How Chapter 13 Payment Plans Work
Under Chapter 13, you propose a plan to repay your creditors all or part of what you owe, usually using your future income. If the court approves your plan, you will make payments on your debts for either three or five years. The time and amount of your repayment plan will depend on:
- your income
- the kinds of debt you have
- the value of the property you own, and
- your expenses.
If your current monthly income is less than your states median income for your family size, your plan will usually be for three years. If your income is greater than the state median income, you must usually propose a five-year plan.
Kansas Bankruptcy Process How To File Bankruptcy In Kansas
2005 Bankruptcy Act Credit Counseling The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy on or after October 17, 2005, to undergo credit counseling within six months before filing for bankruptcy relief and to complete a financial management instructional course after filing bankruptcy.
2005 Bankruptcy Act Means TestUnder the 2005 Bankruptcy Act your income and expenses will be analyzed to determine if you qualify to file a Chapter 7 or if you must file Chapter 13. To apply the means test, the courts will look at the your average income for the 6 months prior to filing and compare it to the median income for Kansas. If the income is below the median, then you may choose Chapter 7. If your income exceeds the median, the remaining parts of the means test will be applied to determine if you can file Chapter 7 or if you must file Chapter 13.
Gathering PaperworkTo begin the bankruptcy process you must itemize your current income sources major financial transactions for the last two years monthly living expenses debts and property . You should also collect your tax returns for the last two years, deeds to any real estate you own, your car titles, and the documents for any loans you may have.
The cost for filing a Chapter 7 bankruptcy is $306. This fee may not be waived but you may be able to pay it in installments. The fee of $281 for a Chapter 13 bankruptcy cannot be waived.
Who Files For Bankruptcy
The typical bankruptcy filer is a person already in fragile economic circumstances, often with large amounts of credit card debt, who then suddenly gets hit by hard lucklike job loss, injury, divorce, or uninsured medical expensesleading to unmanageable payments and insurmountable penalties.
Bankruptcy is designed to help people like this, who need help making a clean breakto get a fresh start on life, rather than struggling under the crushing burden of unpayable debt.
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Find Out If You Qualify For Bankruptcy
To qualify for Chapter 7 bankruptcy, you must show that you dont have enough income to repay your creditors a reasonable amount. You can do this by:
- proving that your income is below the Kansas median income for your household size, or
- comparing your income to expenses under a complex formula called the bankruptcy means test to show that you cant pay.
If your income is above the median income for your state and family size and the means test shows you have enough disposable income to make reasonable payments to your creditors, you may still qualify to file under Chapter 13. To qualify for chapter 13, your debt must be under the limit set by the bankruptcy code and you must be current on your tax filings for the last four years.
To take the means test, you can use our free means test calculator.
How Long Will Bankruptcy Take
About 21-40 days after you file the bankruptcy petition and other forms, you will appear before the bankruptcy trustee at the meeting of creditors hearing. Your creditors will have received notice about the bankruptcy filing, and they have the opportunity to appear at the hearing. Generally, about 60-90 days after the creditors hearing, the court will issue a discharge of your debts. However, depending on the complexity of your case it can take longer.
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Qualifying For Bankruptcy In Kansas
If you’ve never filed for bankruptcy before, you’ll meet the initial requirement. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Find out how long you’ll need to wait if your situation involves multiple bankruptcy filings.
You’ll also need to meet specific chapter qualifications.
You’ll qualify for Chapter 7 bankruptcy if your family’s gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website .
Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.
Qualifying for Chapter 13 can be an expensive proposition because the extra benefits come at a hefty price, and many people can’t afford the monthly payment. To qualify, you’ll pay the larger of:
Understand Which Debts Will Be Eliminated
The goal of bankruptcy is to get relief from your debt. As such, it can be helpful to understand the types of debt that can be eliminated when filing for bankruptcy.
Many debts can be discharged. This includes unsecured credit cards, medical debts, personal loans, old utility bills, judgment debts, and old lease payments
Other debts cannot be discharged. This includes back alimony or child support, debts owed to the government, judgments related to DUI accidents, tax debts, and administrative costs or restitution
Tax debt receives special treatment in Chapter 13. You may not know how much debt you have. As such, you can access a free credit report annually, thanks to the US government. This can help you estimate how much debt would be eliminated by filing for bankruptcy.
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What Is A 341 Hearing
Everyone who files for bankruptcy must attend a 341 hearing, which is also called a “creditors meeting.” The meeting is conducted by the bankruptcy trustee assigned to your case. The trustee will put you under oath and may ask you questions about the information you’ve provided on your bankruptcy forms. Creditors may also show up at the hearing to ask you questions, but it’s not common for them to do so.
Bankruptcy law also requires the trustee to ask you questions to be sure you understand how bankruptcy works and the potential consequences of filing bankruptcy, such as the effect on your credit record.
For most bankruptcy filers, this will be your only trip to the courthouse . Most court websites post schedules of 341 hearings, and when you file, you will be notified of your hearing date. When you show up for your hearing, you will find that many other people have hearings set for the same day. You will sit and wait for your name to be called–usually in a room somewhere in the courthouse or federal building, but probably not in a courtroom.
What Is A Chapter 11 Bankruptcy Case
Chapter 11 is normally used by commercial enterprises that wish to keep operating a business and repay Creditors through a debt repayment plan approved by the bankruptcy court.During the first 120 days, the Debtor has the exclusive right to file a plan of reorganization and provide Creditors with a disclosure statement that provides the Creditors with enough information to evaluate the plan. The bankruptcy court makes the ultimate decision to approve or reject the reorganization plan.Under the plan for reorganization, the Debtor can reduce its debts by discharging some or repaying only a portion of its obligation under the original debt.Under this Chapter, the Debtor undergoes a period of consolidation and leaves with a reduced debt load and reorganized business.
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What Happens If You File In The Wrong Place
If you file your papers in the wrong bankruptcy court, it may delay your case. The bankruptcy trustee will probably bring the matter to the attention of the bankruptcy court judge. If the judge then finds that the trustee could more easily handle your case in another location, the judge may transfer or even dismiss your case. Because of these potential hassles, if you have any questions about the best place to file, it would be wise to get legal help before you submit your papers to a court.
Do I Need A Lawyer To File For Bankruptcy
You’re not legally required to use a lawyer to file for bankruptcy. Whether you’re a good candidate for handling your own bankruptcy depends on the complexity of your financial situation and your willingness to take the time to learn the rules of bankruptcy. If you’re not the type of person that is willing to carefully read a lot of information and follow instructions to the letteror if your situation has you feeling too overwhelmed to do sothen self-help is probably not for you.
Evaluating your financial situation. If you owe only unsecured debtlike credit card charges or medical billsyou may well be able to file for bankruptcy on your own. But you must also consider are the amount and type of property you own. If you own your home, have substantial retirement savings, or other substantial assets, you may want to consult a lawyer to make sure your property is not at risk.
A good way to approach the decision of whether to hire a lawyer is to buy Nolo’s book How to File for Chapter 7 Bankruptcy. It will give you a good idea of what issues may arise when you file, and flags specific situations when a lawyer’s help is called for. It will also give you a good sense of whether the complexity of the filing process is something you’ll want to take on alone.
Finding a lawyer. For more information about finding a qualified bankruptcy lawyer near you, see the Lawyers section of this website.
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Take Credit Counseling Course
You have to take two mandatory credit counseling courses to complete your Chapter 7 bankruptcy. The Chapter 7 trustee may request the certificate of completion in the meeting of creditors. The first course is a pre-bankruptcy course, and the second is the pre-discharge course.
If you are filing with an attorney, your attorney may have suggestions for both the credit counseling and debt education course. If not, you can see the list of approved credit counseling courses in Kansas.
Local Bankruptcy Lawyers Explain Your Options And Exemptions
In most cases, all it takes is one catastrophic event or one turn of bad luck to take you from financially stable to drowning in unmanageable debt. Perhaps you suffered an injury or illness that left you with crushing medical debts. Maybe you lost your job or made an investment that failed to pay off. Whatever the reason, if you are struggling with overwhelming debt, then filing for bankruptcy may be a viable option to help you reclaim control of your finances. Despite the stigma sometimes associated with bankruptcy, this process can help you end creditor harassment, save your house from foreclosure and discharge certain debts that you cannot repay. The details of the process will depend on your circumstances when you decide whether to file for bankruptcy. However, the end goal is still the same: eliminate your debts and give yourself a fresh start financially.
There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13. Although either can relieve you of unwanted debts, they work very differently. An experienced Kansas bankruptcy lawyer can offer you advice on which choice is best for your unique situation, and may be able to offer you bankruptcy alternatives as well. Below, local attorneys explain the basics of both types of bankruptcy and list the exemptions you may be able to use in your case.
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Kansas Bankruptcy Exemptions: What Property Can I Keep
Exemptions are listed in the U.S. Bankruptcy Code, but states can pass their own exemption laws. Since you are able to keep exempt property, it is important that you understand what is exempt before you file bankruptcy.
Property that is exempt is often only exempt up to a certain dollar value. These limits apply to your equity in the property rather than its total value. States have different rules regarding exemptions, and some states allow you to choose between federal exemptions and the states exemptions. This is not the case in Kansas.
If you file for bankruptcy in Kansas, you must use the Kansas list of bankruptcy exemptions. Keep in mind that married couples who file jointly can double the exemption amount for any property in which both spouses have an ownership interest.
Lets take a look at some of the most popular Kansas exemptions to get a general sense of what property youll be able to keep. Remember, these numbers may periodically change, so its always best to consult with an experienced bankruptcy attorney before filing for bankruptcy.
What Types Of Debt Cant Be Discharged By Filing Bankruptcy In Kansas
Filing for bankruptcy doesnt mean that every single debt you have will go away. There are exceptions under Kansas law. These include:
- Back child support and alimony
- Student loans
- Income tax debts incurred within the past three years, plus all other tax debts
- Legal fines and penalties, including tickets
- Debts owed for an injury or death that were the result of a DUI
These apply to both chapter 7 and chapter 13 bankruptcies in Kansas. You must also continue to pay secured debts if you want to keep the property.
In chapter 7 bankruptcies, a judge may rule certain types of debt non-dischargeable if they are challenged by the creditor. These can include credit purchases of luxury goods within 60 days of filing, loans or cash advances of $1,150 or more within 60 days of filing, debts incurred through illegal activity, and certain debts owed under a divorce decree.
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What Are The Pros And Cons Of Filing Bankruptcy In Kansas
Pros:
- Stops creditors from trying to collect money from you immediately after filing for bankruptcy protection
- Certain debts are discharged, providing relief
- In the right situations, bankruptcy can provide a much-needed fresh start or some breathing room to get finances back under control
- A chapter 13 bankruptcy can help prevent foreclosure or loss of other property held in secured loans
Cons:
- In chapter 7 bankruptcy, loss of non-exempt property that is sold to pay off debt
- In chapter 13 bankruptcy, loss of freedom in money management and spending during the repayment period
- A bankruptcy can negatively impact your credit score . A chapter 7 bankruptcy stays on your credit report for 10 years, and a chapter 13 bankruptcy for 7 years.
- A bankruptcy will not eliminate the debt for co-signers on a loan. They may still have to pay all or part of the debt.
Will The Court Staff Explain The Filing Procedure To Me
To some extent, yes, but it depends on the court.
Some courts are quite willing to help non-attorneys and will give you a packet of information that explains the filing procedure in detail, and in plain English.
Other courts are quite hostile to debtors attempting to represent themselves and will make it a point not to help you at all.
The difference between courts can be dramatic, as evidenced by the wide range of difference between various court websites.
See the “court ratings” section on this page. The list of courts that “get it” provide helpful information to non attorneys.
If the staff at your court tells you that they can’t offer you any help, you may wish to refer them to the websites of these other bankruptcy courts that manage to provide ample help the general public.
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Exempt Assets For Bankruptcy In Kansas
No one is ever excited to file for bankruptcy, but sometimes there is no other option. Your bills are unmanageable, leaving you with no choice but to seek the protection of the court system. Fortunately, creditors cannot take everything you own. You are entitled to keep certain assets that are needed for day-to-day living.
A Look At Exempt Assets For Bankruptcy
While bankruptcy happens in federal court, your assets are managed differently depending on the state where you live. The majority of states use the exemption laws set by Congress, but 17 states, including Kansas, have a separate set of exemption laws. You have a choice of which exemption system you want to use and, in some cases, you can mix and match federal and state laws, depending on what is best in your particular situation. Its best to contact an attorney when you want to file for bankruptcy. They can decide what route is best for you.
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How Do You File Bankruptcy In Kansas
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