You may be wondering whether you should file for Chapter 13 bankruptcy or are in the process of deciding to file for Chapter 13 bankruptcy, and now you have some questions about that. What income will I be able to keep? How are secured debts and unsecured debts distinguished? Another question might be, can I keep my tax refunds, can I sell my home while in Chapter 13 after I file? Unfortunately, there is not a cut-and-dry answer to all of these questions. So, we have put together some information to give you a sense of what might happen in a typical case post-bankruptcy filing. Additionally, we touch on what Dantzman & Dantzman may help you do during the process to secure your tax refund after filing for Chapter 13 bankruptcy in New York.
The Repayment Plan
The details of your repayment plan can make all the difference when it comes to what you will be allowed to keep after filing for bankruptcy. A major component of Chapter 13 bankruptcy is the establishment of a repayment plan that is approved by the bankruptcy court. A repayment plan stipulates how you will pay off your debts, at what percentage, what income and other assets may go towards that repayment, and also how long you have to repay. The main focus will always be on consolidating and lowering the payments, on your existing debt. The development of this restructuring plan will require that you complete credit counseling and financial management courses, which are designed to help ensure you understand your budget and how to make these payments while living within your means.
Depending on the details of the plan, you could be asked to forfeit surplus income not necessary for your normal reasonable household expenses. Excess tax refunds may be required to assist with those repayment efforts. Debtors will sometimes change their withholdings while they are in chapter 13 to get more money back each paycheck and to also minimize their tax refunds so that they can keep this money for living expenses and not have to turn it into their creditors.
Whether retaining your tax return is feasible will be case-dependent; however, working with a qualified bankruptcy attorney will be your best bet for making it happen. Dantzman & Dantzman can advise you on this process and push for the exemption of your tax refund so you can hold onto that money rather than forfeiting it as one of your payments to your bankruptcy trustee.
Let Dantzman & Dantzman Help You File For Chapter 13 Bankruptcy
If you are contemplating or have already decided to file for bankruptcy, we recommend reaching out to a bankruptcy law firm that can advise you properly on the process. At Dantzman & Dantzman, we have helped countless clients navigate bankruptcy filing and get the most out of their repayment plans. We can answer your questions to help you gain a better understanding of the bankruptcy process and make sure your chapter 13 plan is put together properly for success. Contact us for help filing for chapter 13 bankruptcy.