Understanding Your Bankruptcy Options
At Nicaud & Sunseri Law Firm, LLC, we help clients on the Northshore and Southshore obtain debt relief through personal bankruptcy. If you need help determining whether to file for bankruptcy, or if you want to know more about the protections offered by bankruptcy, our attorneys can help. We handle Chapter 7 and Chapter 13 bankruptcy, as well as business reorganization through Chapter 11.
Here are some important things to consider if your debt situation is unmanageable:
What Benefits Does Chapter 13 Offer?
Chapter 13 bankruptcy is a way to help you get control of your financial situation. With Chapter 13, you can make a fresh financial start after 3 to 7 years of manageable debt repayment, and you may also be able to retain your property. Contact Nicaud and Sunseri Law Firm, LLC, to find out more about the protections and benefits offered by Chapter 13.
How Does Chapter 13 Bankruptcy Work?
Chapter 13 bankruptcy is known as “reorganization bankruptcy” because it allows you to reorganize your debt into a manageable repayment plan. This plan usually lasts 3 to 7 years. Depending on the circumstances, some of your debt may be eliminated once you have completed the payment plan.
Chapter 13 Benefits Vs. Chapter 7 Benefits
Chapter 7 bankruptcy is very different from Chapter 13. Chapter 7 is known as “liquidation bankruptcy.” With Chapter 7, you may be required to sell (or liquidate) your non-exempted property to repay your debts. In contrast, when you file for Chapter 13, you can keep most of your property.
Additionally, because Chapter 13 allows you to continue meeting payment obligations, it may help you avoid the perceived stigma of non-payment.
Can Chapter 13 Help Me Avoid Foreclosure?
A major benefit of Chapter 13 is that it can help you avoid foreclosure. An automatic stay immediately stops foreclosure proceedings once you file for Chapter 13. You can then start catching up on missed mortgage payments, as those missed payments can be included in your total debt amount. You can also renegotiate the terms of your mortgage.
Note: Chapter 7 works differently with regard to mortgages. With Chapter 7, if you are unable to make monthly payments, you may lose your home. Your debt repayment for Chapter 7 will be based on your monthly budget and disposable income.
What About Property Repossession?
Chapter 13 generally allows you to keep personal property, including cars and your home. Your debts will be consolidated into a repayment plan lasting 3 to 7 years.
With Chapter 7 bankruptcy, you may be required to sell (liquidate) your non-exempted property to repay debts. With Chapter 7, you may not be allowed to catch up on late payments for your home or vehicle.
How Long Will Bankruptcy Show Up On My Credit Report?
Chapter 13 will show up on your credit report for 7 years, and Chapter 7 shows up on your credit report for 10 years. With Chapter 13, you get 3 more years to rebuild your credit.
Do I Have To Pass A Means Test To Qualify For Bankruptcy?
To qualify for Chapter 7 bankruptcy, you must pass a Means Test that verifies that you do not earn too much money to receive bankruptcy protection.
However, with Chapter 13, you do not have to pass a Means Test. That means you will likely qualify for Chapter 13 protection, even if you do no qualify for Chapter 7. In other words, with Chapter 13, there are no limits on your income, but there are limits on the amount of debt that Chapter 13 can address.
Can Chapter 13 Help Address Non-Dischargeable Debt?
Debt comes in many forms, including alimony, child support and taxes. While these kinds of debt are not dischargeable through bankruptcy, they can be included in a payment plan through Chapter 13. Again, Chapter 13 gives you 3 to 7 years to pay these debts in full.
I Have Co-Signers. Will Creditors Come After Them If I File For Chapter 13?
Because Chapter 13 allows you to reorganize your debt and retain responsibility for it, the debt isn’t simply passed on to your co-signers. That means creditors will not try to collect from your co-signers when you file for Chapter 13.
It’s different if you discharge debt through Chapter 7. The creditor may still try to collect from your co-signer.
I’m Being Harassed By Creditors. Will Bankruptcy Put A Stop To It?
If you have heavy debt, you have probably experienced creditor harassment. The phone calls and letters can cause extreme stress that may affect every aspect of your life. The good news is that bankruptcy offers protections against creditor harassment.
Specifically, if you file for Chapter 13, you no longer have to deal with creditors directly. They will be paid through the Chapter 13 payment plan, and the bankruptcy trustee assigned to your case will manage those payments.
Learn More | Contact A Louisiana Bankruptcy Lawyer Today
Chapter 13 bankruptcy may be the plan you need to make a fresh financial start. To learn more, contact Attorney Doug Sunseri at 504-662-9596 (Metairie) or Attorney Michelle Sunseri at 985-218-0494 (Mandeville) of Nicaud & Sunseri Law Firm, LLC. We advise and represent clients throughout the Northshore and Southshore.