If you are someone who is behind on your mortgage and you wish to keep the property, then Chapter 13 is the best option for you states Addison bankruptcy attorney. Chapter 13 will allow you to repay the mortgage arrears over a three-to-five-year period, provided you continue to make your regular mortgage payment from the date of filing going forward. At the end of the three-to-five-year period, you have essentially repaid your mortgage arrears and you will only owe your outstanding first mortgage once again. You can also reorganize other debts in a Chapter 13 bankruptcy, such as your car, student loans, recent taxes, parking tickets, child support, and other debts that would be non-dischargeablewhen you file Chapter 7 bankruptcy.
When you meet with your Chapter 7 bankruptcy attorney, you want to bring some information to your meeting. You want to have with you copies or information regarding all of your debt. You also want to have with you your most recent federal tax return and your most recent paycheck stub. From this information, the bankruptcy lawyer will be able to recommend whether or not Chapter 7 is a good idea for you. Income is important because there are certain income limits for filing Chapter 7 bankruptcy. Each state has a median level of income based on family size. If your income is below the state median, then you would typically qualify for Chapter 7 bankruptcy relief. If your income per household in your local area exceeds the state median, then you have to go through a means test calculation to determine whether or not you’ll have the ability to file a Chapter 7 bankruptcy. If you are slightly over the median income and you have a house and/or a car, then you are likely going to qualify for bankruptcy. If, however, you are way over the state median, then it’s very possible that you will not qualify for Chapter 7, and it will be determined that you would rather file a Chapter 13 and repay your debt over time. The reason for the means test is to separate those who really cannot afford to pay back their debt and should be entitled to a Chapter 7 fresh start and those who do have the ability to pay back either all or a portion of their debt over time and are better suited to file a Chapter 13 bankruptcy case.
Of course, you as the client have the ability to say, “I don’t want to file any of the types of bankruptcy cases.” I as the attorney have the duty and obligation to advise you of which chapter you qualify for and how it all works.