Chapter 13 Bankruptcy

With Chapter 13 Bankruptcy you can reorganize and pay your debts over time, usually a 3 to 5 year period.   In many cases,  you’ll end up paying less than 100% of what is owed.    Chapter 13 Bankruptcy works for people who have consistent income such as regular employment. You must also have disposable income or money left over every month after your monthly living expenses.   Let’s talk about Chapter 13 Bankruptcy:

Chapter 13 Bankruptcy is also called a “wage earners” bankruptcy because it is usually works best for folks with regular and consistent income from a job, for example. Oakland and Bay Area residents who file for Chapter 13 bankruptcy typically do so for the similar reasons as they would for Chapter 7 bankruptcy…because they are overwhelmed with debt and can’t pay their existing bills.  However, Chapter 13 bankruptcy is more appropriate for people who own assets such as a home or car that they would like to keep.

People who file Chapter 13 bankruptcy are typically those who:

  • have disposable income that will pay a portion of debts over a 3 to 5 year period.
  • own a home or car that they would like to keep and continue to make payments on
  • want to pay off past due balances on mortgages or car loans without worrying about losing those asset.
  • have debts that are not dischargeable such as student loans but want have a way to manage the overwhelming debt over a 3-5 year period

The great feature of Chapter 13 Bankruptcy is that it allows you to keep all your property and it gives you the protection of the United States bankruptcy laws to stop creditor harassment, increased late fess and interest and a consolidated set payment for the duration of the 3 to 5 year Chapter 13 plan period.

In order to receive a bankruptcy discharge, you must first file a bankruptcy petition, then appear a the meeting of creditors hearing.  This occurs usually about a month or so after you file the petition.  At the meeting of creditors, you are asked basic questions about your assets and liabilities.  The meeting is very short, quick and painless. After the meeting you will typically receive your discharge shortly thereafter and start making payments on your Chapter 13 plan to the trustee.  This is typically how the process works.

The reality is that Chapter 13 bankruptcy does not have to be a scary experience. Thousands of people file bankruptcy each year in California. They are able to make it through the process.  You can make it through, too.

Do you have questions about filing bankruptcy? We can answer your bankruptcy questions.  Give us a call today at 510-343-6299.