Many people assume that filing for bankruptcy means they are giving up their old life and starting completely new. This is actually not the case. In Chapter 7 bankruptcy, you are 'liquidating' some of your valuables, but you do not have to lose everything. However, for many of us, this is still a little too drastic for our needs. If you find that you are struggling to overcome your debt but do not want to file for liquidation bankruptcy, then Chapter 13 bankruptcy may be the sol ution you are looking for. Instead of liquidating your debt, you will be given the opportunity to 'reorganize' it. In a sense, Chapter 13 offers you the chance to pay off some of your debts through a suitable payment plan. Below are some important facts about the Chapter 13 process:
Chapter 13 bankruptcy provides an alternative to those who cannot qualify for Chapter 7 bankruptcy or for those who do not want to file for Chapter 7.
Chapter 13 bankruptcy will consolidate your debts into one lump sum.You will be put on a payment plan, as advised by the bankruptcy court, which lasts between three to five years .
Your payment plan time and amount will depend on your income and your financial situation.After three to five years, your remaining debts will be discharged, regardless of whether you have paid them in full or not. However, some debts will not be discharged including child support, student loans, mortgage payments and other secured debts.
Chapter 13 bankruptcy will stop all creditors and wage garnishment. This is referred to as "automatic stay."
In most Chapter 13 bankruptcy cases, you will not lose anything you own.
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The Law Offices of Michael D. Croddy 331 J Street #200, Sacramento, CA 95814 (916) 229-9754