Bankruptcy is a solution that gives people who are facing serious financial problems the chance to get out of debt while treating creditors fairly. Chapter 13 bankruptcy is a type of debt reorganization that allows people with significant debt to keep their property and reduce or eliminate payments on secured loans, such as a mortgage or car loan, as well as unsecured consumer debt, such as credit cards and medical bills.
The Best Chapter 13 Bankruptcy Attorney in Phoenix Arizona
If you are considering filing for bankruptcy, it is important to have an experienced Chapter 13 bankruptcy lawyer represent you. The attorney can help you develop a debt repayment plan that works best for your situation. The lawyer can also help you negotiate with your creditors and prepare your case for approval by the court.
Current Monthly Income (CMI)
The amount of your income that you can afford to pay to unsecured creditors in your Chapter 13 bankruptcy plan is determined by the disposable income test. Disposable income is the amount of money you have left after all your regular living expenses are covered. This amount can include your income from employment, social security, alimony or child support, and any other source of income you may have.
Confirmation hearing and payment
After you file your Chapter 13 bankruptcy petition, you must meet with creditors and your Chapter 13 bankruptcy trustee to discuss your financial circumstances and develop a plan. This meeting is called the “meeting of creditors” or “motion for confirmation.”
During this meeting, your bankruptcy attorney will explain your debt relief options and assist you in developing an effective plan. Your attorney will also make sure that you comply with all the requirements of your bankruptcy.
Once your Chapter 13 plan is approved by the court, it becomes legally binding on you and your creditors. You will then make payments to the trustee under your plan for three to five years, and you will receive a discharge of your remaining qualified debts at the end of this period.
Loss Mitigation Plans
A loss mitigation plan is a special type of plan that can be used in Chapter 13 cases for certain types of mortgages. These plans are often necessary for individuals with high amounts of mortgage arrears, and for clients who have a home that has lost significant value since their original purchase or foreclosure.
In these cases, a client can seek to have the lender modify their mortgage and agree to an affordable payment that is based on what they could pay on an alternative property. The lender’s attorneys can oppose the motion for loss mitigation, but if they do not, it will be granted and allow a client to cure their mortgage arrears in a Chapter 13 case over a 5 year plan that is binding on their mortgage lender.
The process of obtaining a loss mitigation plan is extremely complicated and requires the expertise of an experienced lawyer to ensure that the client’s case is feasible and a success.