Chapter 13 Bankruptcy

File with a Santa Clarita Bankruptcy Lawyer

When people are considering filing for bankruptcy, many are not even aware that there is more than one kind of bankruptcy to “choose from.” Depending on your financial situation, as well as the size and value of your estate, you might end up qualifying for Chapter 13 bankruptcy. This form of bankruptcy does not flat-out liquidate debts owed to creditors, but instead involves a structured repayment plan that can last for several years.

Before you make any decisions, consult with a Santa Clarita bankruptcy attorney from The Werner Law Firm first. Call 888.630.9902 today.

Benefits of Chapter 13 Bankruptcy

The first thing you might think when you hear that Chapter 13 bankruptcy involves a repayment plan instead of eliminating all debts immediately is that it is a worse form of bankruptcy. This is not true. Chapter 13 is unique from Chapter 7 bankruptcy – which traditionally will remove all debts – and, therefore, has its own unique set of pros and cons.

Some advantages to choosing Chapter 13 over Chapter 7 include:

  • Stalling home foreclosures
  • Lessening impact on credit scores
  • Addressing student loans
  • Stopping interest from building on tax debt
  • Keeping non-exempt property

It is important to realize that while Chapter 13 does not eliminate all debt, it may drastically reduce some debt. This is particularly common for credit card debt. For example, you might owe $20,000 in credit card debt but your Chapter 13 restructuring only asks you to pay $200 a month for three years. Ultimately, you would pay back just $7,200 but the entire $20,000 debt would be discharged.

Requirements for Chapter 13 Filings

The bank and your creditors are not responsible for your debt. It will be up to you to propose a repayment plan that works for everyone. This is where professional legal guidance plays a big part in success. Your bankruptcy attorney will be able to analyze your income, debts, and estate value, and craft a repayment plan that not only helps you relieve financial worries but also satisfies your creditors. After all, nothing will get done if they turn down your offer and cite it as unreasonable.

Three main requirements for Chapter 13 bankruptcy plans include:

  1. You must present a reasonable argument as to how you can and will stick to your restructured strategy.
  2. You must pay unsecured creditors an amount that is at least as equal as what they would have gotten if Chapter 7 was filed instead.
  3. You must put all disposable income into your payment plan – you will be living only with necessities for the next three to five years.

Contact Our Firm Today and Find Peace of Mind

The shadow of overwhelming debt can be a real burden on anyone. You might be finding it difficult to enjoy day to day life knowing that creditors are waiting for your last penny earned. At The Werner Law Firm, we have been serving Southern Californians since 1975, and we know all about the pressures you are feeling and how they can be alleviated. We are honored to say that many of our past clients have provided us with appreciative testimonials for those in need of legal counsel to review and gain a better understanding of how we can help them.

Let our Santa Clarita bankruptcy attorneys guide you through your Chapter 13 bankruptcy filing. Contact us or fill out a free online case evaluation form today.