6 Steps to Prepare for Filing Bankruptcy Chapter 13
The bankruptcy process can be daunting. You are anyway dealing with a complex financial situation that is forcing you to go for this option. So, obviously, you are already pretty concerned. In a situation like this, you need to prepare for the filing, and doing it on your own can lead to unwanted mistakes. And that is why you need to hire a Pittsburgh bankruptcy lawyer. You just have to produce the documents like income tax returns or some other things along with financial stubs. The lawyer and the law firm will take care of the rest.Producing a Poof of Income
Generally, when you are filing for bankruptcy, the most crucial documents you will need to show the lawyer are the last two pay stubs and the last two year’s tax returns. If the debtor is self-employed, then they have to produce some other documents which will include details of income and expenses, business assets, and inventory.
It is also advised that when you are consulting a Pittsburgh bankruptcy lawyer, you must disclose all your financial information to them so that they can keep the paperwork neat and there is no chance of mistakes left anymore. For example, if you have a recent transaction from your account with a large amount of money, then you must tell the lawyer about it. Otherwise, this might be called a fraudulent conveyance.What is Fraudulent Conveyance?
The term fraudulent conveyance can sound a bit misleading. But the meaning of this is if the debtor is transferring a huge amount of money within four years of filing bankruptcy, then when they are insolvent, this fund can be considered to be a part of their asset that will be a determining factor for qualifying for bankruptcy. So, it is necessary that you discuss this with the lawyer you are hiring.
However, if you have not foreseen the bankruptcy in four years of time at the time when the fund transferred happened, then you need to talk to the lawyer about it. They will be able to guide you in filing for Chapter 13 bankruptcy will be wise or you should go for some other type of financial arrangements.Paying Back Creditors Over Time With Chapter 13 Bankruptcy
When you file for bankruptcy, your creditors will be in a dire situation. Chapter 13 will allow your creditors to only get the reduced monthly payment minus the interest. Also, the payment will happen over a span of 60 months. The creditors are generally left with no other option but to accept.
Here, you need to keep in mind, that your unique financial situation, bankruptcy might not be the right answer too. For example, your monthly income is very low and yet your equity in the home is quite high and you have lots of unsecured debts. In this case, bankruptcy won’t be an ideal answer for you. It won’t help you accomplish what you want to.Chapter 13 Repayment Plan
Often debtors wonder what if the unsecured debts are so much that it takes more than five years to pay. You need to remember that when you are paying the debts to the trustee, the creditors are only getting a certain percentage of the money you owe them. The payment has been restructured keeping your financial burden less. Hence, that will make sure the creditors get the most in five years time span. After that, the rest of the debt will be wiped off. Hence, filing for chapter 13 bankruptcy means it will partially wipe off the debts.Forestalling Foreclosure, Eviction and Lawsuit Proceedings
Yes, when you are filing for bankruptcy, it will effectively stall all the proceedings like foreclosure, eviction, and civil cases. For Chapter 7, you will get an automatic stay that will stall the foreclosure for 90 days while for chapter 13, it will be for 3-5 years. As a result, with chapter 13, you will get enough time to stabilize your finances and start with the repayment plan for your mortgage. The eviction will be stopped too. Also, even if the creditors have filed a civil lawsuit, it will be ineffective when the bankruptcy has been filed. However, there are some changes since the changes in bankruptcy code 2005. You need to consult a Pittsburgh bankruptcy lawyer to know about it.
Give us a call at Pittsburgh Bankruptcy Law Group and we will extend of knowledge and experience to help you.