Every month, you pay your bills in full and on time. You have a steady income, a manageable amount of debt, and consider yourself fairly good with money. Maybe something happened recently, however, that knocked your financial equilibrium off-balance—a major car repair, or a series of unexpected medical bills. Slowly, your debt snowballed until it became unmanageable. You continue to work hard and make a decent living, but you feel like you are in over your head.
Arizona Chapter 13 Bankruptcy: Reorganize, Repay, Restart
It is far too easy in today’s economy to find yourself overwhelmed with debt despite making smart financial decisions. Many people do not even consider bankruptcy as an option because they have a steady paycheck coming in, and assume that they will not be eligible to file.
Cue the Chapter 13, or reorganization, bankruptcy. Rather than liquidating your property to eliminate your debt, a Chapter 13 bankruptcy allows you to create a payment plan to repay some or all of your debt over a period of up to five years.
Am I Eligible to File for a Phoenix Chapter 13 Bankruptcy?
Eligibility for a Chapter 13 bankruptcy is determined primarily in two ways:
What You Earn: You will have to prove that you have a solid, steady income that will allow you to meet your payment plan schedule.
What You Owe: Your outstanding debt cannot be so large that you will be unable to pay it off in the designated three to five year period. The courts have determined that you may have up to $1,149,525 in secured debt (debt with collateral attached, such as your house) and $383,175 in unsecured debt (debt without collateral, such as credit card debt) to qualify for a Chapter 13 bankruptcy
Making a Plan: What Your Next Few Years Could Look Like
Your repayment plan will help make a payment schedule for each of your debts, and will determine which debts are paid in full and which will only require a certain amount. Some debts, like child support and alimony, are required to be paid in full and are considered priorities. You will also be required to take approved credit counseling and debtor education courses over the course of your filing.
Typically, a Chapter 13 bankruptcy repayment plan will require your priority debts and secured debts to be paid in full with scheduled payments over the course of your plan. You will also be expected to show that any “leftover” money you have after making your scheduled payments is going toward repaying your unsecured debts. You may not be expected to pay these debts—such as your credit card bills—in full, but you will have to put your disposable income toward repayment for the duration of your plan.
Regain Control of Your Finances with the Help of Experienced Phoenix Bankruptcy Lawyers
When you are considering bankruptcy, it is important to know that you do not need to face the courts alone. Having an experienced attorney working beside you can help ensure that you get a repayment plan that will guarantee a solid financial future.p
The Arizona bankruptcy attorneys at Curry, Pearson & Wooten are here to help you move forward with your finances. Call today at 602-258-1000 for a complimentary consultation to discuss your case.