Chapter 13 Bankruptcy Lawyer in California

Filing Bankruptcy Chapter 13 in California

At Wadhwani & Shanfeld, we individualize our approach for each individual. As our client, our goal — first and foremost — is to find a tailored solution just for you. We are hands-on Southern California Chapter 13 bankruptcy lawyers who work closely with every client to make sure they receive excellent service and make informed decisions. Get over 65 years' bankruptcy experience and extensive knowledge about bankruptcy filing. If you did not qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy, also known as reorganization bankruptcy, may be an alternative option.

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Call (800) 996-9932 today to discuss your situation with one of our skilled Southern California Chapter 13 bankruptcy attorneys.

What Is Chapter 13 Reorganization Bankruptcy?

Chapter 13 bankruptcy, or reorganization bankruptcy, allows the filer to restructure his or her debt into a three to five-year repayment plan. With this option, the filer could end up discharging some debts while obtaining more time to pay off others. Even if a debtor does not pass the qualifying means test required to file for Chapter 7 bankruptcy, there is a good chance that they will be eligible to file under Chapter 13 of the United States Bankruptcy Code.

Filing for reorganization bankruptcy could allow you the second chance you need to turn your financial situation around and to achieve renewed stability and peace of mind.

Chapter 13 bankruptcy can be beneficial for individuals who:

  • Have a monthly income that is too high to qualify for Chapter 7 bankruptcy
  • Want to protect their home from foreclosure
  • Want to preserve assets or property that may be exposed in a Chapter 7 bankruptcy
  • Want to repay tax or other debt through an affordable payment plan

Chapter 13 Debt Limits

Unlike Chapter 7 bankruptcy, in which a person can file for a discharge of unlimited amounts of debt, there are debt limits for individuals with “regular income” under a Chapter 13 plan, which means that it is not the right option for everyone.

Chapter 13 bankruptcy is more complex than Chapter 7 and takes more time because there is an intricate set of rules for how different types of creditors are repaid over the three to five year period. These rules provide debtors with many advantages and can help debtors deal with things like vehicle loans, home mortgages (even second mortgages) income tax liens, unprotected assets, and more. Since there are so many advantages to this type of filing, Congress has imposed certain debt limits.

As of 2021, the current debt limit for Chapter 13 filing is $394,725 for unsecured debts and $1,184,200 for secured debts. Every individual’s situation is different, so please contact Wadhwani & Shanfeld for an assessment of your unique financial situation.

How Does Chapter 13 Bankruptcy Stop Foreclosure?

When you file for Chapter 13 bankruptcy, all creditors must stop their collection efforts due to an order called the automatic stay. The creditors in charge of your home cannot conduct a foreclosure sale during an automatic stay. As soon as you file for bankruptcy, foreclosure proceedings must stop. Additionally, Chapter 13 bankruptcy allows you to catch up on missed mortgage payments as part of your repayment plan.

Please note that you must make all the mortgage payments that come due during your Chapter 13 plan on time – even though you are using your repayment plan to pay off delinquent mortgage payments from before bankruptcy. Still, Chapter 13 bankruptcy allows you to reorganize your debt, so in some cases your mortgage payments may be lower than they were before you chose to file. In addition, Wadhwani & Shanfeld may be able to assist with mortgage modification options while you are under Chapter 13 protection.

Are There Any Disadvantages to Chapter 13 Bankruptcy?

Yes. Just like other forms of bankruptcy, Chapter 13 bankruptcy impacts your credit. Specifically, Chapter 13 stays on your credit report for up to 7 years, which can make it difficult to get loans and credit cards for some period of time. However, many people who file for bankruptcy protection are able to rebuild their credit within a couple years. Even after your repayment plan is complete.

The repayment plan itself presents another challenge, as some people have trouble completing their plan due to extenuating circumstances, such as loss of job, divorce or health issues. In those cases, it may be possible to request a Chapter 13 plan modification or a hardship discharge. Wadhwani & Shanfeld is here to assist its clients throughout the entire Chapter 13 process.

If you truly want a fresh start and qualify for a Chapter 7 bankruptcy, it may be the best option for you. You may also be able to negotiate your debts with creditors and reduce and pay your debts without a repayment plan and outside of Chapter 13 bankruptcy.

As Board-Certified Bankruptcy Specialists, Raj Wadhwan and Greg Shanfeld are committed to finding the best debt relief option in your unique situation. We have experience where it counts, and we are ready to put more than 75 years of knowledge on your side.

Is Chapter 13 Bankruptcy the Right Choice?

Our Southern California Chapter 13 bankruptcy attorneys can help you assess your situation and determine if this is the right step for you to take. We are committed to giving each client an individualized response and to making sure that we adequately accommodate their concerns and priorities.

How Are Chapter 13 Payments Determined?

One of the questions that many people have when applying for Chapter 13 bankruptcy is how much their monthly Chapter 13 payments will be. Calculating those payments isn’t just a matter of adding up your bills and dividing it by 24 months. The calculation is more complicated because the bankruptcy courts will need to make sure that those payments are manageable for you.

They will consider the following factors when determining your Chapter 13 payments:

  • Income and expenses
  • The total amount of debts including secured & unsecured
  • The value of your property and your assets

The payment plan will need to account for all your source of income, including seasonal pay, alimony, and more. If you are behind in secured debt payments (mortgage or car payments), and you want to keep the property, your income has to be enough to pay those debts and your Chapter 13 payments.

What's the Difference Between Chapter 13 and Chapter 7 Bankruptcy

Chapter 13 and Chapter 7 bankruptcy are different types of filings in the United States. Here are the main differences:

  1. Eligibility: Chapter 13 is for individuals with regular income, while Chapter 7 is for individuals and businesses, regardless of income.
  2. Repayment Plan: Chapter 13 involves a three to five-year repayment plan, keeping assets while making regular payments. Chapter 7 may liquidate assets to repay creditors, discharging most unsecured debts without a plan.
  3. Debt Discharge: Chapter 13 allows a wider range of debt discharge, including certain taxes and mortgage arrears after completing the plan. Chapter 7 discharges most unsecured debts without a plan.
  4. Duration: Chapter 13 typically lasts three to five years, following the repayment plan. Chapter 7 is shorter, around three to six months.
  5. Asset Protection: Chapter 13 allows individuals to retain assets by making plan payments. Chapter 7 may sell non-exempt assets, but some assets are protected by exemptions.
  6.  Income Considerations: Chapter 13 requires regular income to meet the plan obligations. Chapter 7 has income eligibility criteria, with higher incomes possibly requiring a means test.

Choosing between Chapter 13 and Chapter 7 depends on income, assets, and financial goals. Consulting a bankruptcy attorney provides personalized guidance based on individual circumstances.

Don't wait any longer to receive the counsel and representation you need from our chapter 13 attorney. Call Wadhwani & Shanfeld today to discuss details about filing for Chapter 13 bankruptcy in California. Schedule a free case review to learn more.

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