Manhattan Chapter 13 Bankruptcy Lawyer
Secure Your Financial Future with Manhattan's Bankruptcy Experts
If you are struggling to pay back your creditors and do not expect things to change, filing for Chapter 13 bankruptcy may be a good option for you. Some people prefer to file this type of bankruptcy because it allows you to keep more assets than a Chapter 7 bankruptcy. However, there are some minimum requirements that must be met.
Law Office of Julio E. Portilla, P.C. is here to help you get relief from your debts in the manner that is right for your specific situation. We offer a free initial consultation with our Manhattan Chapter 13 bankruptcy attorney so that we can better understand your circumstances and give you personalized advice about the right path forward.
Seeking debt relief in Queens and Brooklyn? Contact us at (917) 909-6166 or fill out our online form for a no-cost consultation.
What Is Chapter 13 Bankruptcy?
Chapter 13, also referred to as a reorganization bankruptcy or a “wage earner plan,” involves the reorganization of a debtor’s financial affairs. The goal is to create a payment plan for the benefit of the creditors while protecting the debtor from foreclosure, garnishment, levy, or similar consequences. The plan period will vary from three to five years, depending upon whether your income is generally above or below the median income.
What Qualifies You for Chapter 13 in NY?
In order to qualify for Chapter 13 bankruptcy, the debtor must have an income that exceeds the debtor's reasonable living expenses, as the debtor must have sufficient means to provide repayment to creditors of past debts. In some cases, repayment may be for the full amount of the debt, while in others the debtor may pay off only a small percentage of certain debts – perhaps as little as 10%.
Key eligibility factors include:
- Provable Income: You must have a regular source of income that enables you to make monthly payments towards your debt repayment plan.
- Debt Thresholds: Your unsecured debts should be less than $419,275, and your secured debts should be less than $1,257,850.
- Reside, have a domicile, a place of business, or property in the U.S., or a municipality
- Pre-filing Credit Counseling: Before filing, you must complete a credit counseling course from an approved agency.
The Chapter 13 bankruptcy tends to be favored by debtors who have fallen behind on secured loan payments, such as mortgages and car loans, as it enables the debtor to keep possession of the property while catching up on payments through a court-approved repayment plan. It may also be preferred by a debtor who has the valuable non-exempt property that would be liquidated in the course of Chapter 7.
Step-by-Step Guide to Filing Chapter 13 in NY
Filing for Chapter 13 bankruptcy in New York involves several key steps.
Essential steps include:
- Legal Consultation: Engage with a knowledgeable attorney to navigate the process, manage paperwork, and offer legal counsel.
- Documentation Preparation: Collect financial details and complete the necessary forms for Chapter 13 bankruptcy filing.
- Submission of Paperwork: Your attorney will ensure all documents are accurately completed and filed within deadlines.
- Repayment Plan Development: Propose a feasible plan to repay a portion of your debts over three to five years.
- Bankruptcy Eligibility Confirmation: Verify that you meet all the requirements for a Chapter 13 bankruptcy filing in New York.
- Bankruptcy Course Completion: You may need to complete an educational course to confirm bankruptcy is the right choice for you.
Bankruptcy laws can be intricate and vary by individual situations, making professional legal guidance essential.
Informative Bankruptcy Resources and Articles
- Navigating Car Purchases During Bankruptcy
- Mortgage Opportunities Post-Bankruptcy
- Recovery and Credit Rebuilding After Bankruptcy
Learn more about managing living expenses during Chapter 13.
Ready to tackle your debt? Connect with a Chapter 13 attorney at Law Office of Julio E. Portilla, P.C.. Dial (917) 909-6166 or reach out through our online form for expert guidance.
What Is Considered Reasonable/Allowable Living Expenses?
Allowable living expenses under Chapter 7 and Chapter 13 refer to a person's most basic expenses, such as their rent/mortgage, utilities, and day-to-day expenses. These expenses can be deducted from your regular income when helping you determine whether you qualify for the Means Test, or when structuring your Chapter 13 payment plans.
Reasonable living expenses can be quite extensive, and may include:
- Mortgage or rent, including home repair/maintenance costs
- Utilities, water, trash, and sewer
- Cable, cell phone, and internet
- Medical, Dental, Auto, and Life insurance
- Transportation/vehicle costs
- Alimony, child support, and child-related expenses
- Personal care, such as grooming, clothing, laundry
- Employment expenses
- Taxes that are not dischargeable in bankruptcy
- Student loans and educational expenses
Can I Keep My Car or Home?
This form of bankruptcy may allow individuals to keep a home or car even if they have become seriously delinquent on the loans. At the end of a successful bankruptcy, most debts are extinguished through a discharge of debts.
Because you are allowed to keep all of your property, the courts create a new plan that allows you to pay your obligations without incurring interest. During the proceedings, a written plan is drafted that details the repayments and their duration. Usually, repayment begins within 30 to 45 days after the initial filings, and monthly payments are made to the court-appointed trustee. The trustee then disburses the money according to the plan.
How Bankruptcy Can Stop Foreclosure
When you file for Chapter 13, the court issues an automatic stay that prevents creditors, including mortgage lenders, from continuing collection actions. This means that foreclosure proceedings must stop, giving you the opportunity to catch up on missed mortgage payments through a structured repayment plan. Over a three-to-five-year period, you can gradually pay off arrears while maintaining your home. This makes Chapter 13 a viable solution for homeowners who have fallen behind on payments but still have the income to recover financially.
How Are Chapter 13 Payment Plans Calculated?
All Chapter 13 filings must include a monthly payment plan that shows how you will repay your debts over time.
Your Chapter 13 monthly payments are determined using a variety of factors, including:
- Disposable income: This is determined by taking your total income and subtracting your necessary expenses. For most people, their disposable income will be their monthly payment.
- Amount of debts: You will need to add up all of your debts, including priority debts, and divide by the number of months in your plan.
- Length of plan: Payment plans typically range from three to five years.
- If your income is less than the state's median income, you will have a three-year plan.
- If your income is higher, your plan will be five years.
- Assets you are keeping: If you choose to keep your home or car, you must have enough income to repay any past-due amount and keep up with current payments.
Your attorney can help you analyze your financial situation and help you come up with a manageable payment plan that allows you to comfortably repay your debts.
Chapter 13 vs Chapter 7 Bankruptcy
Chapter 13 bankruptcy is designed for individuals with a regular income who can commit to a structured repayment plan. Unlike Chapter 7, which involves liquidating non-exempt assets to pay off creditors, Chapter 13 allows debtors to keep their property while making monthly payments over three to five years. It is particularly suitable for those facing foreclosure, repossession, or significant unsecured debt but who have the means to repay over time. Chapter 13 bankruptcy stays on your credit report for seven years, whereas Chapter 7 remains for ten years. While Chapter 7 is a faster process, typically completed within three to six months, Chapter 13 provides a more structured path to financial stability without the loss of assets.
Chapter 13 vs Chapter 11 Bankruptcy
Chapter 13 bankruptcy is tailored for individuals and sole proprietors with regular income. It features a court-approved repayment plan spanning three to five years and offers lower costs and simpler procedures compared to Chapter 11. Chapter 13 is best suited for individuals seeking to protect their home, car, and other assets while managing their debts. In contrast, Chapter 11 bankruptcy is primarily used by businesses and high-net-worth individuals. It allows debtors to reorganize and restructure financial obligations but is more complex, with extended timelines and significant legal and administrative costs. Chapter 11 is ideal for businesses aiming to continue operations while restructuring debt, whereas Chapter 13 provides a more straightforward option for personal debt relief.
Contact Our Chapter 13 Bankruptcy Lawyers
If you're feeling the weight of overwhelming debt and reside in Manhattan, hiring a Chapter 13 bankruptcy lawyer near you can provide you with a clear path toward financial stability. With the assistance of an experienced Manhattan Chapter 13 bankruptcy lawyer at the Law Office of Julio E. Portilla, P.C you'll have access to expert legal advice, personalized repayment plans, and effective guidance throughout the bankruptcy process. By working with an attorney, you'll be able to protect your assets, stop creditor harassment, and begin rebuilding your financial future.
Don't hesitate any longer - take action today by contacting a Chapter 13 bankruptcy lawyer in Manhattan to schedule a consultation and get started on your journey toward financial freedom.
Dial (917) 909-6166 or reach out through our online form for expert guidance from a Chapter 13 lawyer near you.
Related Blog: Tips for Refinancing After a Chapter 13
FAQs About Chapter 13 Bankruptcy in Manhattan
What happens if I miss a Chapter 13 payment?
Missing a payment may result in your case being dismissed. However, courts may allow modifications to the repayment plan under certain circumstances.
Can I discharge any debts in Chapter 13 bankruptcy?
Certain debts, such as credit card balances, medical bills, and personal loans, may be partially or fully discharged after completing the repayment plan.
How does Chapter 13 affect my credit?
Chapter 13 remains on your credit report for seven years, but responsible financial management during and after bankruptcy can help rebuild your credit.
Can I apply for new credit while in Chapter 13?
You may need court approval before taking on new debt during the repayment period. Courts typically allow new credit for necessary expenses, such as medical bills or car loans.
Get the Reliable Representation You Deserve
The Law Office of Julio E. Portilla, P.C.., is dedicated to your bankruptcy case, and you can rest assured that we provide personal and aggressive representation. We also strive to maintain open lines of communication at all times. If you would like more information, please feel free to contact us today.
Call our Manhattan bankruptcy lawyer at (917) 909-6166 to schedule your free consultation.
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