Rancho Cordova, California Chapter 13 Bankruptcy Attorney
Living in California in today’s economy can be challenging. For many people, making ends meet seems like an insurmountable task. People every day see themselves trapped under a heavy financial burden, creating a sense of desperation and hopelessness. However, debt should not be the end of the road for you. Some alternatives might give you a new financial start and the possibility to rebuild after experiencing economic turmoil.
While the word “bankruptcy” might seem daunting, filing for Chapter 13 bankruptcy could be the key to improving your financial situation. Proudly serving the Rancho Cordova area, our Chapter 13 lawyers here at The Bankruptcy Group can help you explore whether filing is the right choice for you. For a free consultation about Chapter 13 with our Rancho Cordova bankruptcy attorneys, contact us online, or call (800) 920-5351 today.
What is Chapter 13 Bankruptcy in California?
The phrase “bankruptcy” tends to have negative connotations among many people. However, the truth of the matter is that bankruptcy creates the opportunity for a new financial start for those who lived with overwhelming financial difficulty. Chapter 13, which is named after Chapter 13 of the United States Bankruptcy Code, can help debtors pay back their debt and regain control of their finances, potentially even stopping home foreclosure. However, there are specific criteria that must be met by to qualify for Chapter 13 and complete the process successfully.
Chapter 13 bankruptcy is also known as a “wage earner’s plan” or “reorganization plan.” This type of bankruptcy allows a debtor to develop and create a repayment plan with a set goal to repay all or part of their debt. The proposed repayment plan usually lasts from three to five years, during which the debtor must make periodic payments. Failure to make these payments may result in dismissal of the case, or conversion to a Chapter 7 bankruptcy. Some of the requirements to be eligible for a Chapter 13 bankruptcy include, but are not limited to, the following:
- The petitioner must be an individual (including sole proprietors) – not a corporation or limited liability company (LLC).
- The petitioner must have regular income.
- The petitioner must have sufficient disposable income for the reorganization plan.
- The petitioner must not have more than $394,725 in unsecured debt, and not more than $1,184,200 in secured debt.
To reiterate, a Chapter 13 bankruptcy can take from three to five years to complete. The duration of the repayment plan will depend on specific criteria. For instance, if a debtor’s monthly income is less than the California’s median, then the repayment plan’s duration will be three years. On the other hand, if the debtor’s monthly income is more than the California median, the repayment plan will generally have a duration of five years.
To complete a Chapter 13 bankruptcy filing, petitioners must prepare a set of required bankruptcy documents detailing all debts, expenses, assets, and sources of income. For instance, debtors must disclose a detailed list of all the creditors to whom they owe money. Additionally, petitioners must reveal their monthly income and living expenses.
While these requirements are not the only considerations to keep in mind, they illustrate the level of precision and detail that debtors must prepare for to ensure a smooth filing. Our Rancho Cordova Chapter 13 lawyers can help you throughout the entire bankruptcy process from start to finish. Keep in mind that failing to provide accurate and complete information, or willfully withholding essential information, can lead to severe consequences – including the dismissal of your bankruptcy case.
What Are the Benefits of Filing Chapter 13?
Chapter 13 can provide many benefits to those who qualify. A few examples are highlighted below.
Reduce or Erase Debts
The central feature of Chapter 13 is its reorganization plan, which requires debtors to fully or partially repay specific debts. However, once the plan has been completed, remaining debts may be discharged, or wiped out. Examples of dischargeable debt in Chapter 13 include credit card bills, utility bills, business debt, personal loan debt, and medical bills.
Stop Foreclosure on Your Home
This is arguably the most important benefit Chapter 13 bankruptcy can provide to a homeowner who is in jeopardy of losing his or her house. However, in order to keep the property, you must follow your reorganization plan and make all payments on time, including catching up with missed payments.
Rebuild Better Credit
Generally, Chapter 13 will remain on your credit report for seven years, which is three years less than Chapter 7 bankruptcy. With your debts under control, you will have a better chance to start rebuilding your credit, a process you can begin almost immediately.
Rancho Cordova Bankruptcy Attorneys Can Help You File Chapter 13
Our knowledgeable and experienced bankruptcy attorneys know all the intricacies and nuances of bankruptcy law. Our strategic and action-driven approach can put you in a better position to get qualified to receive financial relief through a Chapter 13 bankruptcy. To learn more about our services and how we can help you with your bankruptcy petition, call The Bankruptcy Group today at (800) 920-5351. You can also contact us online.