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Chapter 7 Bankruptcy Versus Chapter 13 Bankruptcy

The first step to determining which type of bankruptcy is right for you is to consider the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both have advantages and disadvantages depending on your specific circumstances. Lake County bankruptcy lawyers can explain what those are.

The Main Difference Between Chapter 7 and Chapter 13 Bankruptcy

In a Chapter 7 bankruptcy, your assets and debts are liquidated. In a Chapter 13 bankruptcy, your debts are reorganized. The primary difference between the two types of bankruptcy is that with a Chapter 13 bankruptcy, you’ll have to repay a percentage of your debt over the course of three to five years.

When Does Chapter 7 Make Sense?

Chapter 7 bankruptcy probably makes sense if:

- Most of your debts are unsecured and can be discharged. These include credit cards, personal loans and medical bills.
- You own little or no non-exempt property.
- To hold on to secured property, you don’t need to cure defaults.
- Your disposable income isn’t enough to fund a Chapter 13 plan.

When Does Chapter 13 Make Sense?

Chapter 13 bankruptcy probably makes sense if:

- You would like to hold onto non-exempt assets.
- You have debts that can’t be discharged, including student loans, child support, alimony, taxes, fines and penalties.
- You have high amounts of net disposable income.
- You would like to cure a car loan or mortgage default.

Is Qualifying for Chapter 7 Difficult?

Experienced Lake County bankruptcy attorneys can help you determine if you’ll qualify for Chapter 7 bankruptcy. To qualify, you must pass a means test to prove that you can’t repay your debts. Lake County bankruptcy lawyers can help you complete a Statement of Monthly Income and Means Test Calculation that will assess your income and set-offs to determine how much can be paid to creditors. The form examines your average income from all sources for the last six months. If you and your spouse file together, both of your incomes will be counted. If you’re filing alone, your spouse’s income will still be counted subject to certain set-offs.

Hire Skilled Lake County Bankruptcy Attorneys

If you’re buried in debt, bankruptcy may be the answer. Call Merideth Nagel, P.A., Attorney at Law at 352-404-4634 or 877-580-6868 today.

Modifying Chapter 13 Debtor’s Repayment Plan or Suspending Payments

Bankruptcy attorney in Lake CountyAt any point before confirmation, you may modify your Chapter 13 bankruptcy repayment plan. The modified plan just has to contain the essential terms. A bankruptcy attorney in Lake County can assist you to ensure that your case isn’t delayed.

After Confirmation of Plan

Once confirmation has occurred, a Chapter 13 repayment plan may be modified at the request of you, your trustee or by the holder of an unsecured claim. A hearing will occur, and the request must be approved by the court. Whoever is seeking the modification must provide all creditors and the trustee with at least 21 days’ notice of the impending hearing, and a copy of the modified plan must be included along with the notice. An objection may be filed by any party of interest, and it must be served on the trustee, the debtor and on all creditors. It is permissible to reduce the required payments by the amount you spend to buy health insurance for you and your family. Before incurring a new debt after the approval of your plan, you must receive permission from the trustee.

Suspending or Amending Payments from a Confirmed Plan

A court motion is needed to amend or suspend payments from a confirmed plan. The request may be made as long as the suspension won’t extend the plan by more than 60 months. To amend or suspend your payments, your financial circumstances must have changed, and the change must be outlined in the motion papers. You must attach proof of the change in circumstances to the motion papers along with updated versions of Schedules I and J. Also, a proposed amended plan must be included. In some jurisdictions, the Chapter 13 trustee must approve the modification. Copies of the motion papers need to be served on the trustee and all creditors who will be adversely affected by the modification or if the suspension will exceed 90 days. Your bankruptcy attorney in Lake County may request supplemental fees for modifying your repayment plan.

Hire an Experienced Bankruptcy Lawyer in Lake County Now

A bankruptcy may give you the fresh financial start you need. Contact Merideth Nagel, P.A., Attorney at Law at 352-404-4634.

Can I File for Bankruptcy Without an Attorney?

When a business files for bankruptcy, an attorney is required; when individuals file, they have the option of representing themselves. However, representing yourself is not always beneficial. The rules pertaining to bankruptcy are complex and you can severely jeopardize your rights if you make mistakes. Visit with a Minneola bankruptcy lawyer today to determine if legal representation is best for you. 

How to Determine your Monthly Expenses in your Bankruptcy Case

If you are filing for bankruptcy, an experienced Lake County bankruptcy lawyer can help you determine your monthly expenses. This process may seem daunting, but your attorney is experienced in navigating the process and will make sure you will be able to calculate your expenses appropriately.

One method of helping your bankruptcy claim is by reducing your current monthly income (CMI). If your income is greater than the median income according to the tables, the IRS allows you to deduct the following:

- Necessary living expenses
– Living allowances

These are established in their National Standards and Local Standards. The IRS will then use the standards to determine your ability to pay any taxes you owe.

The Local Standards determine roles for deducting the following:

- Housing
– Utilities
– Transportation

The Local Standards, which are also known as Collection Financial Standards, vary by state and, in some cases, by county.  By contacting us we can inform you of any implications that may affect you.

Some housing and transportation expenses are listed separately under secured debts. These expenses include car payments and mortgages. Any amount you spend on car payments and mortgages must be included in the secured debt section. If the amount of your payment is greater than the cost of owning your vehicle, then enter a zero. The form will not recognize negative numbers.

Vehicle transportation is a different matter entirely. These do not vary by state, but by region (Northeast, Midwest, South and West). These amounts are listed in the Local Standards. Keep in mind the figures for owning and driving multiple vehicles. This includes operating costs, as well as public transportation costs.

For more information on how you can determine your monthly expenses in your bankruptcy case, contact Lake County bankruptcy lawyer Merideth Nagel, P.A., Attorney at Law at 352-404-4634, or toll free at 877-580-6868.

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