What Are the Benefits of a Chapter 13 Bankruptcy?
Despite some common beliefs, it is often an unfortunate event, such as an illness – not overspending – that pushes people into bankruptcy. Chapter 13 has many benefits for those seeking relief by offering debtors a manageable debt repayment plan. With the right guidance, Chapter 13 filers regain control of their debt and make a fresh financial start.
Advantages to Chapter 13
If you file for bankruptcy under Chapter 13 you may experience the following benefits:
- You can stop creditor collection activities, including foreclosure and garnishment, with the automatic stay – a court order that is enacted as soon as you file your petition
- You may keep more of your real and personal property because the Chapter 13 bankruptcy trustee does not liquidate your assets to pay off your debts
- You can repair your credit faster because Chapter 13 does not remain on your credit report as long as a Chapter 7
- You can build a savings or emergency fund that may not have been possible outside of the bankruptcy process
Qualifying for Chapter 13
If you meet the following criteria you may file under Chapter 13 :
- You must show that you receive a steady monthly income – from employment, retirement or other savings
- You must have enough money to cover your debts after meeting ordinary obligations
- Your total amount of unsecured debt must be less than $360,475
- Your total amount of secured debt must be less than $1,081,400
How do you make an affordable repayment plan?
Depending on your financial situation, your Chapter 13 debt reorganization payment plan can extend over a period of three to five years. A qualified Los Angeles Chapter 13 bankruptcy attorney may negotiate with your creditors to lower the balance you owe on most of your secured debts. After the court approves your plan, you make payments to the bankruptcy trustee designated to your case. The trustee then disburses the money to your creditors according to your plan. Upon the successful completion of plan, your debts are discharged releasing you of liability.
Let a certified Los Angeles Bankruptcy attorney help you redefine your financial future
The Chapter 13 bankruptcy attorneys at the Law Office of Michael Jay Berger have 30 years of experience helping clients find debt relief solutions through bankruptcy. Our attorneys use the latest technology and extensive legal knowledge to better serve our clients throughout Southern California.