ARKANSAS CHAPTER 13 BANKRUPTCY
Chapter 13 is what is commonly referred to as a “restructuring” or “wage earner” bankruptcy. In simple terms, a person who files Chapter 13 is saying that they have some ability to repay creditors, unlike Chapter 7, but cannot repay all of their debts as they are currently situated.
In Chapter 13 your debts are reorganized into one, more affordable payment. Secured debts on things like vehicles, furniture and other property are repaid under terms proposed by your case rather than the terms of the contract.
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For example, if you have 33 months remaining on a car note that is set at 14% interest, that debt will be restructured under a bankruptcy plan that will be from 36 to 60 months in length and the interest rate will be a bankruptcy specific interest rate that is at current no higher than 5.25% and is frequently lower than that.
Unsecured debts like credit cards or medical bills, unless required by law, typically do not receive a specific payment or percentage that they are to be paid. Your home debt can be left out of a Chapter 13 payment if you are current on the home, otherwise it will be paid through the plan and a certain portion will be paid each month to catch up missed payments.
Who Can File Chapter 13 Bankruptcy?
Typically, people who choose to file under Chapter 13 are doing so because their income mandates that they must or they are trying to reorganize their secured debt and prevent a foreclosure, repossession or garnishment.
Chapter 13 will also freeze interest and penalties on tax debts and allow you to repay them through the Chapter 13 plan. Because most creditors receive something under Chapter 13, some creditors have a “preference” for this type of case and the law certainly has a preference for it. One of the major thrusts of the most recent change in the law was to force more people to file under this Chapter. Chapter 13 is extremely useful for averting foreclosures, repossessions, garnishments and tax levies.
Chapter 13 Payment Details
What your specific payment would be in Chapter 13 is entirely dependent on your individual circumstances and the facts of your case. The absolute minimum monthly payment available is around $100.00 per month for 36 months at this time but the facts and circumstances of your individual case determine your payment.
To determine your payment you must look at what you are trying to pay for and also how much disposable income you have left each month after reasonable living expenses. Our firm has focused on this area of law for years and we can usually pinpoint very accurately what you payment will need to be to successfully complete the case. All or most of your attorney’s fees are typically paid through your set, monthly payment.
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In Chapter 13, a Trustee is appointed by the government to take your monthly payment and disburse the funds to the creditors in the order they are entitled to funding. In addition to processing your monthly payments, the Trustee will also verify that you have completely and accurately filled out your bankruptcy paperwork as well as verifying that you have met other filing requirements.
FREE INITIAL CONSULTATION
Of course, the information contained on this website is merely general information and the facts and circumstances of your individual case may vary and should contact us to receive proper legal advice. For specific personal Arkansas bankruptcy law information contact our office to arrange a FREE consultation.
Bankruptcy Discharge
What is Bankruptcy Discharge?
A discharge is the primary reason why people file a bankruptcy case. Upon the successful completion of a bankruptcy, you will receive a “discharge” of your debts. This discharge prevents creditors from ever trying to collect the debt again.
There are certain types of debt that are not usually or ever discharged and some types of debt for which the discharge has only a partial impact. There are of course other reasons to file a bankruptcy, such as the opportunity to catch up payment on secured debts, but discharge is the primary “reward” for filing.
Discharge prevents creditors from collecting, but it does not prevent you from voluntarily repaying the debt if you so choose. Discharge binds the creditor, not you.
What Can Be Discharged in Bankruptcy?
Typically, although circumstances may vary, all credit card debt, medical bills, service contracts, taxes over three years old (subject to circumstance and nature of tax debt) and most other forms of “unsecured” debt are discharged by a bankruptcy.
You can also discharge “secured” debts, such as vehicle debt, home debt and other debt for property purchased, IF you are willing to surrender the property.
You cannot keep a home or car and not pay for it. A bankruptcy discharge only discharges you of debt for property that you are not keeping. Of course, your individual circumstance and the facts of your case may have an impact on this information.
Which Debts Are Not Discharged?
The primary debts that are not discharged that affect many people are debts for child support, alimony, taxes that are less than 3 years old and student loans.
Other types of debt can be non-dischargeable as well. The facts of each case vary and you will need to consult with a qualified, experienced attorney to be certain.
How to Stop Harassing Creditor Calls
The calls will stop very shortly after a bankruptcy case is filed. Please understand that merely coming to see an attorney cannot stop the phone calls, a case must actually be filed in order to actually stop the creditors from calling. Our authority to stop that ringing phones comes from the Federal District Court in which your bankruptcy case is filed and the authority given by the United States Bankruptcy Code.
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When a bankruptcy is filed, the Court imposes an “automatic stay” upon collection activities. In simple terms, a stay means exactly what it sounds like; it makes a creditor stop in their tracks and any and all further collection action must pass through the bankruptcy Courts if the action will be allowed at all. The ringing phone has usually grown silent within a matter of days of the bankruptcy filing. This is because the Court has mailed notices to these creditors telling them that further collection activities may result in large fines. Even the most ignorant and abusive collection agent will stop calling within a week to 10 days of the filing – unless they just enjoy being hauled in front of a Federal Judge and being berated.
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Please remember that, given the extensive documentation needed to file bankruptcy pursuant to the law changes enacted in 2005, the filing process can take anywhere from 1 day to 2 weeks depending on how prepared you are to file and how quickly you do what we ask you to do. If your phone is ringing off the wall and the stress is eating at you, stop the abuse.
FREE INITIAL CONSULTATION
Of course, the information contained on this website is merely general information and the facts and circumstances of your individual case may vary and should contact us to receive proper legal advice. For specific personal Arkansas bankruptcy law information contact our office to arrange a FREE consultation.