Stuttgart:
615 South Main Street
Stuttgart, AR 72160
(870) 673-8444

Searcy:
2804 East Race Street
Searcy, AR 72143
(501) 368-9800

Little Rock:
University Tower Building
1123 University Avenue
Suite 910
(501) 664-4339

Forrest City:
803 North Washington
Suite B
(870) 630-1234

Pine Bluff:
2313 West 28th Street
(870) 534-1801

Russellville:
112 E. Main Street
(479) 967-8555

Local Calling Numbers:
Batesville: 307-0355
Helena: 338-3000

Chapter 13 Bankruptcy Attorney

As Bankruptcy Attorneys, we know that Chapter 13 is commonly referred to as a "wage earner's reorganization". It allows people, within certain debt limitations, to consolidate and reorganize their debts and protect secured property necessary to running a household or business.

There are three (3) major reasons for filing Chapter 13.

First, you may not have the attorney's fee and filing fee necessary to file a Chapter 7 Bankruptcy. Second, there may be debts you want paid through a plan of reorganization or property you want to keep. Third, you failed the second rung of the “Means Test” indicating that you have “Disposable Income” that should be paid to unsecured creditors which prohibits you from filing a Chapter 7 Bankruptcy.

Usually the major question when filing for Chapter 13 Bankruptcy is: how much will my monthly payment be?

There are eight factors that determine your minimum payment in a Chapter 13 Bankruptcy. They are as follows:

Your Means Test results show you have “disposable income” to pay towards unsecured creditors. Additionally, if your income is above “median” it may affect your plan length also.
What your Plan Length is. The length of your plan of repayment can be a minimum of 36 months (3 years), unless the Means Test says otherwise, and a maximum of 60 months (5 years).
What Secured Property you want to keep and pay for. In the case of secured property there are two major options:

Surrender the property back to the creditor and not pay anything;
Keep & Pay for the property, and if it was purchased recently (910 days, i.e. 2 ½ years, for vehicles and 365 days, i.e. 1 year, for household goods) pay the balance due plus interest, or if purchased not too recently, pay the balance due or the "retail" value of the property, whichever is less, plus interest, through your plan. With a home payment, there are three options: first, provided the payments are current, continue to pay it directly yourself; second, make the regular monthly payment through the plan, and if behind on the payment, catch up the payments within the plan, so when the Bankruptcy is over, you will be current and pick up and pay the normal monthly payment; and third, pay the balance in full within the plan.

What Leased Property you want to keep and pay for. More often than not, lease-purchases are not financially wise transactions. If you have leased property, you have three (3) options:

Reject the lease and let the creditor have the property back and pay them nothing;
Accept the lease contract as written, and continue to pay them directly, not through the plan, if your payments are current; and
Accept the lease contract as written, and pay it through the plan, and if you are behind on payments, catch those payments up through the plan.

What Priority Debt, such as taxes and child support, you have. All priority debt, except child support, must be paid in full within the life of the plan. We recommend full payment of back child support within your plan; however, if it is not feasible, you can pay whatever the divorce Court has told you to pay, usually 10% above your current support obligation; however, you will owe whatever back child support has not been paid when you get out of Bankruptcy. Any current support obligation payments must be paid directly by you.
What, if any, Non-Dischargeable Debt (usually student loans) you intend to repay. Remember, any amount not paid will be due and owing after you get out of Bankruptcy plus interest and any collection fees charged. You have two options:

Ignore the student loan and pay nothing through the plan; and
Pay your normal monthly payment and catch up what you are behind.

What, if any, Consumer, Co-Signed or Joint Debts, owed with non-filing debtors, you intend to repay. You have two options:

Pay nothing towards the obligation and let the responsibility fall on the co-debtor or person jointly obligated.
If you wish to protect the non-filing co-debtor, you must pay the debt, in full within the plan, plus interest.

What, if any, Non-Exempt Property you must pay the value of. If you have property that cannot be exempted, which is unusual, you will pay the value of the property to the Trustee, through your Plan of Repayment. If you file a Chapter 7, this property would be taken and sold by the Chapter 7 Trustee to pay towards your debts.

A Chapter 13 Bankruptcy is flexible. During the course of a case, in some situations, you can make your payment go down by surrendering collateral back to the secured creditor. If you have less than a five year plan you may also be able to extend your plan length to reduce your monthly payment amount. Additionally, if for some reason you incur other bills, usually medical, they can, in some instances, be added to your Bankruptcy and be discharged.

If you would like to discuss your bankruptcy claim and options in greater detail, contact the experienced Arkansas Bankruptcy Lawyers at Niblock & Bueker today.