Do you have a regular, steady source of income but are burdened by a heavy
debt load? Or, is your home facing
foreclosure? If your answer is yes to either of these questions, then you may be a
perfect candidate for the Chapter 13 bankruptcy.
Chapter 13 is similar to a debt consolidation plan where you pay a percentage
of the debt you owe typically at 0% interest. This form of bankruptcy
enables people with regular incomes to create a plan to repay all or a
portion of their debts over a three to five year time period at a monthly
payment they can reasonably afford.
If the debtor's income is below the applicable state median, the plan will
be set for three years unless the court approves a longer period. If the
debtor's monthly income is higher than the state median, the plan will
be for five years. During the 3 to 5 year time period, the law forbids
creditors from commencing or continuing any collection efforts against
Pros & Cons of Chapter 13
When debtors are deciding whether to file a
Chapter 7 or Chapter 13 bankruptcy, it's important to consider what types of debts they
have as well as their financial goals. One of the most significant differences
and advantages of a Chapter 13 versus a Chapter 7 is that the Chapter
13 gives debtors the opportunity to save their homes from foreclosure,
or pay back a high amount of tax debt with minimal penalties and interest.
A Chapter 13 can also allow people to reschedule secured debts and extend
them over the life of the Chapter 13 payment plan. Other advantages of
a Chapter 13 include:
A Chapter 13 lowers a debtor's monthly payments.
A Chapter 13 can protect co-signers.
It allows home owners to cure delinquent mortgage payments over time.
It acts like a debt consolidation loan.
With a Chapter 13, the debtor writes a check to the Chapter 13 trustee
every month who in turn, distributes the money among the creditors. There
is no direct contact between the debtor and his or her creditors; the
trustee handles this for them.
Contact a San Francisco Bankruptcy Attorney
The Bankruptcy Law Firm, our lead attorney is a
Certified Bankruptcy Specialist by the American Board of Certification. We have been named among the
Top 100 Firms by the Debt Education and Certification Foundation (DECAF), and
we have represented over 6,000 bankruptcy clients. We are well-aware of the stress and anxiety associated with financial
problems, and we are here to help you find the most viable solution that
will allow you to keep your property such as your home, your automobile,
your jewelry and your personal possessions etc.