Bankruptcy Attorney | Bankruptcy and Receiving Social Security (Pt.2)
Bankruptcy Attorney | Differences in Chapter 7 and 13 Bankruptcy
In Chapter 13 bankruptcy, a trustee will not sell your nonexempt assets and distribute the proceeds to your creditors. That’s how it works in Chapter 7 bankruptcy. Rather, you will need to put together a repayment plan that shows your creditors how you plan to pay back some or all of your creditors. You get to keep your property in exchange for paying back a certain amount of the debt you owe. But remember that the more nonexempt assets you have, the more you will need to pay to unsecured creditors.
When you file for Chapter 7 bankruptcy, a trustee takes the nonexempt property, sells it, and uses the proceeds to pay your general unsecured creditors. But because you keep all of your property with Chapter 13, it’s unfair to your unsecured creditors if they do not get paid as much as they would have had you filed for Chapter 7.
Because of this, if you file Chapter 13 and create a repayment plan, you will still need to pay the general unsecured creditors a dividend at least equal to the value of your nonexempt assets. So if you have a large amount of nonexempt property, you hay have to repay the unsecured debts in full.
Chapter 13 and Social Security
While more courts are increasingly allowing debtors to keep Social Security payments in Chapter 13 bankruptcy, it will depend on where you file for bankruptcy.
All income, including your Social Security income, needs to be disclosed on your Chapter 13 bankruptcy petition and schedules. All disposable income is required to be contributed to the repayment plan. The higher the amount of disposable income you have, the more you are required to pay unsecured creditors.
Working with a Bankruptcy Attorney
When you decide to file bankruptcy, you should consider working with an attorney. As you can see from the above, there are many factors that need to be considered during your petition. A bankruptcy attorney can advise you on the following:
- the type of bankruptcy you should file
- how bankruptcy can help you
- what to expect during the process, and
- any potential difficulties they see with your case
Additionally, you should be able to address any questions or concerns you might have.
The Bankruptcy Process
Filing for bankruptcy requires you to fill out a packet of forms, including the Schedule I and Schedule J discussed above. Your bankruptcy attorney will have specialized software that helps to guide you through the process and also ensures that everything is prepared for the court. You will be required to provide information about your income, expenses, assets, and debts. Working with an attorney will ensure that the information on these forms is filled out accurately, and filed correctly.
Bankruptcy Hearings
You will need to attend a meeting of creditors after you file for bankruptcy. Depending on your specific filing, you might need to attend additional hearings. Your lawyer will advise you on if you need to be in attendance, or if they are able to represent you without you needing to be there, as sometimes you will not be required to be in attendance.
At all times your lawyer will help you to understand the process, as well as ensure that the court has all the information it needs to obtain from you, in addition to any forms. – Simone Resnik
Specializing in bankruptcy and foreclosure law for over 20 years. Call attorney David Pinkston for a free consultation today: (904) 389-5880. #FloridaBankruptcyAttorney #FloridaBankruptcy
If you are thinking about #bankruptcy or #foreclosure in the Jacksonville, Florida area, you should call attorney David Pinkston. David is very experienced with all aspects of bankruptcy law yet very personable and easy to talk to. Call Us Today! (904) 389-5880