Chapter 13 Bankruptcy Lawyer Phoenix, AZ
When filing for personal bankruptcy, Chapter 13 and Chapter 7 are the primary options available to individuals who don’t own a small business. While Chapter 7 focuses on liquidating assets to pay creditors and then discharging most remaining debts, Chapter 13 takes a different approach. If you earn a decent living and/or you own any luxury property, chances are that filing for Chapter 13 bankruptcy will be the best option for you. However, it’s important to speak with an experienced Chapter 13 bankruptcy lawyer Phoenix, AZ residents trust before committing to any particular option. Working with the team at Kamper & Estrada, PLLC will allow you to understand the debt relief alternatives available to you and will allow you to ask questions about each option. Once you’ve committed to a plan of action, our team can help you through every step of the debt relief process.
Restructuring Debts So They Can Be Repaid
Many people who need to file for bankruptcy have the ability to repay their debts when those debts are restructured according to a manageable repayment plan. That’s the guiding principle of Chapter 13 bankruptcy. Rather than simply discharging debts, filers of Chapter 13 work with a Phoenix, AZ Chapter 13 bankruptcy lawyer and a bankruptcy trustee to negotiate with creditors and come up with a payment plan that can be completed within three to five years.
If balances of unsecured debt are not completely paid off by the end of the repayment period, the remaining balances are often forgiven (discharged). Exceptions to discharge include student loans, child support/spousal support payments and certain taxes. However, the ability to have certain debt balances discharged is not the only advantage of Chapter 13 bankruptcy.
Keeping Your Property
When you file Chapter 7, you agree to liquidate certain assets to partially repay creditors. With Chapter 13, you don’t need to forfeit any assets so long as you can continue to afford them (making car and mortgage payments, for example).
On that note, you should be aware that it is critical to make payments every single month on your court-approved repayment plan. Missing payments or underpaying could lead to dismissal of your plan, leaving you right back where you started. It is therefore important to work with an experienced Phoenix, Arizona Chapter 13 bankruptcy lawyer when constructing a repayment plan that is truly manageable. The last thing you want is to default on your repayment plan, as doing so will leave you in a worse position than you are now.
Chapter 13 May Be Your Only Option For Bankruptcy
Some people will need to make the decision about whether to file Chapter 7 or Chapter 13, and that decision should be made in consultation with a Phoenix, Arizona Chapter 13 bankruptcy lawyer. But for others, there will be no decision because they don’t qualify for Chapter 7.
Each person seeking bankruptcy is subject to a “means test,” which determines your ability to repay debts (based on income, family size, monthly expenses, etc). If you make too much money or otherwise don’t qualify for Chapter 7, Chapter 13 will likely be your only option. The good news is that it is a powerful tool to help you get out of debt and make a fresh financial start.
Although the process of Chapter 13 takes much longer than Chapter 7 (3-5 years as opposed to several months), the damage to your credit score is lower with Chapter 13. It stays on your credit report for only seven years instead of 10.
The Right Attorney Makes a World of Difference
Whether you are committed to filing for bankruptcy or you’re interested in an alternative form of debt relief, you need to work with an attorney you can trust and feel comfortable with. Our Phoenix, AZ Chapter 13 bankruptcy lawyer team understands bankruptcy law in detail and will work to find the best solutions for your unique situation. And, though it should go without saying, we will never judge you for your debt challenges. Our job is to help you weather these challenges, not to question why they arose in the first place. We look forward to speaking with you.
3 Myths About Business Bankruptcy
If your business is in debt and you can no longer make the payments on your loans or credit cards, then you need to think about a debt settlement or you may want to consider bankruptcy. Before you do, it’s important to dispel the myths that often force business owners to back out of bankruptcy.
You Will Lose Your Personal Assets
When you file for business bankruptcy, it should not affect your personal finances or assets. The exception is if you are a sole proprietorship, then your business and your personal assets are the same. When you have a corporation, then your business’s assets are separate from your personal assets. The business is its own entity. This means that if you file for bankruptcy, you do not have to touch your personal assets.
Now, if you put your home up as collateral for a business loan, this could become more complicated. This is why it is important to talk to a bankruptcy attorney when you are thinking about filing for bankruptcy.
You Could Face Jail Time
A lot of business owners worry about jail time if they cannot pay off their debts. They might avoid bankruptcy and continue to try to pay all debts, despite the severe loss that they are taking trying to stay above water. The reality is that you cannot go to jail for debt. Now, if you falsify your records or steal from the business to pay your debts, then you could be in trouble. If you’re having financial trouble, even as a business, it is not illegal. Be honest about your financial issues and be open if you decide to file for bankruptcy.
You Will Lose Your Business
One of the number one reasons that business owners avoid bankruptcy is because they do not want to lose their business. Your business can still survive after bankruptcy. When you discuss your options with a lawyer, he or she will lay down which plans are most beneficial for you and you can work out what plans might save your business. For instance, you may need a better debt repayment plan to get your business back on its feet.
Bankruptcy is a big decision but it does not have to be a scary one. You can use bankruptcy as a tool to get your business out of debt. To find out more about whether bankruptcy is a good idea for you, consult with a bankruptcy lawyer, like a bankruptcy lawyer in oday.