Chapter 13 Bankruptcy Attorney in Reno, Nevada

People find themselves struggling to pay their monthly bills for many reasons. They may be paying for unexpected medical expenses, barely making minimum payments on maxed-out credit cards, or are behind on mortgage payments. Findings from the 2019 Prosperity Now Scorecard indicated that 40% of Americans are one missed paycheck away from poverty, and that was before the COVID-19 pandemic caused the economy to crash. For those smothered by debt, their physical and mental health, personal relationships, and overall well-being can suffer.

Nearly 8,000 people filed for bankruptcy in Nevada in 2020. If you have become overwhelmed by debt, Chapter 13 bankruptcy may provide the solution you need to get a fresh financial start. Chapter 13 bankruptcy is not shameful. It’s a smart way to get you back on the right financial path, making sound financial decisions for the future.

The Law Office of Scott N. Tisevich guides clients in Reno, Carson City, Las Vegas, and in Churchill, Lyon, Story, and Douglas counties in Nevada through Chapter 13 bankruptcy to get their debt under control. Call today to schedule a consultation to discuss your options.

Overview of Chapter 13 Bankruptcy

Chapter 13 bankruptcy does not simply wipe out all of your debt. Instead, it offers you the opportunity to keep the property you own in exchange for agreeing to pay back creditors over a three- to five-year period. Chapter 13, often called the “wage earner’s plan,” is a solid option for those who have regular income and want to get their debt under control by managing it more effectively.

Chapter 13 is a good option for wage earners who want to avoid foreclosure on their home or having their vehicle repossessed due to late and missed payments. It offers a way to “catch up” with overdue payments. The filing provides a “stay” that prohibits creditors from, for example, foreclosing on your home until your debt is discharged at the end of the repayment period. Chapter 13 can also allow you to redistribute other secured debt over the repayment period of three to five years and can protect those who co-signed for secured debt.

Chapter 13 bankruptcy is like a consolidation loan. The debt remains but is restructured in a way that makes it easier for you to pay off over time. It can help you avoid losing your secured property and soften the impact bankruptcy can have on your credit score.

Chapter 13 bankruptcy will not discharge debts such as child support, alimony, and taxes. You will need to keep current with those payments throughout the life of the bankruptcy. Chapter 13 might, however, help you catch up with payments in arrears.

Qualifying for Chapter 13

To file for Chapter 13, you must meet certain requirements regarding secured and unsecured debt, you must have a steady income, and you must file as an individual, not a business.

Until April 2022, your secured debt must be less than $1,257,850. Secured debt is anything secured by the property itself, such as a real estate mortgage or vehicle loan. Unsecured debt may not exceed $419,275. This includes credit card debt and medical bills.

You will need to prove to the court that your income is regular and sufficient to pay your normal monthly obligations as well as the monthly repayment sum. You will also need to demonstrate that you are filing for relief in good faith and not attempting to manipulate the law.

The Process of Filing

Chapter 13 filing requirements include:

• A list of all creditors, the amount owed, and the nature of the debt

• The source, amount, and frequency of your income

• A list of all of your property

• A detailed list of your monthly expenses, including debt, groceries, transportation, taxes, utilities, etc.

Note that individuals filing for Chapter 13 bankruptcy who are married must file this information about their spouse, even if the two of you are not filing jointly for relief.

If you meet the requirements and demonstrate the ability to maintain the monthly installment plan, you will pay the monthly lump sum to a court-appointed trustee who will then distribute it to your creditors as approved by the court. If you are successful, the court will discharge your bankruptcy at the end of the repayment period.