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Chapter 13

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Fresno Chapter 13 Bankruptcy Attorney

Seeking Help from a Fresno Bankruptcy Lawyer

When debtors want to file for bankruptcy and they earn enough money to pay back a portion or all of their debts, they usually file for Chapter 13 bankruptcy (the "wage earner plan"). Here is a breakdown of how Chapter 13 bankruptcy works. First, the debtor files for bankruptcy, which places a legal hold—or an "automatic stay"—on collection efforts by your creditors (most of the time), such as lawsuits, foreclosures, repossessions, wage garnishment, etc. If you are allowed to proceed with the bankruptcy, you get to start making payments under a new payment plan that is more manageable, with payments being made to priority creditors first.

After three to five years of successfully making these payments, you can usually have the remainder of your debt under the bankruptcy plan discharged. This means that you no longer owe the debt, and creditors cannot try to get you to pay it. There are many different factors that go into Chapter 13 eligibility, as well as into how this type of bankruptcy can impact a debtor. Because of this, you should proceed with your bankruptcy filing until after you have talked to a skilled lawyer. At Arnold Law Group, APC, we have Fresno bankruptcy attorneys who are well-versed in bankruptcy law. We can help you assess your financial situation and determine whether Chapter 13 bankruptcy is the appropriate debt solution for you!

Eligibility for Chapter 13 Bankruptcy

Since Chapter 13 bankruptcy is supposed to be for steady wage earners, those who are applying for this form of debt relief will typically only be approved if they can show that they have sufficient income for paying back their debt. Furthermore, their debt must not exceed a certain amount. Someone undergoing Chapter 13 bankruptcy cannot have secured debt totaling more than $1,149,525 or unsecured debt totaling more than $383,175. Some people choose to file under Chapter 13 because they earn too much money to qualify for Chapter 7 bankruptcy. Meanwhile, others choose this option because they don't want their assets to become subject to possible liquidation, which happens in Chapter 7 bankruptcy.

Filing for Chapter 13 bankruptcy can be a solid plan for individuals who don't meet the requirements to file for a Chapter 7 bankruptcy but still require assistance to pay down their debts.

Our Fresno Chapter 13 bankruptcy lawyers can help you find the best path forward in your bankruptcy case.

Contact us online or via phone at {F:P:Sub:Phone} to schedule a consultation with our team and retake control of your life and finances.

Filing for Chapter 13 Bankruptcy in California

Generally, Chapter 13 bankruptcies follow the same pattern:

  • Eligibility requirements. To file for Chapter 13 bankruptcy, you must have a steady income, and you can't be filing on behalf of a business. You must also meet certain debt limits, which we cover later in their own section.
  • Credit counseling. Before filing for Chapter 13 bankruptcy, you must complete a number of credit counseling courses. These courses aim to help individuals regain control of their finances through improved financial literacy and spending habits.
  • If you're eligible to file for a Chapter 13 bankruptcy, you should fill out Chapter 13 bankruptcy forms - generally with the help of an attorney - and file them with your bankruptcy court to initiate your case. When you go to file, you'll need to present the court clerk with a certificate indicating you completed the required credit counseling courses.
  • Repayment plan. As the individual filing for bankruptcy, you'll have a trustee assigned to your case. In Chapter 13 bankruptcies, trustees try and help debtors repay their creditors effectively. You'll need to draft a debt payment plan detailing how you plan to repay your debts. Creditors will have an opportunity to give input on the plan. If creditors approve of the plan, the bankruptcy court can confirm it, officially putting the repayment plan in place. Generally, debt repayment plans must meet the following requirements:
    • The debtor can comply with the repayment plan, judging by their finances;
    • The debtor isn't attempting to manipulate the bankruptcy process or their creditors with the plan;
    • The plan complies with bankruptcy laws.

After the court confirms the plan, the debtor has three to five years to repay their creditors.

At this stage, you may be wondering if you can "get rid" of any debt using Chapter 13 bankruptcy. The answer is "maybe."

When you file for Chapter 13 bankruptcy, there are certain types of debts you will absolutely want to pay off over the course of your payment plan. Some of these won't be optional - for example, you'll need to pay for any outstanding child support or alimony obligations. Other types of debts, such as house or car payments you owe, should be consistently paid off if you want to keep that property.

At the end of your payment plan, the bankruptcy court will evaluate your case. If you have successfully paid for priority or secured debts (such as child support and alimony payments, as well as payments for any property the debtor wanted to maintain), the court may choose to wipe out the remaining balance on any dischargeable debts you still own.

As a result, Chapter 13 bankruptcy is generally fairly effective when it comes to ensuring that debtors walk away debt-free, except for certain long-term types of priority debt such as their mortgage, child support, student loans, etc.

Our lawyers are here to help you navigate the process of filing for bankruptcy. Contact our firm today so that we can provide you with a case evaluation.