The decision to seek bankruptcy relief is a hard one, but one that comes from a place of necessity and strength. In pursuing bankruptcy protection, it is necessary to enter the process with open eyes and a clear understanding of what is to come. This is a particular truth when seeking Chapter 13 bankruptcy relief.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy basically involves a debtor entering into a repayment plan with creditors under the guidance of the bankruptcy court. Notably, Chapter 13 bankruptcy is significantly different than Chapter 7 bankruptcy in that it takes much longer to obtain discharge. Where Chapter 7 proceedings can take three to six months to complete, Chapter 13 proceedings can take from three to five years to complete.
In a Chapter 13 bankruptcy, the debtor agrees to a specific repayment plan which requires monthly payments to a bankruptcy Trustee and payments to secured creditors such as the mortgage and the vehicles.. We have represented many individuals who have successfully completed their Chapter 13 bankruptcy, but it does require financial discipline on the part of the debtor. We are often asked Here are some suggestions for how to create and implement your Chapter 13 budget to ensure successful completion of the Chapter 13 bankruptcy.
· Use a spreadsheet program to create your budget, like Microsoft Excel or Google Sheets software. This software is flexible, easy to use, and can immediately run all of your calculations. There is a reason bookkeepers use this software.
· Locate documentation to calculate exactly how much income you have made in the last six-month period. It is essential that you are honest and accurate in reporting your income, as your repayment plan revolves around this estimate.
· Look at your last couple years of bank statements and credit card bills to examine and understand where your money is going. You might be surprised at what you discover (e.g. $300 per month on coffee?). Further, you can then categorize your expenses and consumption habits as either essential or non-essential. Anything that is essential (such as utilities, mortgage payment, child support, and food) will remain in your budget; while non-essentials (like season tickets to football games or lavish spa trips) will have to go. Individuals often find it helpful to take a notepad and write down every single purchase-no matter how small- for at least a month to see where their money is going.
· Create your budged based on the difference between your income and your expenses. Understand that you are going to have to survive the next several years on a very lean budget. It is critical to stick to this budget and to get your family members on board as well, even if it completely defies the lifestyle you’ve been accustomed to. In the end, the discharge of your debt will make the sacrifices well worth it.
You Need a Bankruptcy Attorney
If you are one of the many Americans struggling with debt that you can’t overcome, an attorney can help you. At Levitt & Slafkes, P.C., we provide smart, effective legal representation to clients seeking debt relief. We understand the struggles that our clients experience and are highly motivated to help them obtain some much-needed relief. Let us help you. Call Levitt & Slafkes, P.C., at (973) 323-2953, or reach us online to schedule a free consultation.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years.