There are a number of different ways to declare bankruptcy but the two most common are Chapters 7 and 13. Whereas Chapter 7 bankruptcy involves complete liquidation of assets, Chapter 13 does not and the debtor is allowed to keep his or her property as long as the plan that is developed complies with the prevailing laws. A Chapter 13 bankruptcy attorney in Royal Palm Beach is necessary and the costs may be higher than Chapter 7 because the process is considerably more complicated but for those with significant assets, the cost is well worth it.
The time frame: When one declares Chapter 7 bankruptcy the whole affair is over very quickly, in most cases only a few months. This is not the case with Chapter 13; this process can last as long as 5 years but the court prefers to see it wrapped up in less time, perhaps three years. This drawn out time frame is due to the fact that regular monthly payments will be made to a trustee who in turn repays the creditors in accordance with the agreed upon plan and schedule. The length of time to complete the process has a lot to do with the debtor’s income.
The payment plan: The fact that a Chapter 13 bankruptcy attorney in Royal Palm Beach works with the debtor to create a repayment plan is the key to its success. The objective is to reorganize the debt by paying certain creditors over an agreed upon time frame. The debtor is subjected to a means test, the results of which will indicate the amount of disposable income available for debt repayment. Depending on the outcome of the means test there may very well be no allocation of money to unsecured creditors including credit card companies and all medical bills. Chapter 13 reorganization though must include payments which are considered to be priority items such as child support, tax debt, etc.
The payment plan usually includes payments to unsecured creditors equal to that amount they would have expected had the individual filed for Chapter 7 bankruptcy.
Once the plan has been developed and agreed the debtor is obliged to pay the agreed upon amount every month to a court appointed trustee who takes care of making the payments.
If you have gotten yourself into debt and you have significant assets that you would like to protect then you should consider hiring a Chapter 13 bankruptcy attorney in Royal Palm Beach. You are invited to contact the law offices of Sean I. Koplow.
