Resolve Law Firm

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Downey, CA 90241

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Resolve Law Firm

Chapter 13

What Is Chapter 13 Bankruptcy?

Think of Chapter 13 bankruptcy as a repayment plan that lets you catch up on payments you’ve not been able to make due to job loss, illness, or other unexpected life events. In most cases, you’ll only pay back a portion of the outstanding debt to creditors. This type of bankruptcy is available only to individuals and sole proprietorships (other business entities are not eligible).

How Does A Chapter 13 Payment Plan Work?

Typically, with Chapter 13 bankruptcy in Los Angeles County, a 36-to-60-month payment plan is proposed to the court to repay your debt. A 36-month plan is proposed if your gross income is below the median income for your state. If your gross income is above the median income for your state, then a 60-month payment plan will be proposed.

Your Chapter 13 bankruptcy attorney will propose repayment terms to the court, which will include how much of the debt you can pay and how long it will take you to do so.

Your first payment is due 30 days after your bankruptcy case is approved by the court and filed. You will make a single payment to a trustee who will then distribute payments to your creditors.

How Is Your Monthly Payment Calculated?

The monthly payment amount that will be required for your Chapter 13 bankruptcy plan is based on the largest amount calculated from the 3 formulas below:

  1. Disposable income: Generally, the monthly payment for a Chapter 13 bankruptcy is calculated based on your income minus national standards deductions for items such as transportation, housing, food, utilities, etc. and secured debt payments for your home mortgage and car payments.
  2. Priority debts: Your Chapter 13 bankruptcy plan must provide for the repayment in full of priority debts such as federal and state income taxes, alimony, and child support.
  3. Best interest of creditors: The plan must at least give unsecured creditors an amount equal to what they would have received from a Chapter 7 bankruptcy liquidation in Los Angeles county.

What Happens At The End Of The Repayment Plan?

Once you complete your repayment plan, then the remaining dischargeable debt that was not paid back during the term of your plan will be discharged. This means that you will no longer be personally liable for the payment on these debts.

What Are The Benefits Of A Chapter 13 Bankruptcy?

  • You will be able to keep your home and automobile, possibility with lower payments and interest rates.
  • Attorney fees are paid through a payment plan and not upfront.
  • Wage garnishments and collection calls will stop.
  • Tax debts, alimony, and/or child support can be paid through the plan.

What Are The Disadvantages Of A Chapter 13 Bankruptcy?

  • Missing a payment could cause your case to be dismissed and creditors can resume collection.
  • All plan payments must be completed for any debts to be discharged.
  • Student loans, some taxes, alimony, and child support will not be eliminated.
  • You may not incur new debt, sell, or transfer property without court approval.
  • A bankruptcy can remain on your credit for up to 10 years.

How Can A Chapter 13 Bankruptcy Attorney Help Me?

Filing for Chapter 13 may sound simple, but there are many complexities within the process. That’s why you need an experienced chapter 13 bankruptcy attorney in Downey, CA by your side. A bankruptcy attorney in Los Angeles County can offer:

  • Valuable legal advice and answers to your questions
  • Representation in the courtroom and in hearings
  • Complete confidentiality throughout the entire process
  • Preparation of all paperwork
  • Knowledge of local laws

A chapter 13 bankruptcy attorney in Downey, CA will know important deadlines that must be observed. If you miss a date or an appearance, then your entire case can be dismissed.

For more information on Filing For Chapter 13 Bankruptcy, a free initial consultation with a Downey, CA bankruptcy attorney is your next best step. Get the information and legal answers you need by calling (818) 900-5794 today.

Le’Roy Roberson

Call For Free Initial Consultation
(818) 900-5794

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