Chapter 13 Bankruptcy Lawyers

San Francisco, San Jose, Oakland, Sacramento, Santa Clara

A Chapter 13 Bankruptcy is a common bankruptcy only available to consumers and not businesses. A Chapter 13 Bankruptcy results in a payment plan that allows you to repay some of your debt over 3 to 5 years. For example, you could make up missed mortgage or car payments to get current without penalties. Also, you may pay just pennies on the dollar for the other debt that you owe.

Most importantly, the Chapter 13 Bankruptcy allows debtors to retain their property. Under the right conditions, certain debts, like second mortgages and liens on real property may be stripped away. Contact us for an appointment to discuss your situation.

That’s great, how do I know if I qualify for a Chapter 13 bankruptcy?
Chapter 13 Bankruptcy has a income test or the “means test.” That means you must have a certain income level to qualify. Also, you cannot have more than $336,900.00 in unsecured debts (not tied to property, such as credit card debt) or more than $1,010,650.00 in secured debts (such as mortgages). Contact us for an appointment to discuss your situation.

Are there any restrictions on who may file for a chapter 13 bankruptcy?
The only real barrier to a bankruptcy, besides having too much money, is if you had previously filed a bankruptcy. For example, you cannot file for any bankruptcy if a prior bankruptcy was filed within 180 days and it was dismissed for failure to appear by the debtor, failure to comply with court orders by the debtor, or was voluntarily dismissed. There are also residency restrictions as to where you can file bankruptcy. Contact us for an appointment to discuss your situation.

Can businesses file for Chapter 13 bankruptcy?
No. Chapter 13 Bankruptcy is limited to individuals. However, if you have business debt that you personally guaranteed or ran a sole proprietorship, then we can add that debt into the bankruptcy.. Contact us for an appointment to discuss your situation.

Can I keep my house?
Yes, if you can make the current mortgage payments then the Chapter 13 Bankruptcy will give you payment plan to make up missed payments up to the Bankruptcy filing date. The makeup payments are repaid without interest. Contact us for an appointment to discuss your situation.

Can I keep my car?
Yes, if you can make the current car payments then the Chapter 13 Bankruptcy will give you a payment plan to make up missed payments up to the Bankruptcy filing date. The makeup payments are repaid without interest. If the car loan is older, then the Bankruptcy Court may reduce the loan amount to the value of the car. Contact us for an appointment to discuss your situation.

What property can I keep in a Chapter 13 bankruptcy?
You can keep all your property, if that is what you want. Chapter 13 bankruptcy is different from a Chapter 7 because it does not call for liquidation to pay off debts. Instead, the Bankruptcy Court will require a 3 or 5 year payment plan from your regular income. Contact us for an appointment to discuss your situation.

What is a lien stripping or cram down?
Lien stripping and cram downs are available in Chapter 13 Bankruptcy but not in Chapter 7 Bankruptcy.

Lien stripping is a legal mechanism to remove liens on real property. Take for example a home currently valued at $300,000.00., with a first mortgage of $350,000.00, and a second mortgage of $50,000.00. The first mortgage is secured because it will receive some of its money back if the house should sell. The second mortgage is not “secured” because the property does not have any equity to give the lender money. In this case, the second lender may be treated as an unsecured creditor to get pennies on the dollar.

A cram down is a legal mechanism to reduce a secured loan amount. For example, a car loan may be reduced to the current market value of the car under the right conditions. The cram down is not automatic and requires a court appearance to explain the situation to the Judge unless the lender agrees to the cram down. Once successful, the cram down may also result in lower monthly payments. Contact us for an appointment to discuss your situation.

What is a repayment plan in a Chapter 13 bankruptcy?
Under a Chapter 13 Bankruptcy the government wants you to come up with a plan to repay some of your debts. The plan is based mostly on your income because the government wants you to be able to succeed in your plan, not fail. Alternatively, your plan must cover at least as much as the value of your non-exempt assets if they were sold.

In the plan, your debts will be paid by priority. First priority goes to taxes, domestic support obligations, secured debts, trustee and attorney fees. Finally unsecured claims are paid last (usually just in part).

Under the repayment plan, the debtor makes a one payment to the bankruptcy trustee, and the trustee makes distributions to your creditors which makes life a lot easier. Contact us for an appointment to discuss your situation.

Now that I have filed, how am I protected?
Once a case is filed, the “Automatic Stay” goes into effect immediately. This is the most powerful rule in bankruptcy as the automatic stay prohibits foreclosures, creditor harassment, wage garnishments, law suits and repossessions. That means creditors cannot call you, lawsuits must stop, and no repossessions are allowed without the Court’s explicit approval. Contact us for an appointment to discuss your situation.

Now that I have filed, will I have to go to Court?
Once your case is filed, the court will set and notice a 341 Meeting of Creditors date to take place approximately 30-45 days from the file date. This is a mandatory meeting gives the Trustee and the creditors an opportunity to ask questions about the debt incurred and inquire about the Debtor’s assets and financial history.

Not to worry, these meetings are usually extremely short (about 10 minutes) and we rarely see any creditors show up. An Attorney will be present with you at the meeting and you will need to bring a valid driver’s license and your social security card.

Then you must complete the Financial Management Course. The Financial Management Course is required for discharge and must be filed in a timely manner to avoid the case being closed without a discharge. The course is usually taken online just like the class you took before we filed. Contact us for an appointment to discuss your situation.

Now that I have filed, what should I expect?
Upon filing your petition, the court will appoint a Trustee to your case. Creditors are given some time to object to your bankruptcy or to file a claim to be part of the payment plan. Once the objection to dischargeability deadline or the proof of claim deadline date has passed, your bankruptcy plan will be confirmed. When you have made all of your payments, the Court will send you a notice of discharge to show that your bankruptcy has finished. Contact us for an appointment to discuss your situation.

After the bankruptcy, are all my debts discharged?

There are certain unsecured debts that are non-dischargeable such as:

• Domestic support obligations
• Student loan debt
• Mortgages or car payments that extend beyond 5 years in repayment terms
• Debts that the bankruptcy court has ruled in this case are not discharged

I got my discharge but the creditor is still calling, help!
You may have post discharge violation! Please go to our post-discharge violation section for more information.