Typical Chapter 13 Bankruptcy Case in California

Chapter 13 bankruptcy in California allows for individual and business debtors to reorganize debts in situations when the debtors overall debt is excessive, yet the individual or business still wishes to retain some assets or has a moderate income.

California Chapter 13

Each bankruptcy case is different, so your case may include some of the following issues and not others. A California Chapter 13 bankruptcy provides the following benefits to debtors:

• Chapter 13 allows debtors to retain some property while erasing some debts;
• The debtor will have a repayment plan under which remaining debts will be consolidated, allowing the debtor to pay off the debts over a three to five year period.
• Debtors who do not meet income limits under Chapter 7 bankruptcy may be eligible for partial debt discharge under Chapter 13.
• Businesses who wish to continue operation, but need to restructure can use Chapter 13 to find relief.
• Filing Chapter 13 will eliminate the harassing phone calls of creditors immediately. Once creditors are notified, they must cease contact until your bankruptcy case is finalized.
• Depending on the retail value of your property, junior property liens may be discharged or reduced through Chapter 13.

A lawyer can help you assess your debt situation and which of your debts will likely be discharged in Chapter 13, what your likely payments will be based on your income and assets as well as other factors you may wish to consider.

Most California debtors who chose Chapter 13 over Chapter 7 do so because of one of the following reasons:

• The debtor has non-exempt property the debtor wishes to protect from the bankruptcy. In Chapter 7, assets such as real property or valuable personal property can be liquidated to pay off creditors. Chapter 13 allows debtors to keep a specified amount of property.
• The debtor's income exceeds the California allowable maximum under Chapter 7 bankruptcy, preventing the debtor from receiving debt relief under Chapter 7.

Getting Legal Help

Filing for Chapter 13 bankruptcy in California is complicated because you must fill out paperwork properly and a host of other legal requirements. Getting legal help when you are contemplating Chapter 13 can set your mind at ease. A California bankruptcy attorney will help you file your case if bankruptcy is the best option for you. You will not have to stand alone in court and an attorney will make your case simple for you.