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Santa Clarita Chapter 13 Bankruptcy Attorneys

Chapter 13 Bankruptcy Lawyers Serving SCV

Chapter 13 is a reorganization of debt, allowing individuals (not corporations, LLCs, or other business entities) to repay all or a portion of their debts through a court-approved plan while protecting their assets. The concept is similar to debt consolidation, but unlike most debt consolidation programs, it permits debtors to pay all of their secured debt (e.g., mortgages and car loans) over time, and to pay only a fraction of their unsecured debt (often 10% or less), without accruing interest.

Under a typical plan, you make monthly payments to a court-appointed bankruptcy trustee for 36 to 60 months. The amount of your monthly payment is determined by the amount and type of debt, your income, your reasonable expenses, and your assets. Once a Chapter 13 repayment plan is confirmed, a trustee will disburse the plan payments previously made to the creditors in the amounts specified in the plan.

Is Chapter 13 Right for You?

If you file Chapter 13, the Court will require you to use your income to repay some or all of your debt. You will have to prove that you can afford to meet the repayment obligations that you propose. Don't let this scare you; a Chapter 13 repayment plan is essentially based on how much you can afford to pay, based on your income minus your legitimate non-excessive monthly living expenses. If you complete your 3 or 5 year payment plan, the Court will discharge the rest of your eligible unsecured debt.

Stop Foreclosure on Your Home Immediately

Chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing Chapter 13, debtors are allowed to repay their overdue / past due payments in monthly installments over 3 to 5 years. Chapter 13 may also allow a homeowner to "avoid" (set aside) liens that are nominally secured by the house but are not supported by equity.

Save Your Car from Repossession

If you have fallen behind on your car payments, Chapter 13 may allow you to save your car from being repossessed by reinstating your original loan agreement and making up missed payments over time. Under certain circumstances, our Santa Clarita bankruptcy lawyers may even be able to recover your vehicle after repossession. In some cases, you may be able to lower your car payments and pay back a figure based on the current market value of the car, as opposed to what you owe on the loan.

Protect Your Co-Signers

Did a family member or friend co-sign on a loan for you that you are now having trouble paying for? Are they receiving harassing creditor calls and threats from creditors? Filing Chapter 13 will protect your co-signers from those harassing collection calls. Chapter 13 allows you to pay the remaining balance on those loans over 3 to 5 years and in some instances with no interest. Call one of our Santa Clarita bankruptcy attorneys to find out how.

Questions & Answers

What is "regular income?"

"Regular income" is income from wages, salary, self-employment, commissions, pension payments, Social Security benefits, disability or workers' compensation benefits, unemployment benefits, strike benefits, public benefits (e.g. welfare payments), royalties, rents, or child support or alimony that you receive on a predictable basis.

What is "disposable income?"

"Disposable income" is the money left over after you pay for basic living expenses, such as food, mortgage or rent, utilities, transportation, insurance, and certain installment payments on secured debt. These basic needs are taken into consideration in formulating a feasible Chapter 13 proposal.

How much will my monthly payment be?

The monthly plan payment is based on the amount you can reasonably afford to pay. In some circumstances, your payments will be enough to pay off all your creditors. Some debts need not be paid in full, and (under the right circumstances) can be discharged without payment.

If I miss a scheduled payment under my Chapter 13 plan, can a creditor begin collection activities?

If you miss a scheduled payment, the Chapter 13 trustee can file a motion to dismiss your case or convert it to Chapter 7. Unless you can establish a valid reason for the missed payment(s) (such as job layoff or an unbudgeted medical expense) and propose how you will make up the missed payments, the case may be dismissed or converted toChapter 7.

If you want more information about Chapter 13 bankruptcy, call us today. Our Santa Clarita bankruptcy lawyers can help you to work through your case.