California Bankruptcy Attorneys - Understanding Chapter 13 Bankruptcy
A California Chapter 13 bankruptcy filing provides an unmatched opportunity to be free from debt, while still maintaining ownership of your personal belongs and assets. While taking advantage of this opportunity takes planning, discipline, and foresight, with the right California Bankruptcy Attorney representing your case, you can feel confident that you fully understand the Chapter 13 process and how best to take advantage of the protections it provides. Just as in a Chapter 7 bankruptcy case, there are certain qualifications that must be met in order to file for Chapter 13 bankruptcy protection. It pays to be prepared – although no two repayment plans under Chapter 13 bankruptcy are exactly alike, you should be certain that any repayment plan you submit to the court is one that you will be able to comply with for the long run.
Qualifications for Filing for California Chapter 13 Bankruptcy
In order to qualify for Chapter 13 bankruptcy in California, you must meet the following conditions:
1. You have steady employment that will allow you to repay your debts under the proposed repayment plan for the next 3-5 years.
2. You do not owe more than $1,010,630 in secured debt at the time of the bankruptcy filing. Secured debt is any debt in which your creditors have the right to repossess an item if payments are not made. For example, your car note is a secured debt, a personal loan with jewelry as collateral is a secured debt, finance terms on furniture, or other expensive items are also secured debt.
3. You do not owe more than $336,900 in unsecured debt at the time of your bankruptcy filing. Unsecured debt is any debt in which there is no collateral or security. Credit cards, personal loans, and lines of credit are often unsecured debt.
If you meet these conditions, and have attended an approved credit counseling class prior to your bankruptcy filing, you will most likely qualify for a Chapter 13 bankruptcy. By filing for Chapter 13 bankruptcy versus a Chapter 7 bankruptcy, you can take advantage of additional benefits such as loan modifications, also known as “cram downs”.
A loan modification by the bankruptcy judge can significantly reduce the amount of debt you owe. For instance, the bankruptcy judge may reduce the balance owed on a vehicle to the actual current value, versus the amount you currently owe. This can be a savings of thousands, depending upon the vehicle, and can be a tremendous help when you owe more than the car is worth. Additionally, if you’ve taken out a second or third mortgage on your home, the bankruptcy judge may be able to eliminate these loans, depending upon the current value of your house. Chapter 13 bankruptcy also provides additional protections to individuals who may be co-debtors on your loans, preventing your creditors from turning their collection attempts to joint account holders and/or cosigners.
The benefits of Chapter 13 bankruptcy are numerous, but it’s essential to have solid legal advice during the process. By retaining the services of a reputable California Bankruptcy Attorney, you can be certain that your Chapter 13 bankruptcy filing is complete and thorough, and that your intended repayment plan is both reasonable and viable for the long term. If you are considering filing for Chapter 13 bankruptcy and would like more information, contact our office. Fill out our free, online California Bankruptcy case evaluation that will allow you to make an informed choice when it comes to Chapter 13 bankruptcy and your financial freedom.