Learning all the different ins and outs of bankruptcy can be difficult and confusing. With different chapters that serve different purposes, it can be tough to tell which chapter of bankruptcy is right for you. In this blog, we are going to discuss bankruptcy under Chapter 13, and take a look at exactly who it works for and what it does.
What Is Chapter 13?
Chapter 13 bankruptcies are often referred to as “restructuring bankruptcies.” When individuals apply for this chapter, they do so as a way of restructuring their current payment plan while still being able to maintain possession of their property. This allows for their debts to become more affordable over a longer period of time, to make sure you can get out of debt and stay out of debt.
Who Can Qualify?
In order to be eligible for Chapter 13, you need to have a steady income, as well as a certain amount of debt that does not exceed the maximum limit. The maximum amount of unsecured debts must be less than $394,725 and the maximum secured debts much not exceed $1,184,200. These amounts are adjusted periodically to reflect changes in the consumer price index, but not by much.
Adversely, if you don’t have enough debt, or make too much income, you may not qualify for bankruptcy at all.
You won’t be able to qualify for Chapter 13, or any chapter for that matter, if you fail to appear in court during the preceding 180 days of a prior bankruptcy petition. You must also have received credit counseling from an approved credit counseling agency in either an individual or group briefing within 180 days before filing.
If you are unsure if you qualify for bankruptcy under Chapter 13, get in touch with one of our experienced attorneys today online or give us a call at (818) 805-1758!
Benefits of Chapter 13
There are many benefits to Chapter 13 bankruptcies that some other chapters simply don’t have. Here are just a few:
Keep your property - As opposed to Chater 7, where property with equity or value that exceeds protection limits could be liquidated, Chapter 13 allows you to keep all of your property. This includes your car, furniture, home, and various other personal properties.
Stops foreclosure - Chapter 13 allows you to repay your mortgage arrears through a new and more affordable payment plan so you can resolve your debts and keep your home.
Protection from creditors - Once bankruptcy is filed, all creditors and debt collectors are immediately halted during the bankruptcy process, finally giving you the breathing room to focus on getting on your feet.
Affordable payments - Chapter 13 allows you to set a monthly payment plan that finally works in your favor as long as the court approves it. All of your debts may not even need to be repaid, as your remaining debt may even be forgiven once you’ve completed your payment plan.
Chapter 13 bankruptcies give you the ability to get back on your feet without forcing you to liquidate your assets and lose everything that you have worked so hard to gain. As an affordable alternative to going into financial ruin, bankruptcy can help you take control of your finances again.
Contact Our California Bankruptcy Lawyers Today!
Navigating the complexities of bankruptcy can difficult and frustrating on your own. Having a team of experienced attorneys that deal with bankruptcy on a daily basis can make the difference for your success. We fully understand your situation and we are prepared to help you through it any way we can.If you think that Chapter 13 bankruptcy is the right choice for you, get in touch with us today online or give a call at (818) 805-1758 to schedule a consultation!