Chapter 13 bankruptcy; an overview
Chapter 13 bankruptcy allows the claimant to keep his or her property and in return he or she must pay all or a goodly proportion of the debt over a period between three and five years. This is very different than Chapter 7 which is a form of bankruptcy that eliminates most debt but the debtor must surrender certain property to the trustee which is disposed of, the proceeds of which are used to pay the creditors.
To be eligible for Chapter 13:
Not everyone can opt for Chapter 13 bankruptcy in Utah. Chapter 13 requires that you must repay some or all of your debt and this must be done from income, as a result you must be in a position to prove to the bankruptcy court that you can actually meet the payments that is mutually agreed on. If your income is insufficient to meet this obligation or your income is not stable chances are the court will not allow you to file for Chapter 13.
You are also not eligible for Chapter 13 is you owe too much money. If your secured debt is over $1.15 million and your unsecured debt is over $383 thousand you cannot file.
Before you can file for Chapter 13 bankruptcy in Utah you must get credit counseling, this must come from an agency that is approved by the office of the trustee. These agencies are allowed to charge for their counseling services but are obliged to provide their service for free if you cannot afford to pay.
The repayment plan:
There are certain priority debts that must be paid in full, priority debts include such things as child support, any wages that are owed to your employer and some taxes. The plan must include regular payments that will be applied to secured debts such as your mortgage as well as paying any arrears.
The plan must show that money left over after paying the priority debt and secured debt will go towards the unsecured debt which includes medical bills, credit card debt, etc. It is not mandatory that these debts be paid in full.
The payment plan that is approved by the court is based on your income and your total debt. If your income is greater than the state median then you can propose a five year plan; if your income is less you can propose a three year repayment plan.
Once the repayment plan is completed any debts that are left will be wiped out and you will be discharged.
If you believe you qualify for Chapter 13 bankruptcy in Utah you will need to hire a seasoned attorney. You are invited to contact the Law office of Andrew B. Clawson, PC. And ask for a free evaluation of your case. For more information visit The Utah Bankruptcy Lawyer.