Idaho Falls Chapter 13 Bankruptcy Attorneys

Guiding Idaho Residents Through Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as a “reorganization” bankruptcy, is an option for debtors who have the ability to repay a portion of their debt. Unlike Chapter 7, which wipes out most debts and assets, Chapter 13 involves a repayment plan that lasts between 3 to 5 years.

The length of the repayment plan depends on how much debt the debtor has. In most cases, debtors must pay some portion of their debt and keep up with their regular monthly payments. However, in Chapter 13, the court can allow the debtor to skip certain payments if the debtor does not have the ability to pay.

Are you behind on your taxes? Call (208) 271-4403 for help filing Chapter 13 bankruptcy.

How Much Debt Can You Repay in Chapter 13?

The amount of debt you can repay in a Chapter 13 bankruptcy is determined by a calculation called the "means test." The means test is based on your income and expenses.

If your disposable income is less than the median income for a similar household in your state, you will be allowed to repay all of your unsecured debt, including credit card debt, medical bills, and personal loans. If your disposable income is higher than the median income, you will be able to repay some, but not all, of your unsecured debt.

You will not be able to repay any of your secured debt, such as a mortgage or car loan, in a Chapter 13 bankruptcy. Instead, you will be directed to make payments to a trustee who will sell the secured property and use the proceeds to pay back the creditor.

What Is the Purpose of the Means Test?

The purpose of the means test is to prevent debtors from paying back more debt than they can afford. If a debtor earns too much, they will not be allowed to repay all of their unsecured debt. If a debtor earns too little, they will be allowed to repay all of their unsecured debt. In either case, the debtor will be able to repay some, but not all, of their unsecured debt.

When determining whether a debtor can afford to repay all of their unsecured debt, the means test takes into account the debtor's income, expenses, and property owned. The means test is based on the debtor's current income and expenses, not what their income and expenses were when they fell behind on their debt.

Why Choose Tolson & Wayment?

Our Idaho Falls Chapter 13 bankruptcy lawyers at Tolson & Wayment can help you determine if you are eligible to repay all of your debt or only a portion of it. We can also help you determine if you can keep your home or car. We are committed to helping you get the most out of your bankruptcy.

Call (208) 271-4403 to schedule your free initial consultation with our Idaho Falls Chapter 13 bankruptcy attorneys.

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  • Do I Need Title Insurance When Buying a Home in Idaho or Montana?

    It is generally a smart idea to get title insurance even if you perform a thorough title search on the property you are intending to purchase. Title insurance can offer financial security if an unexpected title issue arises down the road.

  • What Are the Advantages of a Conservation Easement?

    Beyond environmental mindfulness, a conservation easement can provide considerable tax and estate planning benefits. Because conservation easements cannot typically be undone, they lower a property’s value, thus lowering the property owner’s overall taxable estate. The property owner may also be able to deduct the value of the conservation easement on their personal tax return.

  • What Is a Conservation Easement in Idaho or Montana?

    A conservation easement is a type of voluntary agreement made between a property owner and either a qualifying nonprofit or a government agency. When a property owner decides to establish a conservation easement, they agree to permanently limit the types of development that can occur on that property. For example, a conservation easement on a property with a forest teeming with natural resources may mandate that the forest never be torn down or developed. A conservation easement becomes part of the property’s deed.