QUESTION
If I file a chapter 13, what happens if there is no money to repay creditors?
Asked on Nov 10th, 2011 on Bankruptcy - California
More details to this question:
If I file this, what happens if my expenses are more than our monthly income and there is no money left to repay creditors.
14 ANSWERS
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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If you have no disposable income, then you will not qualify for a Ch. 13. You will need to look at filing a Ch. 7.
Answered on Nov 16th, 2011 at 1:49 PM
If your expenses are larger than your monthly income, and there will be no money left to pay the creditors, then you should be applying for Chapter 7 Bankruptcy instead of Chapter 13 Bankruptcy. Chapter 7 Bankruptcy proceedings applies a "monthly means" test that specifically looks to see if your economic situation is so bad that you would be unable to make any sort of payment plan to your creditors. Now that said, it is important to note that although your expenses may be higher than your income, if you still have a lot of assets, especially in value greater than your state's exceptions, then the U.S. Bankruptcy Trustee could order that these assets be liquidated in order to pay off the debt. This includes cars you may have or real estate. The U.S. Bankruptcy Trustee wants to see the whole picture of your finances, so simply having greater expenses than income doesn't necessarily mean that you will be exempt from making payments or having assets taken away to pay your outstanding debts.
Answered on Nov 14th, 2011 at 12:53 PM
Seth D. Schraier, Esq. Law Office of Seth Schraier 3647 Broadway Suite 4G New York, New York 10031 Cell: (914) 907-8632 www.SchraierLaw.com
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Then your case will be dismissed.
Answered on Nov 14th, 2011 at 11:42 AM
Family Law Attorney serving McDonough, GA
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South Atlanta Family Law
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You must be able to pay something back to your creditors in a chapter 13; otherwise, your chapter 13 plan will be rejected and you will not qualify to file. If your expenses are more than your income, maybe you should consider filing a chapter 7 instead.
Answered on Nov 14th, 2011 at 11:33 AM
1 Award
Your case will be dismissed. You should be in Chapter 7 in that situation.
Answered on Nov 14th, 2011 at 11:30 AM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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A chapter 13 is designed for debtors with regular income that have disposable income to pay creditors some or all of their claims.
Answered on Nov 14th, 2011 at 11:28 AM
You can only file Chapter 13 if there is disposable income to be paid to creditors. Chapter 7 is often a better option for those with expenses that exceed monthly income but only if you are otherwise eligible and qualify.
Answered on Nov 14th, 2011 at 9:15 AM
judith runyon
Your case will be dismissed, because you don't qualify for a chapter 13.
Answered on Nov 14th, 2011 at 9:09 AM
You may not qualify for a Chapter 13. Your bankruptcy attorney will perform a means test based on your income and your debts to determine whether you qualify for a Chapter 13 repayment or a Chapter 7 discharge. Some people qualify for both. A Chapter 13 plan will not be accepted by the bankruptcy trustee if you cannot make the payments.
Answered on Nov 14th, 2011 at 9:00 AM
Daniel James Wilson
A Chapter 13 plan cannot be confirmed with 0$ payment plan.
Answered on Nov 14th, 2011 at 8:52 AM
Chapter 7 Bankruptcy Attorney serving Appleton, WI
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Sisson & Kachinsky Law Offices
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If that is the situation then perhaps u should have been filing for a chapter 7. If u have already filed for the 13, then consider converting to a chapter 7.
Answered on Nov 11th, 2011 at 10:59 PM
Bankruptcy Chapter 11 Attorney serving Dacula, GA
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Chronister Law Firm, LLC
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You will not get your plan confirmed if you do not have disposable income to at least pay your secured creditors. Your case would be converted to a Chapter 7 or dismissed.
Answered on Nov 11th, 2011 at 9:44 PM
Glen Edward Ashman
That would indicate two things: (1) You filed without a lawyer, which is almost always a way to make sure a chapter 13 will fail. (2) Your case will be dismissed as there is no way to submit a plan, and you wasted your filing fee. With numbers stacked that way, you are either ineligible to file, or should not file Chapter 13.
Answered on Nov 11th, 2011 at 9:44 PM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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You got to make plan payments of some minimum amount and that depends on your ability to pay and what is mandatory that you pay in the plan. Chapter 13 is highly complex bankruptcy and that is why you need to have a lawyer explain it to you and give you an opinion as to whether that would be best for you and if you qualify.
Answered on Nov 11th, 2011 at 9:40 PM