Chapter 13 Bankruptcy

+Can I lower my car payments in Chapter 13 Bankruptcy?

Yes. If you financed your car 910+ days (about 2½ years) before filing chapter 13 bankruptcy, then we can “cram down” your car loan. This means reducing the loan payoff (balance) to the fair market value. This is a unique benefit to chapter 13 bankruptcy and is not applicable to chapter 7 bankruptcy. In any event, even if you financed your car more recently, you can extend your monthly payments up to 60 months (the maximum length of a chapter 13 bankruptcy payment plan).

+Can I get rid of my second mortgage in Chapter 13 Bankruptcy?

Yes. If your second mortgage is completely unsecured (that’s the case if you owe more on your 1st mortgage than your home is currently worth) you can have the second mortgage eliminated (stripped) in a chapter 13 bankruptcy (but not in a chapter 7 bankruptcy).

+Will Chapter 13 Bankruptcy allow me to save my home?

Where there’s a will there’s a way. If you’re behind on your mortgage, we can file a chapter 13 bankruptcy that gives you up to 60 months to repay the past dues. You must concurrently maintain ongoing dues, yet second mortgage payments are often eliminated in chapter 13 bankruptcy.

+What happens after the Chapter 13 Bankruptcy Meeting of Creditors?

After the chapter 13 meeting of creditors, we pursue Confirmation of your chapter 13 Plan. Confirmation means agreement between us, the trustee, and creditors on your monthly payment amount. When we file chapter 13 bankruptcy, we provide for a low monthly payment plan. There may be minimum amounts that HAVE to be paid, such as back-payments on your mortgage or certain tax debts (the government gets first dibs). But we don’t volunteer extra and usually unsecured creditors (like the credit card folks) get scant pennies on the buck. There’s a push by the chapter 13 trustee and creditors for more money. Well, we push back and get your chapter 13 confirmed with the lowest possible monthly payment.  Once your chapter 13 payment plan’s confirmed and approved by the bankruptcy court, you simply maintain your (low) monthly payments (chapter 13 plans run 36- or 60-months). At the end of the chapter 13 bankruptcy, your debts are discharged: i.e. unpaid balances on debts are forgiven or canceled.

+What is the Chapter 13 Bankruptcy Meeting of Creditors?

The Meeting of Creditors is a very-brief interview with a Chapter 13 Bankruptcy Trustee held about a month after your case filing. Creditors are NOT expected to show at “their own party.”  But your San Diego Bankruptcy Attorney WILL be there.  We’ll meet at theUS Trustee’s office in downtown San Diego. You’ll answer routine questions (e.g. “What’s your pay rate?”), while Yours Truly will address all legal affairs.  The crux of the matter in chapter 13 is that the trustee seeks to maximize your payments to creditors, whereas we ensure you don’t pay more than you should.  Through experience and hard work, your San Diego bankruptcy attorney promotes your savings to better your welfare and that of your family.

+CAN I file (qualify) for Chapter 13 Bankruptcy?

Most persons who seek to file chapter 13 bankruptcy do qualify for it.

  • Chapter 13 bankruptcy is a monthly payment plan; hence it’s dependent upon there being a regular monthly source of income.
  • Chapter 13 bankruptcy is for persons whose unsecured debt (e.g. credit cards) falls short of $383,175 AND whose secured debt (e.g. mortgages) is less than $1,149,525. If your debt appears to surpass either limit, then we’ll scrutinize the nuanced distinction between secured- and unsecured debts.
  • If you file a chapter 13 bankruptcy within less than 4 years after having filed a Chapter 7 Bankruptcy (that ended in a discharge or cancellation of debt), then you won’t get a chapter 13 discharge (meaning you can’t cancel debt for pennies on the dollar), but you can extend and reduce debt payments over 60 months.

+What is Chapter 13 Bankruptcy (in a few words)?

Chapter 13 Bankruptcy is a debt repayment plan. You make monthly payments for 36- or 60-mos. Usually, you end up paying pennies on the dollar; the unpaid-for balance gets canceled (discharged). Chapter 13 bankruptcy also lets you lower car payments and–get this… remove your second mortgage or equity line. Payments are suited to your budget and designed to be affordable.

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