Paying Down Your Debts Is Actually a Good Idea
When you are filing bankruptcy, surely you are worried about the fact that you might lose all your assets to the liquidation. While chapter 7 bankruptcy makes you let go of your assets, chapter 13 bankruptcy allows you to keep your personal assets as long as you have the means and resources to pay off the debt for the next 3-5 years according to the repayment plan given to you by the court. Our Pittsburgh bankruptcy lawyer suggests you to paying off your debts even when there is a chance that you might lose your assets.Giving the Court the Proof of Your Income
You can get protection for your assets while filing bankruptcy by giving the court proof of your income. They would want to see if you have enough disposable income to pay off your debts every month once they come up with the repayment plan. You can show any income you have and the court will consider it to be your disposable income. This can include:
- Your working income
- Social security payments
- Alimony or spousal support
- Worker’s compensation
This proof will convince the court that you have the necessary resources to pay your creditors
Now, comes the most crucial part of this type of bankruptcy. You need to wait for getting the repayment plan from the court. Now, practically, every bankruptcy is unique and different from each other and there is no specific format of the repayment plan. However, over the years, courts have developed certain benchmarks while chalking out the bankruptcy plan. For example, the court will allow you to make the payment for the secured debts first instead of the unsecured ones. Hence, most of your disposable income will go for the home mortgage pr car loan, or student loan first instead of the unsecured debts like credit card bills or medical bills. Our Pittsburgh bankruptcy lawyer will ensure that you get to arrange the documents properly while presenting them at the court as your proof of income.How Much Debt Do You Have?
Your total debt will be a dominating factor to allow you such kind of bankruptcy protection. The main aim of the court is to use your disposable income and ensure that it can pay the creditors substantially by the repayment plan. Your secured debt must not exceed $1,149,525 to be eligible for this restructuring. At the same time, your unsecured debt should be less than $383,175.
If your debts are too high, then the court will automatically hold you eligible for chapter 7 bankruptcy and liquidate your unprotected assets to pay the creditors. Our Pittsburgh bankruptcy lawyer can help you in maximizing the allowance of your assets to retain as much value as possible.File Income Tax Returns
For the court to listen to your hearing, you must file all your state and federal income tax returns and pay outstanding balances. You also need to present the documents of the income tax filing of your previous four years from the date of the bankruptcy filing. Otherwise, your case will be dismissed and you will be on your own to deal with creditors.
Come to Pittsburgh Bankruptcy Law Group to discuss your case further.