Saraland, AL Chapter 13 Bankruptcy Attorneys

If your debt has slowly crept up over the years until it became unmanageable, you’re not alone. A lot of people have made every payment on time, not realizing that they were in over their heads until they had little to no disposable income left each month. Chapter 7 bankruptcy isn’t a viable option for everyone, particularly those who earn too much money or want to keep their assets.

Wondering if Chapter 13 bankruptcy is the right solution for your financial struggles? The team at Padgett & Robertson is here to help you explore your options. Schedule a consultation now by calling us at 251-336-36955.

An Overview of Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a form of bankruptcy that restructures, rather than eliminates, your debt. It’s ideal for those with regular income who earn too much to qualify for Chapter 7 bankruptcy. The timeline for Chapter 13 is quite a bit longer than Chapter 7, as you do repay your secured debts and part of your unsecured debts over time. Instead of getting rid of your debt, Chapter 13 tries to make it more manageable by restructuring it.

A key benefit of Chapter 13 is how it lets applicants keep their assets. While Chapter 7 filers have to sell non-exempt assets in order to pay off part of their debt, Chapter 13 filers can usually keep all of their assets while repaying their debt. Much like a Chapter 7 bankruptcy, a Chapter 13 bankruptcy involves an automatic stay. This puts an immediate stop to debt collection calls and collection efforts, including foreclosure, wage garnishment, and repossession.

Eligibility for Chapter 13 Bankruptcy

Before deciding that this is the right choice for you, learn more about Chapter 13 eligibility to ensure that you qualify. Per the United States Courts, an individual can file for Chapter 13 bankruptcy as long as they have less than $2.75 million in debt. Applicants must have a regular source of income that will allow them to fulfill the terms of their repayment plan. Income may come from standard employment, self-employment, contract work, or other consistent work. Certain circumstances do disqualify an applicant:

• Filed for bankruptcy within the previous 180 days and had their petition dismissed for several disqualifying reasons

• Failure to complete a credit counseling course from an accredited agency

Repayment Plans

The repayment plan is the crux of any Chapter 13 filing. A repayment plan must be enough to catch up on missed payments of secured loans, but it must not be so aggressive that it leaves the borrower with too little to live on each month. A borrower’s disposable income determines how much they can pay each month. You can get your disposable income by subtracting your essential living expenses from your total monthly income.

Debts are separated into priority and non-priority debts. Priority debts are those that must be paid in full, such as back taxes, child support, and missed payments on secured loans. If you do not get caught up on your secured loans, you risk losing the secured asset because of the lien placed on it. Non-priority debts include credit cards and medical debt—unsecured debt, in other words. At the end of your repayment plan, you may have repaid some or none of your non-priority debts. Any remaining non-priority debt will be discharged.

Your repayment plan will last three to five years. The length depends on how much debt you have to repay and how much you can put towards payments each month. The trustee assigned to your bankruptcy case will collect payments and ensure that they are properly distributed to your creditors.

Benefits and Drawbacks of Chapter 13

It’s important to consider every aspect of Chapter 13 bankruptcy before signing anything. The benefits include:

• Ability to keep secured assets

• Eventual discharge of unsecured debt

• Easier to budget for one monthly payment instead of multiple payments

• Monthly payments limited to what is reasonable for your income

• Generally viewed more favorably than Chapter 7 bankruptcy when rebuilding your credit

There are also several drawbacks, including:

• Negative credit impact, although Chapter 13 doesn’t affect your credit as much as Chapter 7

• Takes three to five years to become caught up

• Strict budgeting often required to make your monthly payments

• Additional fees can make the repayment plan cost more than expected

• Plan may fail if you do not make your required payments

How Padgett & Robertson Can Help with Your Bankruptcy Filing

Choosing the right attorney for your Chapter 13 bankruptcy in Saraland is key to getting on track financially. Our focus on bankruptcy gives us the knowledge and experience needed to guide you to the best decision for your financial future. During your consultation, we’ll take an in-depth look at your finances and help you understand what options are available to you.

By handling the paperwork and documentation required for your filing, we will save you time and limit the stress that comes with any major legal matter. Throughout the entire process, you can rely on our guidance, regular updates, and professional advice. From creating a reasonable payment plan to handling the petition itself, we’re here for you.

We’ll also represent you at your bankruptcy hearings. We understand the stress and anxiety that can come with court appearances, no matter how routine they may be. Our goal is to protect your rights and best interests as you pursue a more secure financial future.

Our team is committed to providing ongoing support throughout this process. We know both how bankruptcy can improve your life and how much stress it can cause until everything is settled. Whenever you have questions or concerns, you can count on us to be there.

Explore Your Legal Options and Contact Us Now

Whenever you are ready to learn more about Chapter 13 bankruptcy in Saraland, the team at Padgett & Robertson is here to explain your options and help you come up with a plan. Get started right now by calling us at 251-336-3695 or filling out our online contact form.