Chapter 13 Bankruptcy in California
By filing a Chapter 13 bankruptcy, one can repay a portion or all of an outstanding debt often at lower interest rates. A Chapter 13 bankruptcy filing is ideal for an individual facing a repossession or foreclosure and want to maintain possession of an automobile or home and/or are in arrears for child support payments or taxes and unable to pay due to other outstanding debts. There are also individuals with a strong desire to pay outstanding debts and not erase them under a Chapter 7 filing, a Chapter 13 filing is more in alignment with these desires.
In order to file for Chapter 13 bankruptcy, one must demonstrate a source of income. The source of income can come from any source of employment, earned commissions, pension payments, Social Security benefits, unemployment benefits, child support or alimony, royalty payments and/or funds from a property sale.
Chapter 13 Bankruptcy Filing Process
It is highly recommended that an attorney is retained for any bankruptcy filing to ensure that it is handled correctly without issue. Before an attorney files the bankruptcy paperwork on your behalf, it is recommended that there is a thorough discussion regarding one’s current financial situation and outstanding debts. For a Chapter 13 filing, proof of income will be required. Your attorney will file for Chapter 13 on your behalf with a proposed payment plan. After the filing is made, creditors must legally stop any collection and/or repossession activity against an individual.
A Chapter 13 Trustee is assigned to each filing, and will be present in the pre-court meeting with an individual. Debtors looking to recoup payment from an individual filing Chapter 13 may appear at the pre-court meeting to protest payback amounts. A court date is typically scheduled one to two weeks following this meeting. At the court hearing, the payment plan proposed by an attorney when filing Chapter 13 bankruptcy will be approved or disapproved. Payments made on a Chapter 13 bankruptcy will be directly taken from a personal bank account or withheld from sources of income.
Things to Know About Filing Chapter 13 Bankruptcy
Before filing for Chapter 13 bankruptcy, it is important to be aware of the following:
- The individual filing for Chapter 13, upon approval of the bankruptcy, will be required to pay the outstanding debts within five years;
- The trustee assigned to the bankruptcy filing will pay debts in order of priority. Home mortgages and car payments are usually the first to be paid for, if they were included in the bankruptcy filing plan. Tax and child support obligations are followed by unsecured debt;
- Once the debtor finishes the five-year plan proposed in the Chapter 13 filing, the remainder of the unsecured debt is discharged;
- A sole proprietorship cannot file a Chapter 13 bankruptcy, but can file as an individual and list business-related debts;
- One cannot file for Chapter 13 if his/her secured debts exceed $1,010,650; and
- The tax filings for the individual filing for Chapter 13 must be current.
The Luftman, Heck and Associates Advantage
We at Luftman, Heck and Associates understand the emotional and financial strains of financial debt and the impact it can have on other areas of your life. We will be with you at every step of your bankruptcy and help ensure that you receive the fairness you deserve throughout your bankruptcy filing. Our team of lawyers in San Diego have years of experience guiding clients through bankruptcy filings, and they will always strive for the best possible outcome on your behalf.
Get Started Today
If you or a loved one are in need of legal representation for a bankruptcy filing in California and are interested in learning more about Luftman, Heck and Associates LLP, please fill out a Contact Form. A member of the firm will contact you directly to discuss your case in more detail and provide additional information about our bankruptcy filing services.