Chapter 13 Bankruptcy Attorney in Valencia
What Is Chapter 13 Bankruptcy?
Chapter 13 is one of a variety of bankruptcy options available to individuals struggling with overwhelming debt in the United States. It is primarily focused on individuals who are seeking a way to rid themselves of their debt without having to part from the valuable assets that they possess. As opposed to Chapter 7, which involves asset liquidation in order to assist in the repayment of creditors, Chapter 13 enrolls the individual in a creditor payment plan, which allows them to pay towards their debts on a monthly basis.
The person continues to pay their creditors in installments (typically for a period lasting three to five years), until their debts have been fully satisfied, at which point they are released from having the majority, or all, of their financial liabilities. By actually paying their creditors the money that they are owed, they are able to avoid the loss of any assets that they would be reluctant to part with.
Benefits of Filing For Chapter 13
Filing for Chapter 13 bankruptcy comes with many benefits. Below are some of the common benefits:
- Triggers an automatic stay, which means that creditors are required to stop any efforts to collect from you.
- Stops foreclosure proceedings.
- Stops repossession.
- Debts are discharged within 3 - 5 years.
- Ability to lower payments on secured debts.
For more about the benefits of filing, reach out to RJB Law Offices today: (888) 256-8581.
Do I Qualify For Chapter 13 Bankruptcy?
Not everyone is eligible for Chapter 13. In order to qualify for Chapter 13, you must have these four things:
- Your income tax filings must be current.
- You have sufficient disposable income.
- Your debts can’t be too high.
- You cannot be file because you own a business that is in debt.
Before filing for Chapter 13 bankruptcy, you must complete specific documentation and prove the items listed above. Regarding your income tax, you must submit proof of filing your federal and state income tax returns for the last four years. If you do not provide your returns or transcripts of the returns, your case will be dismissed.
Start a free consultation with a Chapter 13 lawyer in Santa Clarita. Call (888) 256-8581 today.
Do I Have Sufficient Disposable Income?
In order for the court to consider your case, you must prove that you have sufficient disposable income. You must show the court that you have enough income left behind to meet your repayment obligations (per a 3-5 year repayment plan) after subtracting specific expenses and required payments on secured debts (like a car loan or mortgage).
If your secured and unsecured debt exceeds a certain amount, it will be considered “too high” and you will not be eligible for Chapter 13 bankruptcy. The limit changes every three years. As of April 2019, the debt limitations are:
- $1,257,850 of secured debt, and
- $419,275 of unsecured debt
If your debt exceeds this, you must file an individual Chapter 11 bankruptcy case instead.
Businesses and Filing for Chapter 13
A business owner cannot file for Chapter 13 in the name of the business. Chapter 11 bankruptcy is for businesses that need help reorganizing their debts. There may be a few exceptions, however, you may have to speak with an experienced bankruptcy lawyer to determine this. Note that you can file for Chapter 13 as an individual if you are a business owner. Learn more during a free consultation with an attorney at RJB Law Office.
What Happens When My Chapter 13 is Paid Off?
When your Chapter 13 is paid off, you will receive a discharge order from the bankruptcy court that will wipe out the remaining balance of your debt and creditors can no longer contact you to collect on your debts. Most nonpriority, unsecured debt will be discharged, however, student loan balances are an exception, and you will be responsible for those.
Some examples of debts that are covered in Chapter 13, but not Chapter 7:
- Debts incurred to pay nondischargeable taxes -- for example, if you paid taxes via credit card
- Obligation to your former spouse for other debts assigned to you during a divorce
- Fines or penalties owed to the city, county, state
- Stripped or crammed-down liens
- Debt from a previous bankruptcy case -- for example if you tried to file for Chapter 7, but were not eligible or if you waived your discharge
Call a Santa Clarita Chapter 13 Bankruptcy Lawyer
The legal team at RJB Law Offices has successfully guided thousands of individuals through their bankruptcy proceedings, including those filing for Chapter 13. We utilize our considerable knowledge and experience in bankruptcy law in guiding each client through the process, so that they can enjoy a strong chance of reaching a successful conclusion to their case. If you are considering Chapter 13 bankruptcy, contact our offices as soon as possible, and a Valencia bankruptcy lawyer will provide you with the information you need to come to a decision in your case.
It is not recommended that one try and navigate through the bankruptcy process on one's own. There are many nuances and legal details involved in filing for bankruptcy, and a person unfamiliar with these can potentially get themselves into deeper financial trouble. Retaining the services of an attorney familiar with bankruptcy law can ensure that one avoids these pitfalls, and maximizes one's chances of obtaining a debt free life.
Contact a Valencia Chapter 13 Bankruptcy Lawyer for information on Chapter 13 Bankruptcy and how it may be able to help you in your financial situation.
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