Chpater 13 Bankruptcy Evaliuation
Factors in Chapter 13 Bankruptcy Evaluation
The purpose of a Chapter 13 bankruptcy evaluation is to help you decide if filing Chapter 13 bankruptcy is right for you. In general, an individual has two options on what type of bankruptcy to file – Chapter 13 or chapter 7. Since both these chapters have very different set of rules, getting a Chapter 13 bankruptcy evaluation helps you determine if Chapter 13 is the more suitable choice and if you are eligible.
Before you start with a Chapter 13 bankruptcy evaluation, it is important that you understand what Chapter 13 bankruptcy means. This specific chapter in the US Bankruptcy Code is known as the "Adjustment of Debts of an Individual with Regular Income".
In a Chapter 13 bankruptcy, the debt is re-organized and a payment plan is created in such a way that the debtor only has to pay what he can afford each month over a fixed period of time from three to five years. Needless to say, Chapter 13 bankruptcy can be filed only by an individual who has a source of income and can meet regular payments.
Usually, in a Chapter 13 bankruptcy evaluation the following factors are considered:
* Reasons for wanting to file bankruptcy. Do you want to put a stop to multiple garnishments or lawsuits filed against you? Are you at risk of eviction, repossession or foreclosure of your house? Has a sudden illness or unemployment burdened you with debt?
* An approximate amount of your total debt.
* An approximate amount of your expenses per month.
* The types of monthly bills you have, which can be credit cards, personal loans, student loans, mortgages, medical bills, student loans, and etcetera.
* Your properties such as real estate or car and other valuable assets.
* The status of your payments of your assets.
* The amount and source of your income, which can be employment, pensions, family support, and etcetera.
The above questions are necessary in a Chapter 13 bankruptcy evaluation to assess if you have the means to accomplish the payment plan. Again, you must have a stable and regular source of income, which after necessary expenses leaves you with a sufficient amount of money that can be used to pay your creditors.
In addition, the amount of your debts must not exceed a specific amount. For instance, your secured debts (obtained with collateral) must not be over $922,975 and your unsecured debts (obtained without collateral) must not be over $307,675.
As you can see, the law has strict rules as to who can qualify for Chapter 13 bankruptcy.
If you are considering filing, learn more about this option and then consult with an experienced bankruptcy lawyer to get an expert Chapter 13 bankruptcy evaluation. Most initial consultations are free.
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