Wage-earners are excellent candidates for Chapter 13 bankruptcy arrangements. Those with income higher than the state’s median often work with the five-year repayment plan. The three-year repayment plan is common for people with a monthly income less than the state’s median.
The plan depends on several factors, such as your household income, total debt, and deductions like taxes and living expenses. It is somehow complicated, but with the guidance of Oklahoma City bankruptcy attorneys, you can easily hack it. They will break the process down for you and guide you every step of the way.
Which Documents Should I Submit Before Building a Repayment Plan?
The documents required to file Chapter 13 bankruptcy vary from one case to another. Once you apply, you could get a list of all the paperwork the court needs. But generally, here is what you might need to file:
- Schedules of liabilities and assets
- Schedule of current expenditures and income
- A program of valid leases and executory contracts
- A statement of financial affairs
- Record of any interest in any state or federal qualified tuition or education accounts
- A report of monthly net income and any anticipated increase in expenses or income after filing
- Evidence of any payment received from employers in the last 60 days before filing
- Certificate of credit counseling
- Copy of any repayment plan developed during credit counseling
- Copy of tax returns or transcripts
How Do I Build a Chapter 13 Bankruptcy Repayment Plan in Oklahoma?
After filing Chapter 13 bankruptcy, you will be assigned a trustee who will be in charge of your repayment plan. They must be satisfied that your income is sufficient to make the proposed payments. Some creditors might receive a significantly reduced debt, while others could get 100%.
While creditors might oppose the repayment plan, the final decision lies with the court. Remember that the payments should be made for anything between three and five years. In most cases, you should make the repayment directly to the trustee, later distributing it to your creditors.
How Do I Draft a Good Repayment Plan?
A reasonable repayment plan is readily accepted in court and is workable in the long run. It can also come with several other benefits, such as:
- Protecting the co-signers of your property
- Retaining your property while you pay off the debts
- Avoiding wage garnishment
- Stopping repossessions or foreclosure
- Blocking collection attempts by creditors
Remember that you will need to pay your creditors from your disposable income. Therefore, a proper evaluation of your finances and financial responsibilities is critical in building a workable plan. A chapter 13 bankruptcy attorney in OKC and surrounding areas can use their experience and guide you well.
Is There a Grace Period Before Beginning Chapter 13 Payments?
Once you present your Chapter 13 plan, you better prepare to make repayments soon afterward. Unfortunately, you might have no grace period. You might be expected to begin making payments 30 days from the day of filing. And the payments could be mandatory whether the court has approved the plan or not.
The payments are often made through the bankruptcy trustee. But if you have secured debts like cars or homes, you might have to make the payments directly to the lender. After that, you could deduct the money paid directly from what you could have paid the trustee. A Chapter 13 bankruptcy lawyer in Oklahoma City and surrounding areas can guide you properly.
What Happens if I Miss a Chapter 13 Plan Payment?
A chapter 13 repayment plan requires a lot of discipline on your part. Skipping a payment can seriously affect your case. For instance, the court might dismiss your case altogether or change it to Chapter 7 bankruptcy. And you risk losing the non-exempt assets, which might be sold to pay off outstanding debts.
One-time delays or delaying by a few days because of a financial emergency might not automatically result in a bankruptcy conversion or case dismissal. If you explain your situation to the trustee, you might agree to update the payments and avoid adverse consequences.
Can I Reduce an Initial Chapter 13 Payment?
An unexpected hospitalization or job loss are unpredictable events that could make it difficult to make monthly payments. If that happens, you have a way out, for example, filing a motion to request payment reduction. An Oklahoma City chapter 13 bankruptcy lawyer can guide you in such instances.
It is critical to give valid reasons to review the payment plan. And you will also need documented proof to support your claim. If the court finds it sufficient, it might adjust the payments for the remaining period of your plan.
What Will an Attorney Help Me With?
Chapter 13 bankruptcy is generally sophisticated compared to the other bankruptcy options. What’s more, the paperwork involved can overwhelm any ordinary Oklahoma State resident. Not to forget that a small mistake or omission in your filing can result in the case being thrown out. And you can only reapply after several months.
A workable plan often results from working together with the right legal expert. The experience, knowledge, and skills of a bankruptcy lawyer near you are critical in relieving you from debt. The first consultation is free in most instances, and after that, you could agree on the legal fees.
Attorneys Helping You Seek Financial Relief in OKC
A Chapter 13 repayment plan isn’t something you want to navigate alone. The consequences of not getting things right in Oklahoma City are dire. You might be forced to shift to a less favorable form of bankruptcy or be left without any bankruptcy protection. An attorney can hold your hand and ensure that you get financial relief.
People in Oklahoma City and its surrounding areas can benefit from the services of the attorneys at Mitchell & Hammond. We are dedicated to bringing the life and finances of every client back on track. Talk to us today to discuss how to remedy your financial predicaments.