Understanding Chapter 13 Bankruptcy

If you have a regular income and owe less than $360,475 in unsecured debts and $1,081,400 in secured debts, you may be eligible for Chapter 13 bankruptcy. This type of bankruptcy allows you to repay some or all of your debts at a reduced interest rate while still retaining your personal property. Filing bankruptcy under Chapter 13 stops all foreclosures, repossessions and creditor harassment, and it completely erases most of your debt within a period of three to five years. In many cases, you will only be required to repay a small percentage of your debt under this chapter of the bankruptcy code. In addition, many people who are ineligible for bankruptcy under Chapter 7 may still file under Chapter 13. Our Chapter 13 Los Angeles bankruptcy lawyers specialize in Chapter 13 California bankruptcies, and we can help make your California bankruptcy filing as effortless as possible.

Chapter 13 California bankruptcy has many advantages over Chapter 7 bankruptcy. It allows you to keep your home and pay off any past-due mortgage bills over a period of several years, even if your mortgage company has already begun the foreclosure process. It also makes it possible for you to recover vehicles that have been repossessed and pay for them more slowly as well, often at fair market value rather than the actual amount owed on them. Properties that would be liquidated under Chapter 7 bankruptcy can be kept under Chapter 13 bankruptcy, and many debts that can not be forgiven under Chapter 7 can be forgiven under Chapter 13. Additionally, this type of bankruptcy filing protects co-signers from being pursued by creditors, and it only stays on your credit report for seven years as opposed to 10 years with Chapter 7.

Chapter 13 bankruptcy makes it easy to repay debts that might otherwise haunt you forever. It consolidates all of your debts into one monthly payment, which is then paid to a Chapter 13 California trustee. The trustee makes all the payments to your creditors. As long as you continue to make your bankruptcy payments, you won't have to deal with your creditors for the duration of your bankruptcy terms. They are prohibited from taking legal action against you, garnishing your wages or harassing you in any way. Your creditors can not refuse your payment plan but must either object to it prior to confirmation by the courts or accept it. This arrangement does require some commitment and planning on your part, but our Chapter 13 Los Angeles lawyers will help you make a realistic budget so that you can make your Chapter 13 bankruptcy a success.

One disadvantage of filing bankruptcy under Chapter 13 is that is does cost more in filing and administrative fees than Chapter 7 bankruptcy filing. However, these fees can be spread out over as long as six months, so the upfront costs are actually less for Chapter 13 bankruptcy than for Chapter 7. Chapter 13 also requires quite a bit of paperwork, including a detailed list of your assets and liabilities, documentation of your income and expenses, a record of all debts and leases, and an inventory of your properties. This paperwork can be complex and confusing. Fortunately, our Chapter 13 Los Angeles lawyers are experienced in all Chapter 13 California procedures, so we can help you fill out all the paperwork and comply with all the requirements of your bankruptcy.

If you are in serious financial trouble, contact one of our bankruptcy lawyers today. You will be surprised at how easy and painless bankruptcy filing can be with our help.

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