Many California residents are facing financial crisis. If you are considering filing bankruptcy in California and you have property you would like to keep or if your income is too high to qualify for Chapter 7 Bankruptcy, you may be able to file Chapter 13 Bankruptcy. Many individuals will not be allowed to file Chapter 7 Bankruptcy due to changes in bankruptcy laws. Current bankruptcy law requires a “means test” be done to determine if you income is below the median income level for your state and/or you have enough disposable income to repay a portion of your debt. A California Bankruptcy Attorney can perform the means test for you to determine if you can file for Chapter 7 Bankruptcy in California.
Unlike Chapter 7 Bankruptcy, which is an immediate liquidation and discharge of your assets, filing Chapter 13 Bankruptcy will allow the debtor to pay back all or a portion of their debt. Chapter 13 Bankruptcy is a restructuring of your debt under a three to five year repayment schedule. Chapter 13 Bankruptcy is generally available to individuals who have a regular income and can commit to repaying their debt. To file Chapter 13 Bankruptcy you can have up to $922,975 in secured debt and no more than $307,675 in unsecured debt. These figures may be adjusted periodically, it is important to discuss your bankruptcy options with a California Bankruptcy Attorney.
How does Chapter 13 Bankruptcy work?
The first step if you are considering filing Chapter 13 Bankruptcy in California, is to contact a California Bankruptcy Attorney. A California Bankruptcy Lawyer will analyze your financial situation and determine if you qualify to file Chapter 13 Bankruptcy. The California Bankruptcy Lawyer will also help you file your bankruptcy petition which will outline your assets and liabilities and your bankruptcy repayment plan. If your bankruptcy plan is approved by the bankruptcy court, a trustee will be appointed to manage your debt repayment plan and disburse all payments to your creditors. Priority debt payments may include: taxes, child and spousal support. Unsecured debt will include: medical bills, credit card payments and any personal loans. Secured debt payments will include your mortgage payment, and car loans. Payments will be distributed according to the priority assigned under current bankruptcy law.
Chapter 13 Bankruptcy will allow you to retain your possessions and property. Chapter 13 Bankruptcy can also stop: wage garnishments, repossessions, home foreclosures and harassing creditor phone calls. If you complete your repayment plan, you will get a discharge of your debt. Unfortunately, filing bankruptcy will not discharge all types of personal debt including:
- Fraudulently incurred debt
- Spousal Support/Alimony
- Child Support
- Various student loans
- Certain Cash Advances
- Certain purchases for luxury goods
- Back Taxes
Due to the increased complexity in bankruptcy law, it is a good idea to hire a California Bankruptcy Attorney who can help you complete all bankruptcy documents completely and accurately. A Bankruptcy attorney also has experience analyzing your debts and assets and can make sure the repayment schedule is done correctly. Failure to list all assets or intentionally not listing assets could result in your debts not being discharged. Filing bankruptcy in California or any state, is a big decision that should not be done with out consulting a California Bankruptcy Attorney.
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