One of the main misconceptions people live under about Chapter 13 is that some people are worried their employer will find out and it will affect their job. Don’t worry; according to the bankruptcy code, it’s actually illegal for your employer to fire you because you filed bankruptcy. In any case, they won’t find out about it unless you work in a special industry where you have to report that sort of thing.
Another misconception is that it will cost a ton of money in attorney’s fees. One of the fringe benefits of a Chapter 13 bankruptcy is that many of the attorney’s fees are actually paid back through the payment plan. You will typically have to pay a small down payment upfront, but most of your attorney’s fees will be paid back out of your regular plan payments to the trustee.
There is also the fear of losing their house or your car or any of their personal possessions. That rarely happens in any kind of a bankruptcy, but especially in a Chapter 13. In a Chapter 13, you won’t lose anything.
There is also a misconception about how common bankruptcy is. Many people think it’s rare, but it’s likely that someone you know right now has filed bankruptcy and the only reason you don’t know is because few people talk about it because of the stigma. But it’s more common than you know.
With the recession that we’ve had and the problems of the real estate market, lot of people have had difficulty keeping up with their debts and bankruptcy is a great way to help with that. Many people have done it and it’s really not something that to be ashamed of.
If My Case Was Dismissed By the Trustee, Can I Re-file it?
Of course! Quite often, a debtor can even get the dismissal withdrawn by the court. This happens quite often, especially when people try to file a bankruptcy themselves and mess something up. The case will get dismissed, but they can petition for the judge to reopen the case if they have grounds. With an attorney helping, it’s usually not too tough to do. If it’s dismissed for some other reason that isn’t easily fixable, then you can re-file it, although there is usually a waiting period of about six months before you can file again.
There is a limit to how often a debtor can receive a discharge, which means they won’t be able to get another one for a period of years. The length of time depends on which Chapter you get the discharge under. However, if there is no discharge, you can re-file the case after the waiting period.
Some claim there is a limit of three times to re-file, but there is nothing in the law that says it can’t be filed more than that. I’ve seen cases in which people have tried to do it themselves three or four times and failed, then finally come to me and then we’re able to file it. So, there is no limit to the number of times you can re-file, just a limit to the number of times you can get the discharge.
How Long Does A Chapter 13 Bankruptcy Last?
The longest it can last is five years and it can’t be extended beyond that point. Really, the relevant issues that determine how long a Chapter 13 will last are income level and how far behind the debtor is. If the debtor is above the median income level for their estate and household number, they’ll have a five-year repayment plan and the amount of the repayment will be the amount of monthly disposable income they have.
After the five years, the debtor receives a discharge on everything that’s leftover that wasn’t paid back. If the debtor is under the median income level for your household and your estate, they can have the plan last as short as three years, but they can take up to five years if they want, depending on the situation.
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