Bankruptcy Attorney in Pasadena, California
Chapter 13 bankruptcy is ideal for debtors who have regular income but are behind on their mortgage or car loan payments. This bankruptcy chapter allows you to reorganize your debts through an affordable repayment plan. Furthermore, you can save your non-exempt assets from liquidation and stop the threat of immediate car repossessions or home foreclosures. In this type of bankruptcy, you’ll negotiate with your creditors and with a court-appointed bankruptcy trustee to create a repayment plan lasting three to five years. At the end of the plan, your remaining unsecured debts will be discharged.
Filing for Chapter 13 bankruptcy may be a good option to seek debt relief and have a fresh start. However, not everyone is eligible for this bankruptcy chapter. Before you file bankruptcy, it is important to seek legal help from a reliable Pasadena bankruptcy attorney to help you determine whether Chapter 13 bankruptcy is the best option to solve your debt problems.
At Daniela Romero Law Office, we have extensive experience in handling bankruptcy cases for decades. We help every client by freeing them from the burdens of overwhelming debt. Our seasoned bankruptcy lawyers will help you understand the bankruptcy process and maximize the benefits of bankruptcy filing. We will be with you every step of the way until you get your finances back on track.
Call us now at 626-296-6971 to schedule a free initial consultation.
Who can file for Chapter 13 bankruptcy?
If you’re struggling with overwhelming debts but you have a steady income, Chapter 13 bankruptcy may be a good option for you. However, not everyone is a good candidate for this bankruptcy type. Consulting a credible bankruptcy attorney in Pasadena can help you determine whether you are eligible to file for Chapter 13 bankruptcy.
To qualify for this bankruptcy chapter, you must prove that you have enough income to pay off your debts and maintain your proposed payment plan . If you don’t have sufficient income to support the plan, or if creditors won’t receive enough payment, you’ll be required to file under Chapter 7. Moreover, Chapter 13 bankruptcy can be an expensive option. You need to pay your non-dischargeable debts and the value of your non-exempt property using all your disposable income.
Before filing for Chapter 13 bankruptcy, you must not have any previous bankruptcy case (Chapter 7 or 13) that was dismissed within the last 180 days. In addition, you must not have filed for Chapter 13 bankruptcy in the past two years or Chapter 7 bankruptcy in the past four years.
How much will I have to pay each month?
When you file Chapter 13 bankruptcy, you must develop a repayment plan that structures your debt into manageable monthly payments. Your Chapter 13 plan payment will be calculated based on your disposable income. A top-ranking Pasadena bankruptcy attorney can help you know more about the details of the repayment plan. Your court-appointed bankruptcy trustee will determine your gross income and deduct certain expenses according to local and national standards. Then, certain expenses such as child support, alimony, mortgage or car loan payments, and tax debts will be subtracted as well. You will have to continue paying these debts throughout the repayment plan period.
After deducting the allowable living expenses and required monthly payments, the remaining amount will be considered your disposable income. You’ll have to pay this amount each month as part of your Chapter 13 repayment plan. If you have a higher disposable income, you’ll typically have a higher monthly payment. Your payment goes to the trustee on the approved schedule and they are responsible for dividing it among your creditors as detailed in the repayment plan.
Not following through on the approved repayment plan could complicate your bankruptcy case. Therefore, it is important to make all payments according to the plan. This will increase your chances of receiving a bankruptcy discharge.
Which debts are qualified for discharge in Chapter 13 bankruptcy?
Not all debts are paid when you file for Chapter 13 bankruptcy. A knowledgeable bankruptcy attorney in Pasadena can help you determine the types of debts that can be discharged in Chapter 13 bankruptcy. Generally, your debts will be divided into three different categories in your Chapter 13 repayment plan.
Priority debts
Certain types of debts are nondischargeable in bankruptcy. If you file for Chapter 13 bankruptcy, priority debts must be fully paid throughout your repayment plan. The most common examples of priority debts are alimony, child support, and certain tax obligations. If you have a significant amount of priority debts, your payment plan must be large enough to wipe out your debts within the limit of five years.
Secured debts
Secured debts are generally backed by collateral. It may be in the form of a house or a vehicle. In Chapter 13 bankruptcy, all secured debts must be fully repaid. In some cases, you may be required to pay back the value of the collateral or the full payment of the debt depending on the terms of the secured loan. If you fail to make monthly payments on your loan, your creditor can seize the collateral, sell it, and use the proceeds to repay your debts.
Unsecured debts
Credit card bills, unsecured personal loans, and medical bills are classified as unsecured debts. These are the debts that are not backed by collateral. Once you have completed the repayment plan, unsecured debts may be reduced and the remaining balances may even be forgiven.
Will I lose my home or my car?
Chapter 13 bankruptcy doesn’t require you to surrender any assets or property. However, you may choose to give up certain assets if you will fail to make monthly payments. By stretching out the repayment period, Chapter 13 bankruptcy can make the debt more manageable. You will have the opportunity to save valuable property like your home or car from foreclosure or repossession.
In addition, the government bans creditors from either beginning or continuing to try to collect your money or repossess your property during the entire bankruptcy proceeding. Once you declare bankruptcy, the automatic stay will immediately be in place. It protects you from any collection actions, including repossession, foreclosure, lawsuit, or wage garnishment. The automatic stay gives you the time you need to organize your finances and ensure that all your creditors will be equally treated.
Consult our Experienced Pasadena Bankruptcy Attorneys Now!
The Chapter 13 bankruptcy process is complicated. However, this may be your best option to restructure your finances, pay off your debts, and save your valuable assets from liquidation. Before you file for this chapter, you have to make sure that you meet all the requirements and keep up with your repayment plan.
For a deeper understanding of Chapter 13 bankruptcy, do not hesitate to seek legal help from our competent Pasadena bankruptcy attorneys at Daniela Romero Law Office. Our bankruptcy law firm will help you decide how best to protect your valuable assets while paying for your debts in a more affordable repayment plan. We will help you deal with the complexities of the Chapter 13 process. We will be with you every step of the way until you get your discharge and start over a debt-free life.
Schedule a free initial consultation now by dialing 626-296-6971.