Chapter 13 Bankruptcy provides for the adjustment of debts of an individual with regular income. Typically an individual would file Chapter 13 to save a house from foreclosure, or when their income is too high to qualify for Chapter 7. Either way, My job as your Chapter 13 attorney is to put you on as a minimal payment plan as possible that you can afford. Under Chapter 13, debtors propose a repayment plan to make payments to creditors over three to five years. During this time the law forbids creditors from starting or continuing collection efforts.
Advantages of Chapter 13
Chapter 13 bankruptcy offers individuals a number of advantages over liquidation under Chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and cure delinquent mortgage payments over time. Another advantage of Chapter 13 is that it allows individuals to reschedule debts and extend them over the life of the Chapter 13 plan. This can be extremely beneficial if you have tax debt that would not be discharged under Chapter 7. Finally, if your income is too high to be able to file a Chapter 7, we can help you with Chapter 13 with as minimal payments as possible. Call me today at (818)409-8911 and let us discuss how we can help you resolve your financial difficulties with as few monthly Chapter 13 payments as possible.
How Chapter 13 Bankruptcy Works
A Chapter 13 bankruptcy case begins by filing a petition with the bankruptcy court including all statements and schedules. Additionally, they have to file the Chapter 13 repayment plan. When an individual files a Chapter 13 petition, an impartial trustee is appointed to administer the case. The Chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.
The Chapter 13 Bankruptcy Plan
The plan will propose to the court how much monthly payments the debtor can make. Usually, we will propose a sufficient amount to protect assets you want to keep such as your home. Unsecured creditors will get the remainder if any of your disposable income. The plan can vary from three years to five years depending on your income level and your debts. We can tailor a plan that will address the bankruptcy court requirements with as few monthly payments as possible.
The Chapter 13 Bankruptcy Discharge
A Chapter 13 debtor is entitled to a discharge upon completion of all payments under the Chapter 13 plan. The discharge releases the debtor from all debts provided for by the plan. Unsecured debt is also discharged regardless of the amount actually paid to unsecured creditors. The discharge in a Chapter 13 case is somewhat broader than in a Chapter 7 case.