Steps And Length Of Chapter 13 Process

Do I Automatically Qualify For A Chapter 13 Bankruptcy In Texas?

In this article, you will discover:

  • Who qualifies for Chapter 13 bankruptcy
  • Dischargeable debt under Chapter 13
  • Debt not dischargeable under Chapter 13
  • Tax debt under Chapter 13
  • Assets that can be kept under Chapter 13
  • Steps and length of Chapter 13 process

Typically, most people would qualify for a Chapter 13 bankruptcy in Texas. There are instances when someone has too much debt to file a Chapter 13. To qualify for Chapter 13, you must have less than $1.2 million in secured debt and less than about $420,000 in unsecured debt.

What Type Of Debts Will Be Discharged In A Chapter 13 Bankruptcy?

Similar to Chapter 7, unsecured debt of credit cards, signature loans, and medical bills are discharged in Chapter 13 bankruptcies. Some income taxes can also be discharged. Debtors, again, cannot discharge educational loans, whether public or private.

What Type Of Debt Will Not Be Forgiven In A Chapter 13 Bankruptcy?

Income tax that is not older than three years will not be discharged in a Chapter 13 bankruptcy. It becomes a priority claim, and the debtor has to pay the tax debt during the course of their plan. Additionally, educational loans cannot be discharged.

Under What Circumstances Could Tax Debt Be Discharged In A Chapter 13 Bankruptcy Case In Texas?

If it is old enough, the tax return that it is associated with was timely filed and the Internal Revenue Service has not filed a federal tax lien, then the debtor can discharge back tax liability.

What Assets Can I Keep In A Chapter 13 Bankruptcy?

In a Chapter 13 bankruptcy, a debtor will not surrender any property. They are what we call a debtor in possession. If an asset that they are keeping is not exempt, then they are obligated to pay their unsecured creditors an amount that would equal the value of that non-exempt asset.

Walk Me Through The Process Of Filing A Chapter 13 Bankruptcy?

It is similar to the Chapter 7 bankruptcy, with some distinctions. When the Chapter 13 case is filed, there will be a creditor’s meeting set, just as is done in a Chapter 7 filing. Once the creditor’s meeting is held, a Chapter 13 trustee is assigned and involved in the process from beginning to the end. We work with the Chapter 13 trustee to resolve any objections to the court signing a confirmation order that confirms the debtor’s Chapter 13 plan of reorganization. Once all issues are worked out, the bankruptcy court will enter a confirmation order that approves the Chapter 13 payment plan.

That plan spells out how the debtor’s secured creditors will be treated according to the plan. It also provides an amount that will ultimately go to the unsecured creditors, according to disposable income available. Once the plan is confirmed, the debtor is obliged to abide by the terms of their plan, staying current with monthly payments to the trustee. Clients are usually in Chapter 13 for 36-60 months, while we continue to shepherd them through the process.

How Long Does A Chapter 13 Bankruptcy Take?

A Chapter 13 bankruptcy can take anywhere from 36 months to 60 months.

For more information on Chapter 13 Bankruptcy In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (888) 402-5557 today.

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