Law Offices of Nicholas Gebelt

Whittier Chapter 13 Bankruptcy Lawyer


Reorganization Bankruptcy Under Chapter 13

Are you afraid of losing your home or car because you are behind on the payments? Chapter 13 bankruptcy may be a good option because it provides a way for you to catch up on those payments.

In Chapter 13, you file a plan to pay off some of your debts over several years. Chapter 13 allows you to keep property with significant equity — especially your home and car — if you can make the payments.

You should consider filing a Chapter 13 plan if you:

  1. Are in danger of losing your home, but can make future payments
  2. Are behind on mortgage payments, but can catch up if given some time
  3. Have valuable property, which is not exempt, and can afford to pay Chapter 13 plan payments

You must to have enough income to pay for your necessities and make the required payments as they come due.

La Mirada Debt Relief Attorney

At the Law Offices of Nicholas Gebelt, we help people file for Chapter 13 bankruptcy protection. Before we file for you, we will review your finances and debts to ensure that you achieve your goals. If bankruptcy is not the right option for you, we will tell you. If you decide to proceed with Chapter 13 bankruptcy, we will be with you through every step of the process.

Filing Chapter 13 Bankruptcy

Chapter 13 reorganizes your finances through a partial debt repayment plan. While you are in the plan, you continue making payments on secured loans, such as mortgages and vehicle loans. Any income that remains after making these payments and covering your other reasonable living expenses is used to make plan payments.

Once your judge confirms the plan, you send in a monthly payment to your Chapter 13 trustee. The trustee then distributes the payment to your creditors according to the terms of the plan. In the meantime, your creditors must leave you alone. At the end of the plan, any remaining scheduled dischargeable debt is discharged.

Filing for Chapter 13 triggers an automatic stay, which stops collection activities against you. The automatic stay stops creditor calls and prevents creditors from garnishing wages, filing liens, foreclosing on liens and repossessing property.

Lien Stripping In Chapter 13

If the current market value of your home is less than the current balance on your first mortgage, and you have a second mortgage on the home, you may be able to strip off that second mortgage and treat it as unsecured debt in your Chapter 13 plan. Since the plan usually does not have to pay your unsecured debts in full, you may end up paying a small fraction of the second mortgage through the plan. Upon plan completion, the remaining portion of the stripped-off second mortgage is discharged. In today’s housing market, this is a significant benefit to Chapter 13 that is currently not available under Chapter 7.

Law Offices of Nicholas Gebelt

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