Explanation Given by Bankruptcy Lawyer to Client from Rancho Cordova

Although over 85% of people filing for bankruptcy are doing so using Chapter 7, there are positive aspects to filing for Chapter 13. As a bankruptcy lawyer serving the Sacramento area, I work with clients to figure out which type of bankruptcy is best for them. In this blog I’m going to focus on some of the positive parts of Chapter 13 as I did recently with a client from Rancho Cordova.

Keep Your Home and Car

The fact is you can keep your home, car and other possessions under Chapter 13. That’s because you have developed a repayment plan that will allow you to eventually meet all of your debt obligations. That plan has been approved by the
court. Although you can often keep your home and car with Chapter 7, you cannot always do so and if you have a second home, you may not be able to hold onto both homes with Chapter 7. One home could be liquidated to pay off your debts.

Your Plan Can be Changed

If you run into problems repaying the debt, the court will allow you to change your repayment plans. You’ll have to file appropriate paperwork and the court will have to approve your petition. You may also, if you’re unable to payback your creditors because of a change in status such as losing your job or suffering a life-altering illness, convert to Chapter 7.

Up to Five Years

You have time to payoff your debt. The period is as short as three years and as long as five years. Over the course of five years, or 60 months, with 60 payments, you can pay down a lot of debt.

Consumer Debt Forgiven

Although not all consumer debt will be forgiven, a large proportion of your unsecured debt may be wiped out. The court wants to see that you’re interested in paying as much of your unsecured debt as you possibly can.

Chapter 13 Bankruptcy is an Option

As I told my client from Rancho Cordova, Chapter 13 is a viable option for some and it certainly was for this particular client. When filing for Chapter 13 or 7, a bankruptcy lawyer can help put your options in perspective.

Please contact our bankruptcy offices in Sacramento, and San Francisco, California,
at info@california-bankruptcyattorney.com or at 888-589-1977 if you have any
questions regarding bankruptcy.