Chapter 13 Bankruptcy Baton Rouge

Not all is lost when undergoing a financial crisis, as filing a bankruptcy claim can help those even in the worst fiscal circumstances recover their economic stability. Often, knowing which is the right bankruptcy chapter to file is confusing for first-timers. Generally for bankruptcy in Louisiana, if you hope to keep your property and are behind on business expenses and mortgage payments, then a Chapter 13 bankruptcy would work in your favor. Not everyone qualifies for this, which is why consulting with a chapter 13 bankruptcy lawyer will help. 

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For those who are lost in the process of filing a case, bankruptcy lawyers in Baton Rouge can provide which direction to take. Contact an experienced Chapter 13 attorney today at Murray & Murray.

Background Information on Chapter 13 Bankruptcy

Chapter 13 bankruptcies help debtors manage loans they fell behind on. Here’s how they work.

What is Chapter 13 Bankruptcy? 

This type of bankruptcy allows for the plaintiff to catch up on their overdue payments over a designated amount of time. This way loans and mortgages that are delinquent can be reinstated and placed back in good standing. Basically, a chapter 13 bankruptcy is designed so that the debtor can outline a 3 to 5 year repayment plan, where creditors offer to take on some parts of the debt by shaving off the debtor’s future income. This helps to avoid foreclosure, interest accrued, additional missed payments, as well as other costly expenses. The debtor enters in to an automatic stay, which prevents debt collectors from taking action on debts when under a declared bankruptcy. If the debtor is able to be consistent with this agreement, all the remaining debt is discharged and let go of at the end of the repayment plan. 

Do You Qualify to File Chapter 13?

If Louisiana bankruptcy exemption laws don’t cover your property, a chapter 13 bankruptcy would work for you. The entire amount due to creditors will have to be as much as a chapter 7 bankruptcy proposal. In order to know whether a chapter 13 is in store, the debtor must follow the Louisiana Means Test and have a consistent source of income. This goes by the Louisiana median income average and takes into consideration the debtor’s disposable income. If the average income is over the Louisiana household median then the means test must be applied. Chapter 13 is mainly designed for individuals who have more equity in their assets that aren’t fully covered by Louisiana bankruptcy laws. If someone wants to keep their secured assets, this is a better route than a chapter 7 bankruptcy, which results in liquidation. 

Facts About Chapter 13 Bankruptcy 

Chapter 13 bankruptcies are slightly different from chapter 7 bankruptcy proposals. A chapter 7  bankruptcy is designed to liquidate assets and eliminate a financial burden without additional payments, while chapter 13 creates an affordable route to keep secured assets. Chapter 13 is also called a debt adjustment. This is where the debtor must file a plan for the repayment of parts of his or her debt, with the amount coming from an established income source. It can be filed by a married couple jointly or filed individually by each household member. This proposed payment plan mainly displays how some of the past due debts will be covered over the span of 3 to 5 years. In this payment plan, valuable property like a house or car is held onto. Typically, the payments are just about the same amount as former payments on car loans and mortgages. This is to help the debtor manage debts they have fallen behind on, rather than paying off the entire debt. After the plan has expired, the remaining debt is forgiven and extinguished from records. 

How an attorney can help you

In the case of Louisiana bankruptcies, a chapter 13 lawyer can help identify whether you qualify for this style of bankruptcy case or not. Murray & Murray chapter 13 attorneys are both experienced and knowledgeable; they have successfully dealt with many bankruptcy cases over the years. We can advocate for your case and put together a decent proposal that debtors will review. Reach out to us today for a free consultation. 

*References:
11 U.S. Code § 362 – Automatic stay