Chapter 13 Bankruptcy

Foreclosures, mounting debts, and repossessions are real problems people face every day, and if you are struggling with crippling financial issues such as these, you may be considering filing for Chapter 13 bankruptcy. Chapter 13 bankruptcy is more expensive than Chapter 7 bankruptcy and it takes longer for debts to be discharged, but it is a great option for individuals with regular income to catch up on past-due payments, deal with outstanding debts in an affordable, manageable way, and work towards getting their life back on track. When a person declares Chapter 13 bankruptcy in the greater Sacramento area, he or she forms a plan to repay all or part of the debt owed over a specified period of time, with no interest. If you owe more than you can pay, or if you are having a hard time paying medical, credit card or other bills, and you are considering filing Chapter 13 bankruptcy, contact me today to discuss your options. With me on your side, you can get the help you need to resolve your financial difficulties and get a fresh start in life.

Skilled Greater Sacramento Area Bankruptcy Lawyer
I represent individuals in Chapter 13 bankruptcy cases in the U.S. Bankruptcy Court for the Eastern District of California. I have a reputation for skilled bankruptcy and debt-relief representation, and I have the knowledge and experience necessary to effectively serve clients throughout the greater Sacramento area. I will personally meet
with you to discuss your financial situation and help you devise a plan that best suits your needs, whether that means filing Chapter 13 bankruptcy or pursuing another type of bankruptcy relief. I will represent you before the bankruptcy court and throughout your bankruptcy case until your debts have been successfully repaid or discharged. Contact me today to find an affordable solution to your overwhelming debt.

What is Chapter 13 Bankruptcy?
There are different types of bankruptcy individuals in the greater Sacramento area facing growing debt can file, including Chapter 13 bankruptcy. As an alternative to Chapter 7 or Chapter 11 bankruptcy, Chapter 13 bankruptcy is a “reorganization” of your debts, meaning the money you owe is restructured into an affordable repayment
plan. Also known as a “wage earner’s plan,” Chapter 13 bankruptcy allows individuals with regular income to repay their debts gradually by making set monthly payments to a Chapter 13 trustee over a predetermined period of time, usually three to five years. Generally speaking, if your gross annual income is below California’s median income for your family size, you will have three years (36 months) to pay off the debt, unless a longer period is approved by the court. If your income is above the state median income, your repayment plan will be for five years (60 months). Under Chapter 13, you could end up repaying all your debt or only a portion of your debt, an important distinction that is based on your disposable income and the value of your personal property and non exempt assets. If you pay back only a portion of your debt, the rest of your debt would end up being discharged at  the end of the repayment period, unless the debt is considered non-dischargeable, in which case you would still be responsible for repaying the debt.

Eligibility for Chapter 13 Bankruptcy
Any person can declare Chapter 13 bankruptcy in the greater Sacramento area, so long as he or she meets the strict eligibility requirements. Unlike Chapter 7 bankruptcy, which gives a person the opportunity to discharge an unlimited amount of debt, Chapter 13 bankruptcy comes with certain debt limits, which is why hiring a knowledgeable the greater Sacramento area bankruptcy lawyer is always a good idea when considering Chapter 13 bankruptcy. No two bankruptcy cases are the same, and a good bankruptcy lawyer will consider each client’s individual circumstances before making a recommendation about the best course of action for his or her specific financial situation. For instance, if your debts exceed a certain amount, you may not be eligible for Chapter 13 bankruptcy. I can help you review and categorize your debts so you know whether or not Chapter 13 relief is right for you.

Chapter 13 Debt Limits
The debt limits that apply to Chapter 13 bankruptcy are adjusted every three years based on changes in the consumer price index. As of 2019, in order to be eligible for Chapter 13 bankruptcy, your total unsecured debts (i.e. credit card debt) must amount to less than $419,275 and your total secured debts (i.e. mortgages and auto loans) must amount to less than $1,257,850. There are other Chapter 13 bankruptcy requirements that you should be aware of when considering bankruptcy in the greater Sacramento area. If you don’t qualify for Chapter 7 bankruptcy because your monthly income is too high, or if you want to save your home from foreclosure, owe back taxes or family support or wish to protect your assets and property from liquidation, Chapter 13 bankruptcy may be right for you.

Advantages of Declaring Chapter 13 Bankruptcy
Chapter 13 reorganization bankruptcy is an interest-free repayment plan where the debtor pays all or a portion of the debt back to creditors, and there are several advantages to Chapter 13 bankruptcy, including the following:

* You can keep your home and property. Unlike Chapter 7 bankruptcy or “liquidation” bankruptcy, Chapter 13 bankruptcy allows you to remain in your home, rather than selling it off to pay back your creditors. If you are facing foreclosure and you declare Chapter 13 bankruptcy, you can immediately put a stop to the foreclosure proceedings and make a plan to repay your past-due mortgage payments over time.

* You can reduce your monthly payments. With a Chapter 13 plan, you can repay your debts in a more manageable way, with lower monthly payments and zero interest.

* You can avoid paying interest and penalties on credit card debt and personal loans. Chapter 13 bankruptcy will prevent interest and penalties from accumulating on your credit cards and personal loans, so you don’t end up putting yourself further in debt.

* You will be protected from lawsuits, wage garnishment and harassing collections calls. During the three- or five year Chapter 13 repayment period, creditors are prohibited from continuing collection efforts, which means you won’t be constantly bothered by phone calls from creditors.

* You can stop your vehicle from being repossessed. With Chapter 13 bankruptcy, you can keep your vehicle and consolidate the past-due payments into a manageable repayment plan.

* You can pay taxes and family support that are in arrears over a 5 year period. Certain family court obligations may be discharged without a 100% payment of that debt.

How Chapter 13 Bankruptcy Works
A Chapter 13 bankruptcy case typically begins when you file a petition with the bankruptcy court. From there, the debtor would propose a repayment plan based on his or her budget and the value of his or her assets, which would cover anywhere from 0% to 100% of the unsecured debt. Even if you declare bankruptcy and end up having to pay back 100% of the debt you owe, you are still better off with a Chapter 13 repayment plan, because you will do so while paying zero interest for the term of the plan. Under a Chapter 13 repayment plan, you make your monthly payments to a trustee, who allocates the appropriate payments to your creditors, keeping you from having any direct contact with creditors.

Calculating Your Monthly Payment
In the Eastern District of California, which covers the greater Sacramento area, your first monthly payment is due on or before the 25th day of the month after your bankruptcy case is filed, and this payment will be calculated based on the largest possible amount that can be derived from the following:

* Your disposable income – Your repayment plan is calculated based on your income minus secured debt payments for your house and car, and standard deductions for housing, food, utilities, and transportation.

* Any priority debts – Your repayment plan must allow for payment in full of any “priority debts,” such as federal and state income taxes, alimony or child support.

* The best interest of the creditors – Your repayment plan must ensure that unsecured creditors receive an amount equal to that which they would have received had you sought relief through Chapter 7 liquidation bankruptcy.

What Happens at the End of the Repayment Plan?
Typically, when you declare Chapter 13 bankruptcy, you only repay a portion of the consolidated debts you owe. At the end of the three- or five-year repayment plan, the remaining dischargeable debts that were not paid back during the term of the plan are discharged, which means you are no longer personally liable for repaying the debts. Say, for instance, you owe $45,000 in medical bills and credit card debt, and your monthly payment amount is calculated at $375 based on your disposable income, and your repayment period is set at three years because your income is below the state median income. At the end of the repayment plan, you would have paid back $13,500 of your outstanding debt and the rest of the debt would be discharged.

Which Debts are Non-Dischargeable?
There are certain types of debts that cannot be discharged in Chapter 13 bankruptcy in California, meaning even if you declare bankruptcy, you will still be obligated to repay these debts. Some examples of non-dischargeable debts include the following:

* Student loans (unless paying the loans would pose an undue hardship to you)
* Recent income tax debts and all other tax debts
* Past-due child support, spousal support and other debts related to family support
* Debts for personal injury or wrongful death caused by driving under the influence
* Fines for traffic tickets or criminal restitution and any other penalties for violating the law

* Debts you fail to include in your bankruptcy papers If these non-dischargeable debts are not paid in full during the term of your repayment plan, the balance will remain at the end of your bankruptcy case. Also, remember that if you intend to keep your house or vehicle, you will still be required to pay your mortgage and car payment as well. The payment on house or vehicle debt might be paid through the Chapter 13, depending on the time remaining on the debt and if you were current on the debt on the filing date.

Why Hire a Bankruptcy Attorney?
Declaring bankruptcy, assessing your debts and devising a fair repayment plan can be a complicated process, and a good bankruptcy attorney who understands the advantages and disadvantages of each bankruptcy solution can help guide you towards the option that best suits your financial situation. If you are deep in debt, you may be having a hard time paying your bills, or you may be facing foreclosure, experiencing wage garnishment or fielding harassing collections calls from creditors. Whatever your specific situation, I will work with you to find a viable solution to your financial difficulties and help you become debt-free. I am a well-respected debt relief agency with a reputation for providing professional bankruptcy and debt relief services throughout the the greater Sacramento area. I am familiar with the various bankruptcy options available to individuals facing crippling financial problems, and with my help, you can find the debt relief solution that best suits your individual needs. I have more than 25 years of bankruptcy legal experience and I have helped clients throughout the greater Sacramento area obtain relief through bankruptcy. I have a reputation for skilled and knowledgeable bankruptcy representation, and I can help you determine whether Chapter 13 bankruptcy is right for you.

Law Office of Barry H. Spitzer

I have been practicing bankruptcy law since 1992. I have successfully represented debtors, creditors and Chapter 7 trustees through the bankruptcy process. By representing all sides of bankruptcy cases, I have a unique prospective on how I can best assist you.
980 9th Street, Ste 380
Sacramento, CA 95814
(916) 442-9002
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