Riverside Chapter 13 Bankruptcy Attorneys

Repay Your Debts Over Time

Sometimes, even the most thoughtful financial planning is no match for the unpredictability of life. When a disaster strikes, it can feel impossible to recover financially. Filing for Chapter 13 bankruptcy allows you to alleviate some of the pressure your debt is instilling by allowing you to produce a payment plan you can structure to suit your needs and protect your assets.

Call one of our attorneys for help protecting your property and restoring financial stability: (951) 784-1678.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a filing plan for individuals to settle outstanding debt while protecting their assets. Through Chapter 13, debtors construct a three- to five-year repayment plan that they maintain through monthly payments to their bankruptcy trustee who then distributes the payments to the creditors. This effectively blocks contact between the debtor and the creditor, with the trustee being the acting liaison during the repayment period.

Chapter 13 is an option for those who are disqualified from Chapter 7 for having either too high of an income or enough money to pay for all basic expenses in addition to some debt. The key differentiators between Chapter 13 and Chapter 7 are the length of the repayment process, debts you can discharge, and the ability to preserve your assets.

Chapter 13 bankruptcy uniquely allows:

• For debt to be repaid in monthly installments over the course of three to five years
• To discharge debts incurred by:
  • Divorce proceedings
  • Property settlements
  • Debts to pay non-dischargeable taxes
  • Debts for malicious injury to property

Chapter 13 offers debt relief according to terms you author. You can alleviate your debt without sacrificing your assets or your agency.

Those struggling to repay debt should contact The Turoci Bankruptcy Firm for professional guidance.

Who Qualifies for Chapter 13 Bankruptcy?

Chapter 13 upholds stricter guidelines than other bankruptcy filing options. To qualify, the debtor must:

• Have less than $394,725 in unsecured debt, including credit card payments and other bills
• Have less than $1,184,200 in secured debt, or debt that is backed by collateral
• Not have had a previous petition for bankruptcy dismissed within the past 180 days due to failure to appear in court or comply with orders
• Prove that they filed federal and state income taxes the four years preceding their petition
• Attend an approved credit counselling course before filing the bankruptcy petition and provide certificate of completion

Individuals who adhere to the guidelines above may be eligible. Businesses are not eligible to file for Chapter 13 bankruptcy.

How Do Chapter 13 Payment Plans Work?

Chapter 13 monthly payment plans are structured according a variety of factors. Your monthly payments will be made to your bankruptcy trustee, who will then pay off your creditors.

Factors that can affect how your payment plans are structured:

• Your disposable income determines how much your monthly payments are.
• Your payment plan length will depend on your income level. If your monthly income is greater than the median for your state's household size, your plan will be 5 years. If it is less, your plan will be 3 years.
• You will need to account for all of your debts, including priority debts, administrative fees, and secured debts if you want to keep your car or home.

Once you make all of the payments on your plan, the remainder of the balance can be discharged.

What Happens If I Cannot Afford My Plan Payments?

An individual's financial situation can change during the course of 3 to 5 years, such as losing a job or a decrease in income.

If you find yourself unable to keep up with your Chapter 13 repayment plan due to reduced income, there are several options:

• Request a plan modification: You may be able to request a plan modification with the court.
• Hardship discharge: If you have no way of paying back a debt due to hardship, such as a debilitating illness, you can request that the court discharge these debts.
• Convert to Chapter 7: It may be possible to convert your case to a Chapter 7, but you may lose nonexempt property.

A bankruptcy attorney can advise you on what steps to take if you are facing difficulty keeping up with your plan.

What Are the Benefits of Chapter 13 Bankruptcy?

A debtor’s benefits from Chapter 13 bankruptcy extend beyond resolving their financial hardships. After filing, the debtor is relieved of debt collection calls and can no longer be contacted by creditors regarding the debt being settled through their repayment plan. Additionally, a debtor benefits by maintaining ownership of their assets, unlike in a Chapter 7 filing where belongings are liquidated in order to repay debt. Debtors can gradually repay debt and return to a new normal.

Keep your property and your independence. Contact our Riverside Chapter 13 bankruptcy attorneys to help you revitalize your financial situation.