Chapter 13 Bankruptcy
What is Chapter 13 Bankruptcy?
- In chapter 13 bankruptcy, your bankruptcy attorney prepares a “Chapter 13 Plan,” which provides payment on (an often) nominal portion of debt; the unpaid balance is forgiven (discharged).
- Your bankruptcy attorney creates a chapter 13 plan that permits payment of pennies on the dollar; your bankruptcy lawyer assures that you walk away debt-free.
- In chapter 13 bankruptcy, you have bankruptcy court protection that puts a permanent freeze on creditors’ collections. Chapter 13 is NOT simple debt consolidation, where you may pay dollar-for-dollar on debt and remain exposed to creditors’ clutches. In chapter 13, your bankruptcy attorney invokes a federal court injunction. This chapter 13 “Order for Relief” bars adverse creditor action and shields you from lawsuits, garnishments and levies.
- If you’re in foreclosure and wish to save your home, your bankruptcy attorney will provide a chapter 13 payment plan to catch you up on past-due mortgage payments (or “cure arrears”).
- If you have a second mortgage, your San Diego bankruptcy attorney can “strip it” (remove it) in chapter 13. This chapter 13 bankruptcy option applies if your home value is less than the payoff on your first mortgage.
- If you’re behind on car, truck, motorcycle or
plasma carpayments, your bankruptcy attorney submits a chapter 13 plan that repays the past dues. In chapter 13, the car loan term can be extended and the principal may be reduced. That’s right: your San Diego bankruptcy attorney can “cram down” the principal on your auto loan to its present market value if it was financed 910+ days-ago (about 2½ years).
- In chapter 13 bankruptcy, if you can’t pay non-dischargeable debts such as recent taxes and student loans, your San Diego bankruptcy attorney will lower monthly dues by extending the payment terms.
- As opposed to Chapter 7 Bankruptcy (where there may be rare loss of property— if you have too much), there isn’t any loss of assets in chapter 13; however, if your assets are too great, that may affect your chapter 13 bankruptcy payment amount.
- Your San Diego bankruptcy attorney will ensure you have the lowest chapter 13 payment possible.
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