For individuals or sole proprietor's, Chapter 13 provides for full or partial repayment of your debts over a three- to five-year time period with protection from their creditors. To declare this type of bankruptcy, you'll need a stable income with "disposable income." Disposable income is income left over after you pay for basic life requirements, such as food and utilities.
For debtors with disposable income, a Chapter 13 bankruptcy, known as a "Wage Earners Plan," allows a debtor to protect valuable assets and also assist a debtor who has fallen behind on his or her mortgage or car payment to catch up on those payments through a reorganization plan. A Chapter 13 is also very valuable to assist in repaying the IRS, possibly stopping interest and penalties. In this plan, a debtor proposes to pay back his or her creditors over a period of time. The plan is presented to a bankruptcy judge for approval and upon approval is administered by a Chapter 13 trustee. The Chapter 13 trustee collects and distributes funds paid by the debtor to all of his or her creditors based on the plan approved by the Bankruptcy Court. Payments on long-term debt (for example, a mortgage on a home being retained) must continue at their contract rate after the filing, in addition to the Chapter 13 plan payment. Often times, clients pay little or nothing to credit card companies. The Alpharetta Bankruptcy Lawyers at Hait, Eichelzer & Kuhn can help you get a fresh financial start.
You'll go through a "means test" to determine the amount of debt you'll have to pay back and how long you have to do it. The courts make their determination based on your income. If your income is more than the median income in Georgia, the repayment period will most likely be five years. No plan exceeds five years. People who have Mortgages, tax debt, pay child support or pay student loans often file Chapter 13 bankruptcy. Also, if you have filed a Chapter 7 within the past 8 years, you can file for Chapter 13.
To file for Chapter 7 or Chapter 13 bankruptcy, you must first file a petition in Bankruptcy Court. You must bring a list of creditors, assets and liabilities and current income and expenses. You must also file a "Statement of Financial Affairs." It must provide the following: