CHAPTER 13 BANKRUPTCY ATTORNEYS IN FAYETTEVILLE AND FORT SMITH, ARKANSAS

Facing the possibility of bankruptcy is overwhelming. However, it’s more common than you may realize. According to the United States Courts, over 278,000 Chapter 13 bankruptcy petitions were filed in 2019. Chapter 13 bankruptcy is a smart way to alleviate the burden your debts may be having on you and your future.

For nearly 30 years, we’ve advised clients in Fayetteville, Fort Smith, and the Arkansas River Valley on their financial paths. Let us help you on your journey as well. Contact Bond Law Office today to schedule a free consultation regarding your debt relief options with Chapter 13 bankruptcy.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows individuals with a steady income to create a plan to repay all or part of their debts. In exchange for debt relief, filers of Chapter 13 bankruptcy must pay their discretionary income to their creditors over the course of a three- to five-year repayment plan. During this allotted time, creditors are forbidden from starting or continuing collection efforts.

When is Chapter 13 Bankruptcy a Good Debt-Relief Option?

Filing for Chapter 13 bankruptcy is a wise option for those who earn a significant income or want to protect valuable property. It differs slightly from Chapter 7 bankruptcy, which is typically utilized by individuals with little income remaining at the end of each month and minimal assets. Chapter 13 bankruptcy is meant for those whose largest dilemma is dealing with creditors’ demands for immediate payment, not lack of income.

What Does Chapter 13 Bankruptcy Do?

Chapter 13 bankruptcy allows filers to catch up on missed mortgage, car, and nondischargeable priority debt payments. By making installments to creditors over a three- to five-year period, filers are able to safeguard their assets from repossession or foreclosure.

What Doesn’t Chapter 13 Bankruptcy Do?

Like every other type of bankruptcy, filing for Chapter 13 bankruptcy will not erase all your debts. Dischargeable debts must be paid in full as part of your payment plan. If they are not, the total balance will remain at the end of your bankruptcy case.

Qualifying for Chapter 13 Bankruptcy

Not everyone will be eligible for Chapter 13 bankruptcy. A few requirements of filers include:

• Steady income

• Debt limits

• Not being a business

An experienced bankruptcy attorney will be able to answer any questions you may have regarding Chapter 13 bankruptcy eligibility.

How to File for Chapter 13 Bankruptcy

Your Arkansas Chapter 13 bankruptcy case will begin by working with an attorney to file a petition with the bankruptcy court serving the area in which you reside. The petition will include:

• Schedules of your assets and liabilities

• A schedule of your current household income and expenditures

• A schedule of any executory contracts and unexpired leases

• A statement of your financial affairs [Fed. R. Bankr. P. 1007(b)]

Your attorney will also help you to satisfy additional requirements including:

• Presenting a certificate of mandatory credit counseling education from an agency approved by the U.S. Trustee’s office;

• Filing a copy of any debt repayment plan developed through credit counseling;

• Providing evidence of payment from employers, if any, received 60 days before filing;

• Providing a record of any interest you have in federal or state qualified education or tuition accounts; and

• Taking a second “debtor education” course once you’ve filed your case.

Your Chapter 13 Bankruptcy Repayment Plan

If your current monthly income is less than the Arkansas state median, your plan will be for three years unless the court approves a longer period "for cause." If your current monthly income is greater than the state median, your plan generally must be for five years.

Your creditors and an appointed bankruptcy trustee will have an opportunity to object to the proposed plan. If edits are made to their collective satisfaction, the court will likely approve the plan at your confirmation hearing. The plan must meet the following qualifications:

• The plan is feasible.

• You proposed the plan in good faith.

• The plan complies with bankruptcy law.

You won’t wait until confirmation to start completing your monthly payment, however. Your payments will begin the month after you file.

How an Experienced Bankruptcy Attorney Can Help

Filing for Chapter 13 bankruptcy is tricky. Working with a bankruptcy attorney will be the best investment you make in your debt-relief process. A knowledgeable attorney will be able to advise you and give their professional input throughout the process.