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Michael D. Hart, P.C.
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What debtors should know about Chapter 13 bankruptcy

Virginia residents and others who file for Chapter 13 bankruptcy may repay their debts over three or five years. The length of time during which they must make payments depends on their income relative to the median in the state where the case is filed. To file for Chapter 13 protection, an individual must show proof that he or she has filed tax returns in the past four years.

A debtor must also present a copy of his or her most recent tax return and a credit counseling certificate of completion. Finally, a debtor must propose a repayment plan. Payments under that plan are made within 30 days that a person files for bankruptcy. Those payments will be held by the court until the plan itself has been confirmed or denied. Debtors will also need to pay a bankruptcy filing fee within 180 days of seeking protection from creditors.

A payment plan must allow for certain debts to be paid in full, such as child support and alimony. Filers who have a mortgage, a car loan or a secured personal loan must remain current on those debts during the duration of the bankruptcy case. Individuals must also be sure to file tax returns every year and honor the terms of the repayment plan until it ends.

Filing for Chapter 13 bankruptcy may allow a person to discharge unsecured debts and gain control over secured or priority debts. An attorney may help a person create a payment plan or otherwise assist a debtor throughout the bankruptcy process. While a case is ongoing, creditors are generally unable to contact a debtor. This may relieve some of the mental stress associated with having overwhelming financial obligations.

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Michael D. Hart, P.C.
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Roanoke, VA 24011

Phone: 540-627-6520
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