Los Angeles Chapter 13 Bankruptcy Lawyer
Some people in Los Angeles looking for a way out from under mounting debt seek bankruptcy protection under Chapter 13 of the Bankruptcy Code, which is a good debt-relief option for debtors with a regular income who want to protect certain assets, such as their home or car. Chapter 13 bankruptcy, sometimes called a “wage earner’s” bankruptcy plan, allows debtors to reorganize their debts and pay back creditors over a period of three to five years, rather than liquidating their assets to repay the debts they owe. If you have enough disposable income to repay all or a portion of your debt at 0% interest over the next three to five years, Chapter 13 bankruptcy may be the best debt-relief solution for you. Contact our knowledgeable Chapter 13 bankruptcy lawyers at ibankruptcyattorneys.com today to learn more about relieving debt through bankruptcy or to find out how to proceed with a Chapter 13 bankruptcy filing in Los Angeles.
Skilled Bankruptcy Attorneys in Los Angeles
If you have fallen behind on your mortgage payments or you are unable to pay your bills, you may be able to file a Chapter 13 bankruptcy petition with the bankruptcy court to begin the bankruptcy process. Initiating a Chapter 13 bankruptcy, filing your bankruptcy petition properly, knowing which assets are covered by the bankruptcy exemptions, and determining how much your monthly payments will be in a Chapter 13 bankruptcy can be complicated, and that is one of the main reasons we strongly recommend consulting an experienced attorney before proceeding with your bankruptcy case. When you choose ibankruptcyattorneys.com, our lawyers will take the time to carefully review your income, assets and debts and ensure that you understand your debt-relief options, which may include filing for bankruptcy relief under the Bankruptcy Code. It is our number one goal to help clients struggling under the weight of overwhelming debt find the right debt-relief solution for their individual situation. Contact our firm as soon as you can to schedule a free initial consultation with our proficient and professional Los Angeles bankruptcy attorneys.
What is Chapter 13 Bankruptcy?
Debtors who seek bankruptcy protection under Chapter 13 of the Bankruptcy Code typically repay a portion of their debt to creditors and have their remaining eligible debts discharged. To fully understand Chapter 13 bankruptcy, you must first have a firm grasp on the difference between secured debts, which are debts tied to a specific piece of property, and unsecured debts, which are not tied to any specific property. Some examples of secured debts include mortgage loans or auto loans and unsecured debts include medical bills, personal loans and credit card debt. Generally speaking, Chapter 13 bankruptcy may be a good option for debtors who:
Will Chapter 13 Bankruptcy Put a Stop to Creditor Harassment?
When you file a petition for Chapter 13 bankruptcy, you get the benefit of an automatic stay, a powerful tool that puts an immediate stop to any collection actions by creditors seeking payment from you, including harassing phone calls or letters and debt collection lawsuits. The automatic stay also protects you from repossession, foreclosure proceedings, wage garnishment and bank levies.
What Debts are Not Discharged in Chapter 13 Bankruptcy?
There are certain specific types of debt that are not dischargeable in bankruptcy, which means you will still be responsible for paying them after your Chapter 13 bankruptcy. These non-dischargeable debts include most student loan debts, child or spousal support debts, certain tax debts, and some types of personal injury or wrongful death debts.
How Does Chapter 13 Bankruptcy Work?
In Chapter 13 bankruptcy, the debtor proposes a debt repayment plan, which can be anywhere from 0% to 100% of their unpaid unsecured debts. Keep in mind that even if you end up paying 100% of your unsecured debt in your Chapter 13 bankruptcy, the outcome is generally much more favorable than attempting to repay your creditors without a Chapter 13 repayment plan, as you’ll pay 0% interest on the debts you repay. Although a Chapter 13 bankruptcy case lasts much longer than, say, a Chapter 7 case – typically three to five years of repayment, compared to a discharge in just a few months – Chapter 13 bankruptcy gives you the opportunity to retain certain assets that might otherwise be liquidated by the trustee in a Chapter 7 bankruptcy.
We recommend consulting a knowledgeable bankruptcy lawyer if you are considering a Chapter 13 bankruptcy in Los Angeles. A good attorney will have a clear understanding of California bankruptcy law and how to proceed with your case. Having a knowledgeable bankruptcy lawyer on your side is especially helpful if you are experiencing harassment or abuse by relentless creditors. Once you have filed a Chapter 13 bankruptcy petition, creditors are barred from pursuing collection actions against you and must instead make their claims through the bankruptcy court. During your Chapter 13 repayment plan, you will make regular payments to the bankruptcy trustee and the trustee will distribute the payments among your creditors in accordance with the plan. At the end of the repayment plan, whatever unsecured debts remain will be discharged, or eliminated, meaning you are no longer legally responsible for paying the debts.
Who Qualifies for Chapter 13 Bankruptcy?
If you think bankruptcy may be the right debt-relief solution for you, depending on your circumstances, you may begin by taking the bankruptcy means test, which determines which type of bankruptcy you are eligible for. If you pass the means test, meaning you do not have enough income to support a repayment plan or ensure that creditors receive sufficient payment, you are eligible to seek bankruptcy protection under Chapter 7. If you do have enough income to support a repayment plan, you will instead be required to file under Chapter 13. Keep in mind that only individuals and married couples with regular income can file Chapter 13 bankruptcy in Los Angeles, not corporations or partnerships. In order to qualify for a Chapter 13 bankruptcy filing in the state of California, you must owe less than $419,275 in unsecured debt and $1,257,850 in secured debt on the date you file the bankruptcy petition. You will also be required to show the court that you have enough income to make payments according to your proposed repayment plan.
What Property Will I Lose?
If you are considering filing a Chapter 13 bankruptcy, you are probably wondering whether you will lose your home or your car as a result of the bankruptcy. One of the main benefits of Chapter 13 bankruptcy is that you do not have to surrender any property to the bankruptcy trustee overseeing your case. In other words, you can hang onto your house or your car, as long as you can continue making the required payments. You do, however, have the option of surrendering certain property in your Chapter 13 bankruptcy if you are not able to make ongoing payments.
How Much Will I Have to Pay?
The purpose of a Chapter 13 bankruptcy filing is to restructure your debt and make it easier for you to repay your creditors, which is why Chapter 13 repayment plans are based in part on what you earn. When it comes to setting up your three- to five-year repayment plan, your bankruptcy trustee will look at your monthly income from the previous six months and deduct certain “allowable” living expenses for your mortgage, car loan payments, tax debts, and child and spousal support payments, which you will continue to pay during your repayment plan. Many of the figures used in the calculation of these allowable expenses are national and local standards set by the IRS. The amount of income remaining after your expenses are deducted is your “disposable income,” and this is the amount you can contribute to your repayment plan each month. If you miss any of your Chapter 13 payments, your bankruptcy case will be dismissed by the court.
How Will Bankruptcy Affect My Credit Score?
One of the main reasons people strapped with debt are worried about filing for bankruptcy is because they think it will destroy their credit score. A Chapter 13 bankruptcy case will have a negative impact on your credit rating, that is true. But so will missed payments, repossessions, lawsuits and defaults. In fact, if you are considering bankruptcy, you have likely struggled with debt for some time now, and your credit score has probably already suffered as a result. In that case, filing for bankruptcy likely will not lower your credit score that much more.
As far as how long the bankruptcy will affect your credit score, a Chapter 13 filing will fall off after seven years. One of the most important things to note about a Chapter 13 bankruptcy case is that you may be prohibited from taking on any new credit during your three- or five-year repayment, which can pose a significant problem if, for instance, your car lease ends during this time and you have to buy a new car. If you do find yourself in a position where you have to take on new credit during your repayment period, your attorney can assist you in finding a lender willing to work with a Chapter 13 debtor.
Chapter 7 vs. Chapter 13 Bankruptcy
Chapter 13 and Chapter 7 bankruptcy are the two most popular forms of personal bankruptcy in the United States, and there are some big differences between the two options. The main distinction between Chapter 7 and Chapter 13 bankruptcy is this: While the former requires a liquidation of some of your assets in order to repay your debts, the latter allows you to restructure your debts and repay a small portion before receiving a discharge. Regardless of whether you choose Chapter 7 or Chapter 13 bankruptcy, every bankruptcy case is unique and the amount of debt you can have discharged in bankruptcy will vary based on your specific situation and the negotiating skills of your bankruptcy lawyer.
How a Skilled Bankruptcy Attorney Can Help
Many Americans consider bankruptcy a last resort for desperate people drowning in debt. However, many debtors have learned that bankruptcy is really a viable option for regaining control of their financial life. That being said, navigating the bankruptcy process can be complicated and confusing, especially when it comes to protecting your assets and creating a repayment plan that satisfies all of the necessary requirements and leads to a satisfactory discharge. Our bankruptcy lawyers at ibankruptcyattorneys.com are experienced in all matters related to Chapter 13 bankruptcy in Los Angeles and we can assist you in every aspect of your case. We know how stressful it can be dealing with ruthless creditors who will use any means necessary to get you to pay, and we can ensure that your rights are protected throughout the bankruptcy process. Our legal team is committed to helping our clients get the most out of their Chapter 13 bankruptcy and we will do everything we can to find a creative and realistic solution to your financial difficulties.
Consult Our Chapter 13 Bankruptcy Lawyers Today
Not everyone thinking about filing for bankruptcy is willing to liquidate their assets and start from scratch. If you are struggling with overwhelming debt but you have a steady income you can put towards paying back your creditors over time, you may benefit from Chapter 13 bankruptcy. To find out if filing for Chapter 13 bankruptcy is the right move for you, contact our bankruptcy lawyers at ibankruptcyattorneys.com as soon as possible. The moment you file a petition for bankruptcy, the automatic stay goes into effect, which means you can put a stop to creditor harassment and protect your assets now. Call us today to find out how we can help you achieve financial freedom. Our qualified attorneys are prepared to answer all of your questions about Chapter 13 bankruptcy and will stand by your side throughout the bankruptcy process.