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If you are high on debt, you can apply for Chapter 13 bankruptcy in Raleigh, depending on your situation. While Chapter 7 bankruptcy is a more common option to eliminate debt, Chapter 13 is just as effective in developing a plan to repay all of your debts.
Chapter 13 Bankruptcy
Also known as the “Wage Earner Plan,” Chapter 13 bankruptcy allows those with a regular source of income to repay a portion of their debts as an alternative to liquidation. It safeguards the loss of assets and allows applicants to eliminate unsecured debts and resolve it within three to five years.
Chapter 13 bankruptcy is ideal if you have tax debt (since penalties will not apply). It is suitable for home arrearage or back payment of a mortgage.
Advantages of Chapter 13
Chapter 13 provides several benefits to the applicant. By filing under this chapter, individuals have an opportunity to stop the foreclosure of certain properties. Applying for Chapter 13 bankruptcy also gives you the following benefits:
- You can eliminate a big portion of unsecured debt.
If you have outlying credit card debt, student loans, or any loans without any collateral requirement, filing under Chapter 13 will help you pay for them in full through your plan.
- You will not incur interest or penalties on debt.
Even if you continue to incur debt, you are only required to pay back a small percentage of it without further interest or penalty.
- You will be granted an automatic stay on your assets.
Your bank accounts and salary will be free of garnishment, and there will also be no foreclosure of your house. This is particularly important if you are paying off a house or car.
Chapter 13 Eligibility
To qualify for Chapter 13, bankruptcy attorney in Raleigh, NC have enumerated the following requirements:
- Individual no more than $394,725 in unsecured debt, like credit card bills or personal loans.*
- No more than $1,184,200 in secured debts, including mortgages, car loans.*
Note, however, that an individual cannot file under this chapter or any other chapter if 180 days before the filing, a prior bankruptcy petition has been dismissed due to the debtor’s failure to appear before the court or to comply to the court’s order, or due to voluntary dismissal.
Filing Chapter 13
In filing under Chapter 13 bankruptcy, you need to pay a $235 filing fee to the court, and a $75 miscellaneous administrative fee. The court will also require the following:
- Your current creditors and their total claims
- The amount owed
- Your source of income
- You list of properties
- Your monthly living expenses
- Your tax information, including your last tax return and unpaid taxes
The benefits of filing under Chapter 13 can be tailored to your specific needs. With the help of some of the most reliable bankruptcy lawyers near Raleigh, NC, Chapter 13 can become a useful financial tool for you. Call Weik Law Office today at 919-845-7877 for a free consultation, and set up a time to speak with one of our professionals.
* Figure may be adjusted to reflect changes in consumer price index