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Chapter 13 bankruptcy is commonly known as the “Wage Earner’s Plan” and for good reason. Unlike Chapter 7, in which most or all debt is discharged, Chapter 13 assists to reorganize and manage debt under the auspices of attorneys in Albuquerque and the court so that the debtor may pay back some or all of the debt owed while retaining most assets. Sweeping reforms to the US Bankruptcy Code in 2005 stiffened the requirements to file bankruptcy as filings and suspected abuse increased. As the result, debtors must now meet several requirements and pass close scrutiny before they are permitted to file. Albuquerque lawyers must shoulder more of the burden of accuracy in the filing. And, unlike before, the new reforms now decide which type of filing best assists both debtor and creditors, not solely filers and lawyers in Albuquerque.

Highlights of Chapter 13 are:
· Secured debts cannot exceed $922,975
· Unsecured debts cannot exceed $307,675
· Income must be sufficient to repay debts as structured by the court.
· Debtors must complete credit counseling and provide certificate to court along with filing package.
· Filers must submit previous year’s tax return and proof taxes were paid to court.
· Filing fee is $274.00
· Chapter 13 payments must commence within 30 days after case is submitted to court.
· Payments must be made to trustee or deducted from payroll check if income is regular.
· If average monthly income over the last six months is greater than the state median income, a five year plan is proposed.
· If average monthly income over the last six months is lower than the state median income, then a three year plan is proposed.
· If unavoidable conditions prevent timely payments, then the court may adjust your plan. In the case of extreme hardship, for instance the closing of the only production plant in a small town, the court may completely discharge your debts.
· If the court will not modify your plan nor dismiss your debts, then you may convert to a Chapter 7 plan, or absolute bankruptcy, to discharge all your debts.
· Chapter 13 ends when the payment plan is completed. All debts eligible for discharge will be discharged. Proof must be presented of successful completion of financial management training (not to be confused with the training required before the case is filed), and you are current on all child support and alimony payments.

Filed under: Foreclosure Properties

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