What Chapter of Bankruptcy Should You File- A Las Vegas Bankruptcy Attorney Gives You Advice

As a Las Vegas Bankruptcy Lawyer I have first hand knowledge of the economic crisis that our nation is presently going through.  Vegas has been exceptionally hard hit by this financial crisis.  That is why, as a Las Vegas Lawyer, I have discovered many horror stories.  There are lots of, potential ways, to  resolve your debt problems. For example, debt consolidation loan, negotiating down your debt and bankruptcy.  However, you have to know about bankruptcy before you file. This article will help you understand the Chapter 13 bankruptcy.

A chapter 13 bankruptcy can be the best and sometimes the only option for those seeking debt relief. Nevertheless, there are several warnings that all debtors should fully understand before even considering filing a chapter 13 bankruptcy. This article will first, briefly go over, the differences between Chapter 7 and 13 bankruptcy and will then go into why you should be wary bout filing a Chapter 13 bankruptcy.

A chapter 13 bankruptcy and a chapter 7 bankruptcy vary greatly. Under a Chapter 7 bankruptcy, the debtor will not have to pay nearly all his debts. Therefore, absent certain statutory exceptions, once a chapter 7 bankruptcy is filed and authorized by the Bankruptcy Court, the debtor will be able to get a fresh financial start on his life.

On the other hand, chapter 13 bankruptcies take 3 to 5 years to be completed. With a Chapter 13 bankruptcy you are placed in a payment plan that lasts three to five years. This payment plan basically means you spend your creditors, a set amount, every month for three to five years. After the three to five years are finished, you will then receive a discharge for your debts.

One issue with filing a Chapter 13 Bankruptcy is that the completion rate for a chapter 13 plan is very low. For example, in my home town, Las Vegas, chapter 13 bankruptcies are only completed approximately 35% of times.

In conclusion, the majority of people who file a Chapter 13 are condemned to failing. So, the only time you should file a Chapter 13 bankruptcy is under the following situations:

1. You are behind on your home finance loan, you want too keep your home and you are not eligible for a financial loan modification. A chapter 13 only allows you keep your house. Also, with a Chapter 13 bankruptcy you can strip off the second mortgage. Additionally, federal mortgage loan modification programs only work for owner occupied properties. So, filing Chapter 13 maybe your only chance save investment properties that you might own.

2. You make money. Under a Chapter 7, BACPA regulations, the debtor is needed to pass a means test. The means test states, roughly, that you can only declare, a Chapter 7 Bankruptcy, if you are at or below the median income of the state where your are filing your bankruptcy. Hence, if you make money, you most likely cannot file a chapter 7 bankruptcy.

3. You want too keep non-exempt assets. Filing a chapter 7 bankruptcy will not leave you flat broke. The Chapter 7 Bankruptcy allows selected personal property to be exempt from creditors. But, there are definite limitations. By way of example, in Nevada, a personal car worth up to $15,000 is exempt from creditors. Therefore, if you wanted to keep your custom built muscle car or Rolls Royce a Chapter 7 bankruptcy may not be your best option.

To conclude, it may be beneficial that you should file a chapter 13 bankruptcy. Personally, I would only fie a Chapter 13 bankruptcy if the above situations were existing. As well, if you wish to keep certain assets you maybe able to buy those assets back from the trustee. Consequently, you may choose to keep your luxury car and still file a chapter 7 bankruptcy. Consequently, at the very least, only file a chapter 13, after considerable researching and after you have attained legal advice.  Please though, if you need to seek bankruptcy relief contact a trustworthy Las Vegas Bankruptcy Lawyer.

 

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