Chapter 13 bankruptcy protects a person from creditors while enabling him or her to pay off debts over time through an affordable payment plan. It is an effective solution for many consumers who do not qualify for Chapter 7 or who wish to keep their property in the process.
If you are burdened with debt and you are considering Chapter 13 as a solution, I can help you decide if it is in your best interest. As an attorney with more than 25 years of bankruptcy experience, I have helped many clients get relief from their debt through Chapter 13.
Chapter 13 can be effective in solving many problems. A filing can be used to help you:
- Keep your home: A Chapter 13 filing will immediately stop the foreclosure process, even if a foreclosure sale of your property is imminent. If you are behind on mortgage payments, you can pay off what you owe through a payment plan.
- Get rid of a second mortgage or HELOC: In some cases, Chapter 13 can be used to “strip” a second mortgage of line of credit on a property that has lost value. If this happens, the homeowner is no longer responsible for that loan, though he or she will be responsible for the first mortgage.
- Keep your business running: You can continue to operate a business under Chapter 13, with no income limits.
- Prevent repossession of a vehicle: Chapter 13 can help you keep a car, a truck or another type of vehicle.
- Retain other assets: Chapter 13 will enable you to keep the money in your checking account, your jewelry and other assets that would otherwise be liquidated in a Chapter 7.
- Pay off tax debt: Chapter 13 can be used to make arrangements with the IRS (or the state of California) to pay off back taxes.
Chapter 13 also comes with disadvantages that you should be aware of. These downsides include:
- A payment commitment: If you file Chapter 13, you will usually have to make a monthly payment toward your debts over a period of three to five years. The amount of the payment is based on your disposable income.
- A negative credit impact: A Chapter 13 will stay on your record for 10 years, though your credit score will generally suffer for a much shorter period of time.
Contact me for a free consultation with an Anaheim Chapter 13 bankruptcy lawyer. I can review your debts with you, explain your options and help you determine whether bankruptcy is right for you.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.