Bankruptcy may be a smart solution for addressing debt, but you will need to review many different factors and goals before making a decision. When you are already struggling with debt, one of the first questions you will have is how much does it cost to file Chapter 13 bankruptcy in Arizona. Fortunately, in many cases, the amount you pay for a Chapter 13 bankruptcy and debt reorganization plan, will be well worth your investment.
You are in a better position to leverage the benefits of bankruptcy when you have an Arizona Chapter 13 lawyer who will help you make informed decisions about your future. It is also helpful to review some basics about costs in bankruptcy.
Chapter 13 Bankruptcy Filing Fees
All civil, non-criminal cases in Arizona courts require payment of a filing fee. It takes funds to run the judicial system, including the US Bankruptcy Court for the District of Arizona. The plaintiff or person initiating the case must pay the required fee, and you should expect to pay $313 to file for a basic Chapter 13 bankruptcy.
Beyond the filing fees, you might encounter additional costs as you work through Chapter 13 bankruptcy. You will need multiple copies of your petition and schedules to forward to creditors. You may also need to request modifications and file motions, These activities and tasks may increase the costs you pay.
Chapter 13 Bankruptcy Laws
Through the Chapter 13 process, you can discharge qualifying debts and emerge debt-free. The result is similar to a Chapter 7 case in this way, but the process is very different. Instead of paying creditors back through liquidation and selling assets, you agree to satisfy your debts to creditors in Chapter 13.
The Chapter 13 process will reorganize your debts, typically reducing them significantly. These amounts become the basis for your debt repayment plan that you pay to creditors. The amount will be one you can afford, so you do not fall behind. The debt repayment plan will be in effect for 3 to 5 years, at which point your case concludes. All remaining balances are cleared and your qualifying debts are discharged.
The debt repayment plan is based on your income, so being gainfully employed is a key eligibility factor for this type of bankruptcy. Plus, there are additional qualifications based on prior cases. You must wait 4 years before filing for Chapter 13 if you previously filed for Chapter 7, and you cannot file another Chapter 13 for 2 years.
Other Questions About Chapter 13 Bankruptcy
Besides wondering about how much it cost to file for Chapter 13 bankruptcy, you probably have additional questions about bankruptcy. Some of the most commonly asked are:
What kinds of debt can I eliminate through bankruptcy? With Chapter 13, you can wipe out debt for credit cards, personal loans, medical costs, and lines of credit. However, you cannot eliminate alimony, child support, and other debts designated by law.
Will I lose my home or assets through Chapter 13? There is no liquidation of assets in Chapter 13 like there would be in Chapter 7. You are satisfying your debt through reorganization and repayment, so the trustee does not have the power to sell your property.
Can I roll my mortgage into a Chapter 13 debt repayment plan? You can include arrearages related to your mortgage into your plan, including interest, late fees, and the lender’s legal costs. It is not possible to discharge your mortgage amount in Chapter 13.
Benefits of Chapter 13
One of the most impactful advantages of filing bankruptcy is that the court imposes an automatic stay on creditor efforts to collect debt. The court prohibits creditors from contacting you, and they are barred from:
- Threatening or filing a collection lawsuit;
- Garnishing your wages;
- Repossessing your vehicle; and,
- Foreclosing on your home.
However, you should note a key exception to the automatic stay in a Chapter 13 case. The lender can request that the bankruptcy court lift the automatic stay so that the bank can move forward with foreclosing on your home.
In addition, going through bankruptcy is a way out of the debt that holds you back and increases stress. You might be concerned about the amount of time a Chapter 13 case may remain on your credit report, which is 7 years. Still, consider what would happen if you did not file. You could be submitting minimum payments for decades without making any progress in reducing the underlying debt, well beyond the mark of bankruptcy on your credit.
Trust an Arizona Chapter 13 Bankruptcy Attorney to Advise You
For more information on how DebtBusters serves your needs for a Chapter 13 case, please call (866) 223-4395 or visit our website to set up a free consultation. A knowledgeable bankruptcy lawyer will meet with you at our offices in Scottsdale, AZ.
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