other personal debts that must be paid. However, some of your property may be considered non-exempt and can be used to cover some of the debt you owe.
Chapter 13 plans are used as a tool to restructure your debt so that you can improve your asset management, as well as the ability to commit to on-time payments. You can work with a reliable Chapter 13 attorney in Long Island who will provide valuable guidance on the bankruptcy process and help you draft a proposal that the court will accept. They will also educate you on the best approaches to file for Chapter 13 bankruptcy.
Chapter 13 Attorney Long Island
The attorneys at Macco & Corey P.C., have over 70 years of experience providing help to clients with bankruptcy and insolvency issues. Between their private practice and their service as trustees, our partners estimate they have been involved in over 100,000 bankruptcy cases. With our knowledge and experience, you can be confident that our attorneys can help represent you in a New York Chapter 13 case.
It can be stressful when you have a high level of indebtedness and cannot stay on top of your payments. Creditors may be contacting and threatening you over the phone, along with collection agencies. Prevent this ongoing harassment and get back on track with the help of a proven New York Chapter 13 lawyer who can provide credit counseling, debt modification, and a great repayment plan. They will identify all areas of your debt and help create your Chapter 13 bankruptcy case. Contact Macco Law today at 631-549-7900 for a free initial consultation.
Frequently Asked Questions Regarding Bankruptcy Chapter 13
Will Chapter 13 take all of my money?
No, a Chapter 13 plan limits your monthly payments to a maximum of 15% of your disposable income. Therefore, a person filing for Chapter 13 will never be completely stripped of their savings. Remember, the whole point of bankruptcy is to restructure a person’s debt and to help their finances- not to push them further into financial ruin.
Will Chapter 13 ruin my credit score?
A bankruptcy will remain on your credit report for seven years. However, in many cases, bankruptcy and restructuring will help give you the tools necessary to rebuild your credit in a way that might not have happened if you did not file. It is definitely something to consider before you file for bankruptcy.
Will Chapter 13 take away my property and assets?
The government will not seize your assets to pay your debt in Chapter 13 Bankruptcy. The debtor in a Chapter 13 plan will be allowed to keep their assets but submit to a repayment plan to eliminate their debts.
What happens after a Chapter 13 plan is confirmed?
If the court confirms the proposed Chapter 13 plan, it will then take effect. The trustee will subsequently distribute funds according to the plan.
Can Student Loan debt be discharged in bankruptcy?
It is extremely rare to get student loan debt discharged in bankruptcy. However, in some rare cases, it is possible if you can prove that the loans are giving you an “undue hardship.” This must be done through an adversary proceeding and it is an incredibly high burden to prove. Contact an attorney to learn more about how to discharge student loan debts.
What are the benefits of filing for Chapter 13 in Long Island, New York?
Chapter 13 can offer a lot of benefits. If you are struggling and overwhelmed by debt, then you might not know where to turn. You might feel embarrassed and hopeless. However, there is no shame in seeking help under the United States bankruptcy code. In fact, it can be a much smarter decision to seek legal help than to continue accumulating more debt, defaulting on loans, or foreclosure. Chapter 13 can provide much-needed relief and modification for your loans. After this, you can breathe again and rebuild your credit and financial freedom.
Can I rent an apartment during the Chapter 13 repayment plan?
Yes, a person is able to rent an apartment during a Chapter 13 repayment period. However, most apartment rental applications will require a copy of the person’s credit report. It is always best to explain your history to any potential landlord. In addition, talk to your attorney before entering into any rental agreement during your bankruptcy repayment period.
Do I need a New York Chapter 13 attorney?
No one who files for bankruptcy is required to have a lawyer. However, the U.S. Bankruptcy law is very complex and is best tackled with the help of an experienced attorney. Reach out to the Macco & Corey P.C. today to discover how our New York attorneys can help your case.
Contact Us
With all of the components needed to carry out a successful Chapter 13 repayment plan, you must have a well-versed and experienced Long Island bankruptcy lawyer standing by your side. At Macco & Corey P.C., we are committed to serving Long Island and the New York metropolitan area with the best bankruptcy counseling available. Contact us today for your free and confidential consultation. Together, we can get you back on the road to financial freedom.
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