2 Issues to Explore Before Deciding to Seek a Chapter 13 Bankruptcy

2 Issues to Explore Before Deciding to Seek a Chapter 13 Bankruptcy

The reason that you’ve decided to talk with a Chapter 13 bankruptcy attorney in Valdosta is that you see no possible way to pay off all of your debts. Rather than watching as things get worse, seeking protection from the court is the most practical solution. As you consider this option, there are details that you need to understand. Here are two examples of things you should discuss with your attorney.

Understanding the Difference Between Priority and Non-Priority Debt

As the bankruptcy attorney in Valdosta will explain, some of your debts may be considered priority obligations while others are considered to be non-priority obligations. Priority obligations include taxes you owe, back child support, and other debts that must be paid in full. Over the life of your Chapter 13, these debts are paid first.

Non-priority debts may include obligations like credit card balances. Depending on the duration approved by the court and the total amount of non-priority debts, these balances may be settled in full or in part. The court does not remit payments to non-priority debt holders until all of your priority debts are settled in full.

Tax Refunds and Your Chapter 13

In most cases, the terms of your bankruptcy will require that you surrender any state or federal tax refunds that you receive until the case is discharged. There are some exceptions, but the qualifications for keeping your refunds are stringent. Your Chapter 13 bankruptcy attorney Valdosta can help you determine if you happen to meet one of those exceptions or if you will need to forward all refunds to the court.

Remember that your Chapter 13 bankruptcy attorney Valdosta wants you to understand every aspect of this type of bankruptcy protection. Listen closely to what your legal counsel tells you and feel free to ask any questions that come to mind. If this solution seems like the best one for you, your attorney will proceed with preparing the petition and submit it to the court.

For more information visit Charles Farrell Jr. LLC.