Chapter 13 Bankruptcy Attorney – Understanding The Process of Bankruptcy
If you’ve been struggling to pay your debts and want to file for bankruptcy, there are many options available to you. However, it’s important to understand what each option entails before you make any decisions about your debt relief. A good Chapter 13 Bankruptcy Attorney in Phoenix can help you determine if bankruptcy is right for you and explain the process to you in terms that are easy to understand.
Your eligibility for Chapter 13 is based on how much income you earn, your debts and whether you own property or have significant assets. You’ll need to provide documentation of your current income and expenses.
The amount of your monthly income must be sufficient to cover at least some portion of the fixed payments in your plan. Your bankruptcy lawyer can assist you in creating a repayment plan that is reasonable and feasible.
During the course of the bankruptcy, your lawyer may also suggest strategies to protect your property. For example, they can remove unsecured junior liens from real estate through lien stripping and reduce the principal balance on secured debts such as a mortgage through loan cramdown.
You can also ask for additional forms of relief such as loss mitigation, a second mortgage payment plan and a catch-up schedule on pre-petition mortgage arrears to help you recover from your financial difficulties and avoid foreclosure.
A catch-up schedule is a court approved plan in which a client makes payments on mortgages that were due before the filing of the case, plus additional monthly Chapter 13 plan payments on arrears of existing pre-petition mortgages. This combination of monthly payments will allow the client to not fall further behind in their mortgage arrears and to catch up on their pre-petition arrears, curing any negative equity that has resulted in a default on the mortgage.
This type of relief can be very effective if the client has a reasonable belief that they can pay off their mortgages over time and is willing to commit to a five year plan in which they would pay at least a percentage of the amount owed to the lender. This would allow the lender to discharge a defaulted mortgage at the end of the five year plan without having to take any further action against the debtor.
The best Chapter 13 Bankruptcy Attorney in Phoenix will be able to assist you in determining your eligibility and creating an effective plan for you to repay your debts. The first step is to sit down with your lawyer and discuss your finances and your goals.
Your lawyer will then examine your debts, income and expenses to devise a plan that works for you and your unique circumstances. Your debts are likely to be categorized as either unsecured (such as credit cards, medical bills, and personal loans) or secured (such as mortgages and car loans).
Once your attorney has completed the analysis of your situation and created your plan, they will submit it to the court for approval. If the trustee or creditors object, a confirmation hearing will be held to determine whether the plan is valid and meets all requirements of federal bankruptcy law.