Consider Your Options in a Chapter 13 Bankruptcy

Are you struggling with overwhelming debt in Wheeling, WV? You’re not alone. Many people find themselves in situations where managing multiple debts becomes impossible. If you’ve explored options and are considering bankruptcy, Chapter 13 bankruptcy in Wheeling, WV might be a solution for you.

Quick Summary:

  • Chapter 13 offers a court-ordered repayment plan lasting 3-5 years. It gives you a chance to reorganize finances and become debt-free.
  • The benefits of Chapter 13 include: stopping creditor harassment, protecting your assets (like car & house), potentially reducing some debt, and more.
  • Several drawbacks can happen in Chapter 13, including: requiring long-term commitment, limiting spending, hurting credit score upfront and more.
  • The filing process for Chapter 13 includes: eligibility assessment, credit counseling, document preparation, and more.

What is a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy in Wheeling, WV offers a chance to reorganize your finances and become debt-free.  Imagine hitting pause on all your debts – that’s what happens when you file. The court will create a personalized repayment plan typically lasting 3-5 years.

This plan considers your income, expenses, and total debt amount. You’ll make a monthly payment to a court-appointed trustee. This trustee then distributes the funds to your creditors according to the plan. 

The key here is that you get to keep most of your assets, like your car and home, as long as you maintain your plan.


How Can I Be Eligible for a Chapter 13 Bankruptcy?

Chapter 13 has different eligibility criteria that should be followed. Here is a general list of the eligibility criteria for Chapter 13 bankruptcy in Wheeling, WV:

  • Debt Limits: There are limitations on the amount of debt you can have to qualify for Chapter 13. The total cap for unsecured debts and secured debts is less than $2,750,000. These limits are subject to change every three years based on inflation.
  • Income Requirements: You need to have the income to complete a repayment plan. This means your income should be enough to cover your living expenses. It should also make your monthly plan payments, and secured debts like your mortgage or car loan.
  • Tax Filings:  Show the court you’ve filed your federal and state income tax returns for the past four years.
  • Credit Counseling Course:  Completing a credit counseling course approved by the U.S. Department of Justice is mandatory within 180 days before filing for Chapter 13.
  • Previous Bankruptcy Filings: There are limitations on how recently you can file. This matters if you’ve had a previous bankruptcy case dismissed.

What are the Pros of Chapter 13 Bankruptcy?

Chapter 13 bankruptcy offers several advantages for individuals struggling with overwhelming debt. Here’s a closer look at some of the key benefits:

Structured Debt Management

Chapter 13 provides a structured approach to managing your debt. You’ll work with a court-approved plan, ensuring all your debts have a clear timeline for repayment. This structure can bring much-needed order and control to your financial situation.

Stop Creditor Harassment

One of the immediate benefits is a halt to creditor harassment. Once you file, an automatic stay goes into effect. This prohibits creditors from contacting you directly for collection efforts. This provides some much-needed breathing room to focus on your repayment plan.

Asset Protection

Unlike Chapter 7 bankruptcy, Chapter 13 allows you to keep most of your assets, such as your car and home. This is contingent on staying current on your plan payments and meeting other court requirements. This is a significant advantage, allowing you to maintain some financial security.

Debt Reduction Potential

While you’ll still repay a portion of your debts, Chapter 13 offers the possibility of debt reduction.  In some cases, your attorney may be able to negotiate with creditors to lower the total amount of debt.

Credit Repair Opportunity

Bankruptcy will appear on your credit report for a period of 7-10 years. However, successfully completing a Chapter 13 plan demonstrates your commitment to financial responsibility. This can help rebuild your credit score, allowing you to access loans and forms of credit in the future.

Long-Term Financial Stability

Completing a Chapter 13 plan allows you to get a clean slate from discharged debts. This provides a fresh start and opportunity to build a more stable financial future.

What are the Cons of Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, while helpful in many situations, does come with some drawbacks to consider. Here’s a breakdown of some potential downsides:

Long-Term Commitment

Chapter 13 requires a significant time commitment. The repayment plan typically lasts 3-5 years, demanding strict adherence to your budget and monthly payments. This can feel restrictive for some individuals.

Financial Impact

During the repayment plan, most of your disposable income will be directed towards your plan payments. This can limit your ability to spend freely or save for other goals.

Credit Score Impact

Filing for bankruptcy will negatively impact your credit score. This typically causes a significant drop. This can make it difficult to qualify for loans, credit cards, or even renting an apartment in the short term. However, successfully completing the Chapter 13 plan demonstrates financial responsibility, which can help rebuild your credit score over time.

Cost and Legal Fees

There are associated costs with filing for Chapter 13 bankruptcy, including court fees and attorney fees. It’s important to factor these costs into your decision-making process.

Not All Debts Eliminated

Chapter 13 doesn’t eliminate all types of debt. Certain debts like child support, student loans (in most cases), and some tax debts may not be forgiven and will need to be repaid in full.

Plan Failure Risk

There’s always a risk that unforeseen circumstances might impact your ability to make your plan payments. If you miss payments or fail to meet your obligations under the plan, your case could be dismissed. This potentially leads to foreclosure or repossession of assets.

It’s important to weigh the pros and cons before deciding if Chapter 13 bankruptcy is the right solution for you.

What is the Filing Process for Chapter 13 Bankruptcy?

While Chapter 13 bankruptcy offers a path towards financial relief, the filing process can seem difficult.  Understanding the steps involved can help alleviate some of that stress. Here’s a breakdown of the typical filing process for Chapter 13 bankruptcy:

  1. Consultation and Eligibility Assessment: Your financial situation, debt levels, and income must be assessed first. This is to determine if Chapter 13 is the most suitable option for you.
  2. Credit Counseling Course: Before filing, you’ll need to complete a credit counseling course. This course provides financial education and budgeting guidance.
  3. Preparation of Petition and Documents: Gather and prepare all the necessary documents for filing your Chapter 13 petition. These documents include financial statements, income tax returns, proof of income, and a proposed repayment plan.
  4. Filing the Petition: Once all the paperwork is complete, you will file your Chapter 13 petition with the bankruptcy court. Upon filing, an automatic stay goes into effect, halting creditor collection efforts.
  5. Meeting of Creditors: Within a few weeks of filing, you’ll attend a meeting of creditors presided over by a trustee. This meeting allows creditors to ask questions about your financial situation and proposed plan.
  6. Plan Confirmation Hearing: The court will hold a hearing to confirm your proposed repayment plan. You will present the plan and address any objections from creditors or the trustee.
  7. Plan Payments: If your plan is confirmed, you’ll start making monthly payments to the court-appointed trustee. They will distribute the funds to your creditors according to the approved plan.
  8. Plan Completion and Debt Discharge: Once you successfully complete your Chapter 13 repayment plan (typically 3-5 years), any remaining eligible debts are discharged, meaning you’re no longer legally obligated to repay them.

Work With Our Trusted Chapter 13 Bankruptcy Attorney Today! 

If you’re considering Chapter 13 bankruptcy in Wheeling, WV, contact Thomas E. McIntire & Associates, L.C. Our experienced Chapter 13 attorney understands the financial challenges you face and can guide you every step of the way.

We’ll work with you to explore your options, develop a realistic plan, and ensure you receive fair treatment throughout the process.  Schedule a free debt analysis today to discuss your financial situation. We’ll see if Chapter 13 bankruptcy can help you achieve financial stability.

Remember, you’re not alone in this. Thomas E. McIntire & Associates, L.C. is here to help you navigate Chapter 13 bankruptcy in Wheeling, WV and find a path towards a brighter financial future.