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Chapter 13 Bankruptcy Eligibility

Bankruptcy Attorney in St. Louis, Missouri

Chapter 13 bankruptcy is one of the most powerful debt-relief options that allow you to regain control of your financial life and get a meaningful fresh start. Most debtors choose to file Chapter 13 bankruptcy to solve their financial problems. However, not everyone is eligible to file for this bankruptcy chapter. This form of bankruptcy is mostly beneficial to debtors with valuable assets and a high source of income. A knowledgeable Missouri bankruptcy attorney can help you assess your finances and determine whether filing for Chapter 13 bankruptcy can solve your debt problems. 

For decades, Westbrook Law Group has been providing legal services to individuals and companies who are going through bankruptcy. We develop custom plans and strategies depending on the client’s goals and needs. We will guide you every step of the way until you obtain financial freedom and start over a debt-free life. 

Call us now at 636-245-2997 and schedule a free initial consultation.

 

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy involves reorganization and repayment of debt. It refers to a United States bankruptcy proceeding that allows you to develop a repayment plan lasting for three to five years. The bankruptcy court must approve your plan for you to enter Chapter 13. This type of bankruptcy gives you a chance to repay your creditors without losing your valuable assets and property. It helps bankrupt individuals or business entities eliminate all or a part of their debt or to help them pay back a portion of what they owe. 

Most Chapter 13 bankruptcy cases are highly effective in allowing debtors to reorganize and reduce debt over three to five years while being protected from their creditors. Once you declare bankruptcy, an automatic stay will take place. It prevents any acts of collection, litigation, wage garnishment, repossession, or foreclosure by creditors and collection agencies.

If you fall behind on your mortgage payments and are in danger of foreclosure, the Chapter 13 repayment plan will help you make up those payments and save your home. Some of your secured debts such as car loans may be extended throughout the Chapter 13 repayment plan period. Stretching out the payment plan will help reduce your monthly payments.

In Chapter 13 bankruptcy, a trustee will be assigned by the court to review your proposed debt payment plan and assess its compliance with bankruptcy laws. The plan must include details about your income, expenses, debts, and assets. In addition, the trustee must ensure that all the terms in your Chapter 13 repayment plan will be followed. Once your plan is fully approved by the court, you will be bound to the terms of the plan for three to five years.

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When you’re in debt, it’s difficult to focus on anything else. But there are steps that you can take to get out of debt – even if your credit is damaged or your income has been cut off completely! Call our St. Charles bankruptcy attorneys at Westbrook Law Group to find out how to escape the shackles of debt and get relief in Missouri.

Who Can File for Chapter 13 Bankruptcy?

Chapter 13 bankruptcy comes with a lot of benefits that can help you solve your financial problems. However, this chapter does not work for everyone. There are certain requirements that you must meet before you qualify for Chapter 13 bankruptcy. Consulting a reliable bankruptcy attorney in St. Louis MO can help you determine whether or not Chapter 13 is a good fit for you.

Debt Limits

You cannot file Chapter 13 bankruptcy if your debts are too high. The amount of your secured and unsecured debts must not exceed the debt limit of your state. Keep in mind that the limit may be subject to change every three years.

Regular Income

Chapter 13 bankruptcy requires you to have a regular income to follow the terms of the court-approved repayment plan. You must have sufficient disposable income to pay for unsecured debts like alimony, child support, student loans, and tax filings. Furthermore, mortgage and auto loan payments must be kept current during the repayment period.

 

What Is the Average Monthly Payment for Chapter 13?

There are several factors that you need to consider when calculating your average monthly payment for your Chapter 13 plan. The payment amount is generally based on your ability to pay. A seasoned bankruptcy lawyer in Missouri can help you know more about the details of your repayment plan.

To calculate the average monthly payment, you need to know the total amount of your debt, your disposable income, and the value of all your assets that cannot be protected by a bankruptcy exemption. Aside from the salary that you earn from your employment, your income from social security, disability, unemployment, veterans, retirement benefits, and rental income may also be considered. 

Your disposable income can be calculated after subtracting the allowable living expenses and required monthly payments from your gross income. You’ll have to pay this amount every month as part of your Chapter 13 repayment plan that lasts for three to five years. Your court-appointed bankruptcy trustee will be responsible for collecting payments and distributing them to your creditors according to the approved schedule in the repayment plan. 

If you fail to make monthly payments on time, your bankruptcy case will become more complicated. Keep in mind that it is crucial to follow the terms of the approved repayment plan to increase your chances of receiving a bankruptcy discharge. When you complete your Chapter 13 repayment plan, you’ll receive a discharge order that will wipe out the remaining balance of your qualifying debts.

 

How Does Chapter 13 Bankruptcy Affect Your Credit Score?

Bankruptcy comes with both benefits and consequences. As long as you complete the court-approved repayment plan, you can keep your valuable assets. You can avoid car possession, home foreclosure, wage garnishment, and asset liquidation. However, filing for Chapter 13 bankruptcy can damage your credit score. It will remain on your credit report for 7 years. 

Although you cannot do anything about the time bankruptcy remains on your credit report, bear in mind that the effect of bankruptcy on your credit history will gradually decline and fade with time. There are several ways to improve your credit score after bankruptcy. You need to make monthly payments on time because your payment history has the greatest impact on your credit score. It is one of the best ways to rebuild your credit and prove that you can be financially responsible.

 

Speak to our Experienced Missouri Bankruptcy Lawyers Now!

Filing for Chapter 13 in Missouri is a complex process. The decision to file for bankruptcy is important and it should not be taken lightly. It requires knowledge and expertise about the bankruptcy laws and rules of the state. Understanding the details and requirements to file for Chapter 13 bankruptcy can be confusing. Meeting these requirements is just one of the numerous initial steps when filing for bankruptcy. 

To ease the burden of filing Chapter 13 bankruptcy, it is highly advisable to seek legal help from our competent St. Louis bankruptcy attorneys at Westbrook Law Group. Our bankruptcy law firm will help you maximize the benefits of Chapter 13 bankruptcy filing. We provide free initial consultations, during which we will determine if filing Chapter 13 bankruptcy is the right move for you

We will assist you in creating an affordable repayment plan that will work for you based on your current financial situation. We will represent you during the court hearings and creditors’ meetings and ensure that your needs and goals will be pursued.

Schedule a free initial consultation now by dialing 636-425-2997.

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