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Attorney Debt Relief, P.C. - Christopher J. Jackson

Hollister Bankruptcy | Bankruptcy Monterey

CHAPTER 13

As a result of the “Great Recession” and housing bubble, millions of Americans are struggling to keep up with their monthly bills and household expenses. Bankruptcy protection was designed for such situations.

What is a Chapter 13 Bankruptcy?
Chapter 13 is also known as a reorganization or consolidation bankruptcy, because your debts are reorganized and reduced into a lump sum which you pay over 3 to 5 years. At the completion of the Chapter 13 plan, your debts will be discharged (i.e., gone forever), much like in a Chapter 7 bankruptcy. If you have sufficient income to cover household expenses and a certain amount of debt over time, then Chapter 13 might be right for you.

How Can a Chapter 13 Bankruptcy Help Me with My House & Cars?
A Chapter 13 bankruptcy is a potential long-term solution for keeping your “secured debt” (e.g., house & cars). A Chapter 13 bankruptcy enables you to get caught up on the past-due payments over a period of years, rather than all at once. Another benefit of Chapter 13 is that you may be able to completely remove a second mortgage and/or home equity line. In addition, a Chapter 13 bankruptcy may allow you to significantly reduce your home and car payments.

What About My Other Debt?
A Chapter 13 bankruptcy enables you to pay your “unsecured debt” (like credit cards, medical bills, unsecured loans, etc.) over a period of 3 to 5 years. Oftentimes, you will only have to pay back a portion (or none at all) of such unsecured debt.

Will a Chapter 13 Bankruptcy Stop Foreclosures, Repossessions, Etc.?
Filing either a Chapter 7 or Chapter 13 stops creditor harassment, wage garnishment, lawsuits, repossessions and foreclosures.

What Assets Can I Keep in a Chapter 13 Bankruptcy?
In most Chapter 13 cases you can keep all of your assets.

Should I file a Chapter 7 or Chapter 13 Bankruptcy?
Chapter 7 has some significant advantages over Chapter 13 in that it will simply eliminate the majority of your unsecured debts (with some exceptions) and give you a “fresh start” in as little as 3-4 months. However, not all people will qualify for a Chapter 7 bankruptcy.

A Chapter 13 bankruptcy reorganizes (and usually reduces) your debt into a lump-sum which you pay off over 3 to 5 years. This is preferable if you have enough income to pay off your debts but just need a reasonable plan under which to do it. Chapter 13 also provides a potential long-term solution for those who want to keep their house. Moreover, in a Chapter 13 bankruptcy you can often pay off debts which are non-dischargeable in Chapter 7 (e.g., certain tax debts) over time. However, not all people qualify for a Chapter 13 bankruptcy.

How will Bankruptcy affect my Credit?
While bankruptcy will affect your credit to a degree, if you are in default on many bills, your credit score is likely already suffering. The good news is that filing for bankruptcy will wipe your debts clean on your credit report, and can sometimes even improve your credit score! See Wall Street Journal Article: "Declaring Bankruptcy Can Improve Your Credit Score."

While bankruptcy will stay on your credit report for seven (Chapter 13) or ten (Chapter 7) years, depending upon your situation you may qualify for a home loan in as short as 18-24 months. As noted in the above article, you can also achieve a 700 credit score within a few years with proper credit management. We can discuss ways to improve your credit after bankruptcy.

Contact an experienced and compassionate bankruptcy lawyer at Attorney Debt Relief, P.C today. We’ll review your financial situation to determine whether a Chapter 7 or Chapter 13 bankruptcy is right for you.

Contact us for a FREE consultation: (831) 655-5111

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We provide bankruptcy services in Monterey County, San Benito County, Santa Cruz County, Santa Clara County, Monterey, Hollister, Salinas, Watsonville, Seaside, Marina, Santa Cruz, Aptos, Pacific Grove, Carmel, Pebble Beach, Chualar, Gonzales, Soledad, Greenfield, Gilroy, Morgan Hill, San Jose & King City.*

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