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A Chapter 13 Personal Bankruptcy, is a form of personal bankruptcy filed by one person or a married couple. A Chapter 13 contemplates that the debtors (the person(s) filing the case) will propose a payment plan to pay some or all of their debts while still keeping valued assets. Examples of assets that a debtor can retain as a part of a Chapter 13 include a home, real property, investments and automobiles. Only individual person (either one person or a married couple) can file a Chapter 13 case. A business seeking bankruptcy relief by which a payment plan would be proposed would have to file a Chapter 11 case. To be clear, a married person can file a Chapter 13 alone or with their spouse. And a single unmarried person cannot file a joint Chapter 13 case with any other person.
There are several reasons a Chapter 13 to be preferable to a Chapter 7 case. For instance, in a successful Chapter 13 case, the debtor(s) can stop the foreclosure of a home or other real property – and the repossession of vehicle(s). But in a successful Chapter 13 plan, the debtors must still make all monthly mortgage and Chapter 13 plan payments as they come due. Chapter 13 plan payments can be made directly to the bankruptcy trustee or deducted automatically from the debtor(s) pay check by an income deduction order. Also, many types of debts that are not typically dischargeable in a Chapter 7 bankruptcy case can be discharged in a Chapter 13 case. These include, but are not limited to: Non-Support Obligations Owed to an Ex-Spouse and “Willful and Malicious Injury” claims. It is important to speak with an experienced attorney when trying to determine whether a Chapter 13 is good choice for you – especially if you have debts that may not be discharged in a Chapter 7.
The Chapter 13 bankruptcy plan is the debtor(s) proposed payment arrangements to repay creditors over a certain amount of time (three to five years). However, it is important to note that it is not uncommon for unsecured creditors to receive little or nothing in a Chapter 13 plan – with the bulk of the payments going to secured items, the bankruptcy attorney(s) and the bankruptcy Trustee for administrative costs.
Once the Chapter 13 bankruptcy plan is drafted – it is filed with the court and presented to the Bankruptcy Trustee and the court for approval. The creditors and the Bankruptcy Trustee can object to the confirmation (formal approval) of the Bankruptcy Plan. The debtor(s) can amend / revise their bankruptcy plan to overcome objections as time allows. However, ultimately bankruptcy court judge may have to review the plan and either approve or deny the plan. If the bankruptcy plan is finally approved – the court issues a court order confirming the plan. But if the debtors fail to propose a bankruptcy plan the court approves – their bankruptcy cases will either be dismissed or the debtor(s) have the option of converting the case to a Chapter 7.
Assuming the debtor’s Chapter 13 plan is confirmed, he trustee assigned to the case will facilitate the collection of the debtor(s)’ monthly plan payments and the dividing of the funds among the creditors that filed approved proof of claims. In general, the attorneys, trustee, secured creditors and priority creditors are paid before general unsecured creditors. The debtor(s) actually have very little input regarding who gets paid in a Chapter 13 case. However, once a Chapter 13 case is completed – most or all debts will be discharged. Therefore, any creditors not paid in full would have no recourse against the debtor(s) following the case’s conclusion.
A Chapter 13 can only be filed by individuals or married couples that have regular income. Furthermore, the debtor(s)’ secured debts cannot exceed $1,149,525 (as of April 2013). Also, the debtor(s)’ unsecured debts cannot exceed $383,175.00 (as of April 2013). If the debtor(s)’ income is lower than their IRS designated region’s median income, then the payment plan will typically be thirty-six (36) months. If the debtor(s)’ personal income is higher than the median income in their designated IRS region, then the Chapter 13 plan will usually last sixty (60) months. There are some instances where a person that qualifies for a shorter plan may opt for the sixty (60) month plan – and someone that would normally qualify for a longer plan may opt for a thirty-six (36) month plan. However, ultimately the bankruptcy court will grant final approval for the duration of the plan. But under no circumstance, should a Chapter 13 bankruptcy payment plan to exceed sixty (60) months.
Coleman Legal Group, LLC handles cases in the following cities and communities: Atlanta, Alpharetta, Roswell, Johns Creek, Milton, Cumming, Marietta, Sandy Springs, Woodstock, Kennesaw, Gainesville, Norcross, Lawrenceville, Midtown, Inman Park, Duluth, Buckhead, Dunwoody, Vinings and Smyrna.
Our attorneys frequently handle cases for clients residing in the following counties: Fulton, Gwinnett, Forsyth, Cobb, DeKalb, Henry, Cherokee, Douglas, Carroll, Coweta, Paulding, Bartow, Hall, Barrow, Walton, Newton, Rockdale, Henry, Spalding, Fayette and Clayton.
Coleman Legal Group, LLC’s Georgia lawyers practice in the areas of Bankruptcy, Divorce, Family Law, Immigration and Business Law. We have two convenient offices located at:
Alpharetta Georgia Office
5755 North Point Parkway
Suite 52
Alpharetta, GA 30022
Atlanta Georgia Office
Studioplex
659 Auburn Avenue Northeast
Atlanta, GA 30312
Copyright © 2014 | Coleman Legal Group, LLC | All Rights Reserved. Coleman Legal Group, LLC • 5755 North Point Parkway, Suite 52 • Alpharetta, GA 30022 • 770-609-1247 DISCLAIMER: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
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