Los Angeles Chapter 13 Bankruptcy Lawyer
Effective Debt Relief Through Repayment
At Wadhwani & Shanfeld, we believe choosing the right attorney is the first step in overcoming your financial debt. Our firm has successfully helped more than 20,000 clients and we are dedicated to helping people get back on their feet after a financial set-back. If you need to resolve your debt, but you did not qualify for Chapter 7 bankruptcy, then Chapter 13 may be the ideal alternative for you.
Should I File for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a viable option for individuals who need to resolve debt issues without liquidating their assets. Instead, Chapter 13 enables the indebted party to schedule manageable payments over a 3-5 year duration to reconcile any financial obligations. Also called reorganization bankruptcy, Chapter 13 gives individuals suffering under hefty debt the opportunity to pay off debt and regain financial stability without losing valuable possessions.
Chapter 13 bankruptcy may benefit individuals in the following situations:
- Seeking resolution for overwhelming debt, but wanting to keep nonexempt property
- Need to pay off non-dischargeable debt
- Failed to qualify for Chapter 7 bankruptcy
- Wishing to avoiding home foreclosure and repossession of your vehicle
- Capable of repaying debt through a payment plan
- Self-employed business owners looking to retain business property
How to Qualify for Chapter 13 Bankruptcy
In order to qualify for reorganization bankruptcy, you must file as an individual or sole practitioner, and you must have enough income to afford the monthly payments.
There are specific rules regarding both you and the creditor which must be followed:
- You must have a steady income.
- You must have taken a credit counseling course.
- Creditors must cease all collection calls.
- If you are under foreclosure, it is halted, and back payments must be renegotiated.
- Unsecured debts must be under $419,275 (as of 2019)
- Secured debts must be under $1,257,850 (as of 2019)
Benefits of Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy is an effective way to provide relief from uncontrollable debts.
Some of the benefits of filing for Chapter 13 include:
- Avoid Foreclosure - Filing Chapter 13 can help save your homefrom foreclosure proceedings. You may also gain the ability to cure your late mortgage payments. The cure amount is what you need to pay in order to bring the loan current. Having an experienced attorney on your side can make all the difference when it comes to home foreclosures.
- Protect Assets / Non-Exempt Properties from Creditors - Filing for Chapter 13 can assist you with protecting certain assets from creditors. This means your creditors can’t repossess items that you file under bankruptcy. Exempt items vary, from state to state and federal law defines which assets are included. Generally, items such as cars, clothes, furniture, and jewelry are protected under Chapter 13 bankruptcy.
- Manageable Payment Plans over a Longer Period of Time - Chapter 13 allows you to break up your debt into reasonable payment plans that can be repaid over a period of 3-5 years. The payment plan will vary depending on your income and the amount of debt you have.
Protection for Third Parties - Under Chapter 13 bankruptcy, creditors can’t go after third-parties for your debts. This provision is in place to provide protection to co-signers. Normally, a creditor can contact a co-signer who signed for you to get a loan, credit card, or other assets. When you file for Chapter 13, your creditors are prohibited from contacting your co-signers for any reason.
If you have questions about whether Chapter 13 bankruptcy is right for you, don't hesitate to contact our bankruptcy team in Los Angeles to discuss your situation.
How Much Will My Monthly Chapter 13 Payments Be?
Each person’s situation is different, which is why repayment plans vary by individual income and average state income. If your income is below the median, you will likely be set with a 3-year repayment plan, while those above the median will repay for 5 years.
Your Chapter 13 repayment plan factors in:
- Your disposable income
- Certain expenses such as child/spousal support, mortgage payment, tax debt
- Total debt amount
- Value of your properties
During the period of repayment, each debtor may have a different repayment method, depending on their needs and the debt you owe. Because of the complex repayment rules, Chapter 13 bankruptcy usually takes much longer to negotiate than Chapter 7.
See what our clients have to say about working with us:
How Is Chapter 13 Different From Chapter 7?
Chapter 7 is a shorter process and can typically be completed within just a few months. Chapter 7 is a good option for those who have a large amount of unsecured debt, such as:
- Credit card debt
- Medical bills
- Personal loans
- Payday advances
To file for chapter 7, individuals must pass a financial evaluation called the “means test.” Chapter 7 bankruptcy is not an option if you wish to keep your home.
How Will a Chapter 13 Bankruptcy Affect My Credit?
Chapter 13 bankruptcy will stay on your credit report for up to 7 years after you file for bankruptcy. However, you are able to rebuild your score after the bankruptcy is over as long as you keep up with your payments and don't fall into further debt. Most people who are filing for bankruptcy may already have a low credit score due to missed payments. Bankruptcy is a way to get rid of your debt and help you start fresh so you can start improving your credit.
Struggling With Debt? Contact Our Firm, Today!
At Wadhwani & Shanfeld, we have helped more than 20,000 clients find stable ground after suffering financial hardships. If you trust our firm with your debt issues, not only will we make an individualized solution for you, we’ll stand by you every step of the way. With over 65 years of collective experience, we are confident our attorneys can represent your bankruptcy case in Los Angeles.