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Chapter 13 Bankruptcy Attorney, Rick Baum, in Los Angeles, CA

 

What is Chapter 13 Bankruptcy?

Typically, referred to as a wage earner's plan, Chapter 13 bankruptcy helps those who don't qualify for Chapter 7 bankruptcy reorganize their debt. Payments are made over the course of several years, and any remaining outstanding balances may be forgiven. While you still have to make payments to creditors, you often get to keep your house, car or other assets while payments are being made.
 
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The Benefits of Chapter 13 Bankruptcy

There are two primary benefits of choosing Chapter 13 bankruptcy. First, if you have a second or third mortgage on your home, those liens may be stripped. This means that the lienholder no longer has an interest in the property, and you are no longer required to pay those creditors. You may be entitled to strip liens from your home as long as the value of your home is less than what you owe on your first mortgage.

The other benefit is that you get an automatic stay of all creditor contact. What this means it that creditors can no longer call you or send collection letters. The stay will generally be kept in force as long as you make you repay creditors as agreed and otherwise comply with bankruptcy court orders.

What to Remember When Filing for Chapter 13 Bankruptcy

It is important to remember that Chapter 13 bankruptcy will not eliminate all of your debts. If you have student loan debt, owe back taxes or back child support, that debt will still need to be repaid. You should also be aware that you may not be able to obtain new credit without the court's permission until your prior debts are discharged.
If you think that Chapter 13 bankruptcy may be for you, give Rick a call today for a free consultation.