Chapter 13 Bankruptcy

If you’re dealing with financial difficulties in Santa Rosa, CA, Chapter 13 bankruptcy could offer a way to regain control of your financial future. However, bankruptcy law can be complex, which might overwhelm an average person. That’s why seeking guidance from an experienced Santa Rosa, CA, Chapter 13 attorney is vital to help you navigate this intricate process successfully.

Embolden Law PC aims to provide you with a clear understanding of Chapter 13, including what it encompasses and doesn’t cover. To assist you further, our knowledgeable firm has compiled comprehensive information about Chapter 13 here for your convenience. In this article, we’ll simplify Chapter 13 bankruptcy, delve into its key aspects, and stress the importance of partnering with our lawyer to secure a fresh financial start.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, or the “wage earner’s plan,” offers a debt restructuring solution that permits individuals to repay their debts gradually within three to five years. The specific duration depends on their income and overall financial circumstances.

In contrast to Chapter 7 bankruptcy, which entails selling off assets to satisfy creditors, Chapter 13 prioritizes the development of an achievable repayment strategy while safeguarding your assets. This approach is advantageous for individuals with steady incomes who aim to shield their properties and possessions from the risk of being liquidated.

Who Can Be Eligible for Chapter 13 Bankruptcy?

Chapter 13 bankruptcy benefits those struggling financially in Santa Rosa, CA, but not everyone qualifies. Several prerequisites must be met:

• Steady Income: Eligibility hinges on consistent income, whether derived from employment, self-employment, or another reliable source. Chapter 13 primarily caters to individuals with regular earnings.
• Debt Limits: Specific debt thresholds govern Chapter 13 filings. Your combined secured and unsecured debts should be under $2,750,000 when initiating bankruptcy proceedings, with adjustments to these limits over time to account for inflation.
• Prioritizing Specific Debts: A willingness and capability to prioritize specific obligations, such as mortgage arrears, tax debts, and domestic support payments, within your repayment plan, are essential.
• Credit Counseling Completion: Before filing, mandatory credit counseling through an approved agency must be completed within 180 days.
• Previous Bankruptcy Discharge: If you’ve previously received a bankruptcy discharge, a waiting period might apply before you can file for Chapter 13 again.

Meeting these criteria is crucial to qualify for Chapter 13 bankruptcy and gain debt relief benefits.

What are the Benefits of Chapter 13 Bankruptcy?

Chapter 13 bankruptcy presents numerous advantages for individuals struggling with financial difficulties:

• Debt Repayment: Chapter 13 permits the restructuring of debts into a manageable repayment plan, providing an opportunity to catch up on overdue payments, address priority debts like mortgages and taxes, and alleviate the burden of unsecured debts, such as credit cards.
• Asset Protection: In contrast to Chapter 7, where assets may be sold to satisfy creditors, Chapter 13 safeguards your property and assets while adhering to the repayment plan.
• Creditor Protection: Initiating Chapter 13 triggers an automatic stay, halting creditor actions like lawsuits, wage garnishments, and foreclosure proceedings, delivering immediate relief from financial pressures.
• Flexible Terms: Repayment plans are custom-tailored to align with your income and expenses, providing flexibility and enhancing your prospects for success.
• Debt Discharge: Upon successfully concluding the repayment plan, you may receive a discharge of any remaining unsecured debts, liberating you from these financial obligations.
• Credit Score Improvement: While Chapter 13 bankruptcy record remains on your credit report for seven years, it may be viewed more favorably than Chapter 7. Moreover, you can initiate the process of rebuilding your credit immediately.

What is Not Covered in Chapter 13 Bankruptcy?

While Chapter 13 bankruptcy provides substantial debt relief and safeguards assets, it’s essential to recognize that some responsibilities and debts remain unaffected:

• Specific Tax Debts: While some tax debts may be included in a Chapter 13 plan, non-dischargeable tax obligations (e.g., recent income taxes and tax lien) must be settled completely outside the plan.
• Child Support and Alimony: Debts linked to child support and alimony obligations cannot be discharged or integrated into a Chapter 13 plan; these payments must adhere to court orders.
• Criminal Fines and Restitution: Debts arising from criminal fines or restitution orders cannot be discharged and must be paid in full outside the bankruptcy process.
• Student Loans: Generally, student loans are not dischargeable in bankruptcy, including Chapter 13, unless you can prove “undue hardship” through a separate legal process.
• Secured Loans with Surrendered Collateral: Surrendering collateral (e.g., a vehicle or property) in Chapter 13 may not absolve you of any remaining balance after the collateral’s sale.
• Debts Incurred After Filing: Debts accrued after initiating Chapter 13 bankruptcy are not encompassed within the bankruptcy process and must be managed separately.

What is the Process for Filing Chapter 13 Bankruptcy in Santa Rosa, CA?

Initiating Chapter 13 bankruptcy in Santa Rosa, CA, entails a structured legal procedure designed to assist individuals in reorganizing their debts while safeguarding their assets. Here’s an outline of the fundamental steps in the Chapter 13 bankruptcy filing process:

• Consultation with Legal Counsel: Typically, the journey begins with an initial meeting with an experienced Santa Rosa, CA, Chapter 13 attorney. They assess your financial situation, offering advice on whether Chapter 13 is suitable. They’ll also aid in gathering necessary documents.
• Credit Counseling: Before filing, you must complete a credit counseling program through an approved agency. This step offers financial education and explores potential alternatives to bankruptcy.
• Filing the Petition: With your lawyer’s guidance, you’ll compile and submit a bankruptcy petition, along with supporting documentation and schedules, to the appropriate federal bankruptcy court in Santa Rosa, CA.
• Automatic Stay: Upon filing, an automatic stay becomes effective, halting creditor collection efforts, such as lawsuits, wage garnishments, or property seizures.
• Development of a Repayment Plan: Collaborating closely with your attorney, you’ll craft a comprehensive repayment plan delineating how you will settle your debts over a defined period, usually three to five years. The plan prioritizes essential debts and proposes manageable monthly payments.
• Confirmation Hearing: A court hearing is scheduled to review and approve your repayment plan. While creditors can raise objections, your attorney will address their concerns and work toward a viable plan.
• Monthly Payments: You need to make consistent payments to a bankruptcy trustee, who will then distribute these funds to your creditors according to the approved plan.
• Financial Management Course: Before receiving a discharge, you must complete a financial management course to enhance your financial literacy and decision-making skills.
• Discharge: Upon successfully fulfilling your repayment plan, any remaining eligible unsecured debts are discharged, offering you a fresh financial beginning.

Call Our Santa Rosa, CA, Chapter 13 Attorney Today! 

Chapter 13 bankruptcy is a practical way to regain financial stability while safeguarding your belongings. However, the process can be tricky, filled with legal details that might be tough to navigate alone.

For the best chance of success, it’s crucial to team up with our experienced Santa Rosa, CA, Chapter 13 lawyer at Embolden Law PC. We’ll guide you through every step, ensure you meet all legal requirements, and assist you in achieving the fresh financial start you need and deserve.

Our law firm also provides other legal services, including Chapter 7 and Chapter 11 bankruptcy, family law, employment law, financial disputes, real estate law, and litigation. Don’t face the complexities of Chapter 13 bankruptcy or other legal matters alone. Contact us now for a free phone call with our attorneys and take the first step toward a brighter financial future!