Ellett Law Offices, P.C.

Since 1993, Ellett Law Offices has provided thousands of clients with quality bankruptcy attorney representation. Bankruptcy law is complicated but you will be guided through the process by a knowledgeable and experienced bankruptcy attorney.

What Happens if I Can’t Pay my Chapter 13 Payment Plan?

November 21, 2014 by  
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payment planMany people who are experiencing financial problems and make a consistent monthly income can benefit from filing for Chapter 13 bankruptcy1. Under Chapter 13, a debtor’s debts are reorganized under a court approved plan and monthly payments are made to the bankruptcy trustee who distributes the money amongst various creditors. While payments are being made, a debtor’s assets are protected from collection attempts including repossession and foreclosure. In many cases, debtors who are at imminent risk of losing their assets are able to keep them by filing Chapter 13.

The Hardship Discharge

People who enter into Chapter 13 bankruptcy must make payments to a Chapter 13 trustee. In some cases, it may become impossible for the debtor to keep making payments due to circumstances out of their control. In this circumstance, the debtor may be eligible for a Chapter 13 hardship discharge under 11 U.S.C. § 1328(b)2. Under this provision, a debtor may be entitled to a discharge of his or her debts if:

  • The circumstances making the debtor unable to pay his or her debts are beyond the debtors control and exist through no fault of the debtors
  • Creditors have received at least much as they would have received had the debtor filed for Chapter 7 bankruptcy
  • Modification of the plan would not be practical

This type of discharge is more limited than the discharge that occurs at the end of Chapter13 and does not include any debts that would not be discharged in a Chapter 7 bankruptcy. Examples of the types of circumstances that may justify a hardship discharge include illness or injury that would make it impossible for a debtor to pay even under a modified plan.

Contact a Phoenix bankruptcy attorney today to schedule a free consultation

Anyone considering Chapter 13 bankruptcy or seeking a hardship discharge should discuss their situation with an experienced bankruptcy lawyer as soon as possible. In many cases, the assistance of a lawyer can have a significant impact on the outcome of a judicial proceeding. Attorney Ronald J. Ellett has been assisting Phoenix residents file for bankruptcy and obtain a fresh start for over 20 years. To schedule a free consultation with Mr. Ellett, call our office today at (602) 235-9510.

1Source: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx

2 Source: http://www.law.cornell.edu/uscode/text/11/1328


What is the Difference between a Chapter 7 and a Chapter 13 Bankruptcy?

August 25, 2014 by  
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versusMillions of consumers every year benefit from consumer bankruptcy. Among the most commonly filed forms of bankruptcy are Chapter 7 and Chapter 13, both can only be filed by natural persons, not by corporations.  A husband and wife can file jointly in the same case or file separately.

While both Chapter 7 and chapter 13 provide consumers relief under the United States bankruptcy code, there are significant differences between the two.  As a result, the type of bankruptcy appropriate for your situation will depend on your specific circumstances. An experienced Phoenix bankruptcy attorney will be able to review your finances and then advise you as to what type of bankruptcy, if any, could benefit you.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common type of bankruptcy filed in the United States. Also known as a “liquidation bankruptcy,” Chapter 7 bankruptcy involves liquidating a debtors non-exempt assets and using the proceeds to pay off outstanding debts. Most debts that are not satisfied are discharged, meaning that they are completely wiped out. Importantly, there are certain debts that are nondischargable in most circumstances, including student loans and any unpaid child support payments. Among the types of debts that are generally dischargeable include:

  • Credit card debt
  • Personal loans
  • Civil judgments
  • Business loans
  • Payday loans

More information here:

Chapter 13 Bankruptcy

Chapter 13 bankruptcy differs significantly from Chapter 7 bankruptcy. In  a Chapter 13, a debtor is able to keep most of his or her property, while restructuring debts and making payments of a court approved payment plan.  In many chapter 13 cases only a very small fraction of unsecured dect is repaid- most of it is discharged upon completion of the case. In a  Chapter 13 bankruptcy a consumer makes payment to a trustee who distributes funds to creditors. Generally, Chapter 13 bankruptcy is beneficial for people who have steady income who are having difficulty keeping up with their monthly payments. Chapter 13 can also be effectively used to avoid foreclosure in many cases as well.

More information:

Contact a Phoenix bankruptcy lawyer today to schedule a free consultation

If you are experiencing financial difficulty, bankruptcy may be an option you may want to consider. Bankruptcy is not right for everyone, and an experienced Phoenix bankruptcy lawyer will be able to go your situation and advise you if he or she believes that bankruptcy could benefit you. Attorney Ronald J. Ellett has over 20 years of experience helping Phoenix consumers obtain a fresh start through bankruptcy. To schedule a free consultation, call Ellett Law Offices today at (602) 235-9510.