In Alabama, chapter 13 provides a plan for paying off the consumer’s debts over a few years. The plans are restructured to make it easier for the consumer to pay off the debts without late fees and penalties. A chapter 13 bankruptcy attorney in Tallassee, AL helps people create a better plan for settling their debts.
Establish Eligibility for the Case
The claimant provides income statements for the last six months to their attorney. The lawyer calculates the claimant’s annual income and determines if it is higher than the median for the claimant’s household size. Any income below the median disqualifies the claimant for chapter 13 bankruptcy.
Create a Repayment Plan
The requirements for chapter 13 bankruptcy is a new repayment plan that expands three to five years. The person determines what debts they want to include in the plan. The attorney calculates the monthly payments and determines how to settle the debts within the term of the bankruptcy case. The payment must be affordable and shouldn’t present the probability of early discharge of the claim. The court reviews and approves the plan. Creditors have a chance to refuse inclusion in the plan.
Disposable Income Requirements
All disposable income is used to pay off any debts that were not included in the case. The court calculates the disposable income by deducting the consumer’s monthly expenses and the bankruptcy payments from their net monthly income.
Credit Line Restrictions
Consumers aren’t allowed to start any new lines of credit while they are in bankruptcy. The court monitors them and enforces the terms of the bankruptcy. Any violation of the terms leads to early discharge. If an early discharge happens, the person will become immediately responsible for all debts, and creditors can take legal action.
In Alabama, chapter 13, bankruptcy is an effective plan for paying off debts efficiently and without major drawbacks. The bankruptcy provides an automatic stay throughout the entire term of the case. It also helps consumers keep their home if they are facing foreclosure. People who need more info about bankruptcy can contact a chapter 13 bankruptcy attorney in Tallassee, AL at Courtney & Mann LLP right now.
