Filing Chapter 13 with a Debt Settlement Lawyer

Missouri consumers consider bankruptcy when they need a debt-relief solution, but while it is a viable option, it is more complex than they realize. First, they must qualify for their preferred chapter, and a debt settlement lawyer can give them insight into the eligibility requirements.

Reviewing Chapter 13

The first step for qualifying for chapter 13 is to provide documentation about their income. Basically, the attorney needs income statements, bank statements, or pay stubs for the last six months. The attorney then adds the monthly income together to arrive at an annual salary, which determines if the consumer is eligible for chapter 13. Currently, the median income for St Louis is $29,156, but the value must be higher than this average annual salary.

Calculating Disposable Income

To identify disposable income, the attorney must identify all monthly obligations, which for the consumer is all expenses for their household. The total value of monthly obligations includes utility bills, child support, alimony, and payments that aren’t included in the bankruptcy, which, along with the bankruptcy payment, is deducted from the consumer’s wages. This value is their disposable income.

Identifying the Rules for the Case

The most common rules for a chapter 13 bankruptcy applies restrictions against opening new lines of credit. The consumer must also use their disposable income to pay additional debts, which includes debts that weren’t discharged or added to the claim. Any debts that are discharged are no longer their responsibility if they complete the bankruptcy as directed.

Additionally, the consumer must attend a credit counseling course. The attorney helps them identify what programs are state approved, and they complete this requirement before attending their hearing. In some states, the consumer may need to attend an extra program that helps them rebuild their credit after bankruptcy.

Chapter 13 offers Missouri consumers with a repayment structure, and opportunity that allows them to pay all their debts together reducing the total value they pay each month. Essentially, they are paying a smaller portion for the debt, and in some cases, the creditor may reduce the balance for a quicker payoff. Consumers should hire a debt settlement lawyer to start a claim by visiting now.

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