Fairhope Chapter 13 Bankruptcy Lawyers

Bankruptcy isn’t always black and white. Perhaps you have enough money to make consistent payments, but not enough money to pay everything as it’s currently structured. In these situations, you’d likely make too much to consider Chapter 7 bankruptcy. However, you may find that Chapter 13 is the perfect solution for your financial needs.

Ready to discuss your debt options? Let’s review your finances and talk about what comes next. Call Padgett & Robertson at 800-303-1416 to set up a consultation with one of our Fairhope, AL Chapter 13 bankruptcy lawyers.

What is Chapter 13 Bankruptcy?

Before you start the process, it’s important to know what Chapter 13 bankruptcy is and how it differs from Chapter 7 bankruptcy, since Chapter 7 is what many people think of when they hear “bankruptcy.” Chapter 7 bankruptcy discharges all eligible debts based on your income, assets, and circumstances. It’s over in a matter of months and does not involve repayment of any debts unless you have non-exempt assets.

On the other hand, Chapter 13 bankruptcy is not a one-time discharge of your qualifying debts. It’s more of a debt restructuring. You’ll list out your debts, find a way to pay off the ones you must repay in a period of up to five years, and get that debt payment plan approved. How much you actually repay depends on which types of debt you have.

Priority Debt vs. Secured Debt vs. Unsecured Debt

Part of the Chapter 13 bankruptcy process is separating your debt into three types because the court approaches each of these debts separately:

• Priority debt: Priority debts are those that absolutely must be paid off in full and as quickly as possible. Common priority debts include back child support, back alimony, employee wage debt, and unpaid taxes.
• Secured debt: Secured debt is next in the hierarchy of debt. Your debt repayment plan must result in the repayment of all secured debt. A debt is considered secured if it is tied to the ownership of something or is backed by some sort of collateral. For example, an auto loan is secured by your car. A mortgage is secured by your home. If you fail to repay a secured loan, the bank will seize the collateral securing it.
• Unsecured debt: Unsecured debt is the least important in this list. It is any type of debt that is not secured by any assets or collateral. Common examples include credit cards, personal loans, medical bills, and utility bills. If you fail to pay an unsecured debt, the creditor can take you to court and get an order to garnish your wages or bank accounts. However, there is no physical property they can seize like there is with a secured debt. Depending on your income level and how much of your available income is used on secured debt payments, you may pay back none, some, or all of your unsecured debt by the end of your repayment plan. Anything that is not repaid by the end of your payment plan is discharged.

What to Expect During the Chapter 13 Process in Fairhope

When you begin the process, you’ll take a credit counseling course. The goal of this is to give you a healthy and appropriate approach to your debt and finances moving forward. After that, you’ll work on your bankruptcy petition and repayment plan.

This is the bulk of the work, which is one of the reasons you should hire a Fairhope Chapter 13 bankruptcy attorney to guide you through this process. The paperwork covers your assets, debts, property, and income. Creating your repayment plan is perhaps the most challenging part of the entire process, as the court sets stringent requirements for repayment plans.

From there, you will move on to filing the necessary paperwork, including the petition, repayment plan, and related documentation. A bankruptcy trustee will take your case, analyze all of your paperwork, and determine whether or not your payment plan meets all legal requirements.

Once you file the bankruptcy petition, the automatic stay goes into effect. The automatic stay forbids creditors from contacting you to try to collect any debts. This gives you some breathing room as you prepare to start your payment plan.

You will be required to attend the meeting of creditors, which is also known as your 341 meeting. Although creditors can show up to the meeting, ask questions, or object to your repayment plan, it is fairly uncommon for creditors to show up.

Once your plan is approved, you will need to stick to it and make all scheduled payments. The bankruptcy trustee may have other requirements they expect you to meet. Before your case is closed, you’ll need to take a personal financial management class. Upon completion of your payment plan, the court will discharge any remaining unsecured debts and close your case.

How We Can Help

As you may have gathered from the overview of Chapter 13 bankruptcy, this entire process is very complicated. You need to calculate and catalog your debts appropriately, meet the court’s stringent debt repayment plan requirements, meet all required deadlines, complete the appropriate coursework, and communicate with the court as needed.

This is a lot to handle, especially with a career, a family to take care of, and all of the other obligations in your life. Any minor error or setback could force you to redo certain forms or steps of the process, and serious errors could put your entire case in jeopardy.

When you choose Padgett & Robertson, you can focus on your financial future while we tackle the legal aspects of your bankruptcy. We’ll provide insight, options, and guidance every step of the way, so you can concentrate on fulfilling your other obligations while taking steps to manage your debt.

Choose the Team at Padgett & Robertson

Our team of Fairhope Chapter 13 bankruptcy attorneys is here to support you as you take control of your financial future. We’re ready to discuss your options and help you come up with a plan that meets your financial needs. Schedule a consultation now by calling us at 800-303-1416 or sending us a message online.