When Is Filing Chapter 13 Bankruptcy The Best Option?
Los Angeles, CA — 08/13/2019 — Chapter 13 attorneys have a very important job: to help a person to save their home and car after they fall behind on payments. If someone has missed a single car payment, even if they are just a few days late, it is possible for the finance company to repossess the car.
If someone has missed more than 3 mortgage payments, the home lender will start the foreclosure process to sell the home. The best way to stop foreclosure and save a home is to file chapter 13 bankruptcy. The same is true for repos – Chapter 13 stops a car repo dead in its tracks.
How Does Chapter 13 Bankruptcy Work?
Chapter 13 bankruptcy is similar to the more common Chapter 7 bankruptcy because it usually gets rid of credit card debt, medical bills, old IRS debt, and prior court judgments such as liens and wage garnishments. Filing Chapter 13 differs from Chapter 7 by allowing a person to keep their car and their home [as well as personal belongings and savings] through a payment plan designed to pay back any amount of missed payments.
Chapter 13 attorneys are specifically trained to evaluate when to recommend Chapter 7 or Chapter 13, but the rule of thumb is simple: in order to save a home from foreclosure and a car from repossession, the consumer will need to have enough income to resume making monthly payments, plus he or she needs to have enough income to pay back the missed payments in a payment plan spread out over the next 3-5 years. This is called the “means test,” and it is important for Chapter 13 attorneys to calculate income and expenses to prove to the court that a person qualifies for chapter 13.
Who Should File Chapter 13 Bankruptcy?
According to bankruptcy lawyer Matt Faler, “you can and should file chapter 13 bankruptcy when you have fallen behind on mortgage and car payments, and you have the income to get back on your feet and pay back the missed payments over time.”
“Chapter 13 bankruptcy is a very good idea for a person that had a temporary setback, like a job loss, or sickness, or sudden unexpected expenses like a lawsuit or judgment, and that setback caused a huge burden, and made it impossible to pay for necessities like the mortgage or car payment.” Matt Faler recommends that “once you are back to work and make a steady income, chapter 13 is usually the best way to wipe out credit cards and medical bills and to get caught up on the mortgage and car payments.”
Consumer Action Law Group offers free legal advice for anyone who needs help with bankruptcy. Call 818-254-8413 for a free case evaluation.
About Consumer Action Law Group
Consumer Action Law Group is a law firm dedicated to helping individuals in consumer-related matters such as fraud and scams by lenders, car dealers, credit card companies, and employers. Attorneys on the team are knowledgeable and experienced in the areas of eliminating debt, mortgage fraud, auto fraud, as well as home foreclosures. They have experience in consumer fraud matters to defend consumers who are facing financial hardship, foreclosure, and fraud.
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