Chapter 13 Bankruptcy is a reorganization of your debt while paying back your outstanding debt to creditors. Chapter 13 is Bankruptcy intended for an individual or family with a regular income. The first and main requirement to file for Chapter 13 bankruptcy is that any individual who files must have a source of income to repay. Even if you are self employed or operate an unincorporated business you will qualify. Chapter 13 allows you to keep all of your property, and to set up an affordable payment plan with the Bankruptcy Trustee. The payment plan is typically 3-5 years. At the end of the payment plan, most debts are considered paid in full.
Secured debts such as home mortgages and car notes must be less than $1,081,400.00. Unsecured debt such as medical bills and credit cards must be under $360,475.00. There must also be no Chapter 13 bankruptcies in the last 2 years or no Chapter 7 bankruptcies in the last 4 years. There cannot be any Chapter 13 bankruptcies that have been dismissed by the court within the previous 180 days either. It is required that within 180 days before filing you must receive credit counseling from a court approved credit counseling agencies.
In Chapter 13, the amount of repayment plan is based on your income and paid back in either a 3 or 5 year plan. To determine the period of repayment, your income shall be compared to the state median income. If your income is lower than the median, your payment plan period is 3 years, and if your income is higher than the median, it will be a 5 year plan.
In Chapter 13, you are required to file a repayment plan that lists your current creditors and how much you intend to repay them. All secured debts and the delinquent amount must be specified. Debts that are considered high priority such as federal taxes, child support or alimony must be paid back in full. The amount of money left over will then go to unsecured debts. Within 180 days a confirmation hearing is held. This hearing determines whether the court approves your proposed repayment plan. If the court agrees with the plan, then it will become a legal obligation through an order of the court. After completing the repayment plan any debt left over will be discharged by the court.
At the Lozano Law Office, our job is to guide our clients to a new life and better financial position after bankruptcy. With the help of Attorney Crispin Lozano, in just a short period of time you may be able reorganize your debts and be on the way to a more secure financial future. We take care of everything – from filing papers in court, to negotiating with creditors to reduce your debt, to developing a repayment plan and getting it approved by the Court.
Lozano Law Offices charges convenient flat fees and offers payment plans for those who qualify. Call (510) 538-7188, or contact us online to schedule a free initial consultation.