If you are considering bankruptcy then you likely have some questions you need answers to. The best way to get those answers is to contact a bankruptcy attorney Chapter 13 in Pomona CA. You can do so by calling Law Offices of Terrence Fantauzzi at (909) 552-1238. In the meantime, keep reading to get answers to some of the most common questions we are asked.
What is Chapter 13?
The federal Bankruptcy Code’s Chapter 13 allows a consumer to return all or a portion of their obligations under a payment plan approved by the Bankruptcy Court. Creditors are often forbidden from collecting debts directly from the debtor once the plan is in place.
Rather than paying his or her creditors directly, the debtor pays a monthly amount to the Chapter 13 trustee, who then distributes the funds to the creditors according to the Chapter 13 plan. The debtor obtains a discharge for the remaining of his or her dischargeable obligations when the last payment is paid.
How long does a Chapter 13 plan take to complete?
A Chapter 13 plan can be completed in as little as three years for persons who earn less than the state’s median income (36 months). If the debtor’s monthly income is more than the state’s median income, the repayment plan will usually last five years (60 months). A Chapter 13 repayment plan is limited to a maximum of five years by law.
From the debtor’s perspective, how does Chapter 13 vary from Chapter 7?
The main distinction between Chapter 7 and Chapter 13 is how the debtor’s property is handled. In a Chapter 7 case, the debtor’s nonexempt property is auctioned, and the profits are used to pay off as much of the debtor’s obligations as feasible.
A debtor’s income is used to pay down as much of the debtor’s debts as feasible in a Chapter 13 case, with little or no impact on the debtor’s property. Furthermore, a Chapter 13 discharge is frequently broader than a Chapter 7 release, releasing the debtor from duty for a variety of debts that are not dismissed in a Chapter 7 case.
Why would a debtor prefer Chapter 13 versus Chapter 7 bankruptcy?
As a bankruptcy attorney Chapter 13 in Pomona CA will tell you, Chapter 13 is the best option for someone who wants to pay off most or all of their unsecured obligations and has the money to do it in a reasonable length of time.
Furthermore, if the debtor has a lot of nonexempt property or a lot of expensive exempt property that has been used as collateral for debts, a Chapter 7 case might result in the loss of that property, thus Chapter 13 may be the better alternative. Other categories of debtors who may not be able to discharge their obligations under Chapter 7 and who have one or more big debts that may only be dismissed under Chapter 13 may choose Chapter 13 to Chapter 7.
How does a Chapter 13 plan pay off debts?
The plan may cover the debtor’s entire debt load, including secured and unsecured obligations, as well as non-dischargeable debts like college loans and spousal and child support. Your bankruptcy attorney Chapter 13 in Pomona CA will outline the specifics of your case.
Talk to a bankruptcy attorney Chapter 13 in Pomona CA to get answers to other questions
To get answers to your additional questions, or to get started on your bankruptcy filing, contact Law Offices of Terrence Fantauzzi at (909) 552-1238 now.