Our Chapter 13 attorneys file bankruptcy to stop foreclosure, stop repossession of your vehicle, eliminate credit card debt, and get rid of your medical bills. Filing chapter 13 bankruptcy helps individuals with a steady income to keep their home and car[s] and repay their mortgage and auto debt over time.
If you have fallen behind on the mortgage or car loan, a chapter 13 bankruptcy is a way to create a payment plan to catch up on missed payments over three to five years, while cutting credit card debt, medical bills, and even old IRS debt. Contact our chapter 13 attorneys in Los Angeles if you are having a hard time paying off your debt and need more time and an affordable payment plan.
Advantages of Filing Chapter 13 Bankruptcy
One advantage of filing chapter 13 bankruptcy is that you will have more time to pay off your creditors. The primary purpose of chapter 13 is to give people a chance to catch up on their payments.
If you are behind on your mortgage payments, filing the chapter 13 bankruptcy immediately stops the foreclosure process. If you fall behind on car payments, chapter 13 will also stop any repossession attempts on your vehicle.
Similar to chapter 7, filing chapter 13 can eliminate credit card debt and medical bills. If the payments for your credit card debt and medical bills are too high, chapter 13 may wipe out the balances.
1. Stop Foreclosure and Catch Up on Payments
Filing a chapter 13 bankruptcy will immediately stop any foreclosure proceedings on your home. This means that you will not have to worry about losing your home because of missed payments. Instead, you can continue to pay off your mortgage and catch up to pay the missed payments through a repayment plan. The duration and the payment amount will depend on your income.
If your foreclosure sale date is coming up soon, you should get help from a chapter 13 bankruptcy attorney immediately to make sure that the paperwork is filed timely and correctly. If you file the bankruptcy paperwork after the bank completes the foreclosure sale, you will not be able to save your home.
2. Stop and Prevent Repossession of Your Vehicle
If you have missed payments on your car and are afraid of having it repossessed, chapter 13 bankruptcy will stop and prevent any repossession attempts by the lender. This is true as long as you are under the protection of a court-approved chapter 13 repayment plan.
If the lender already repossessed your car before you were able to file chapter 13 bankruptcy, you may still be able to get it back by including the arrearage in your repayment plan. If this is the case for you, speak with our chapter 13 attorneys to discuss your options.
3. Eliminate Credit Card Debt and Medical Bills
Under chapter 13 bankruptcy, credit card debt and medical bills are considered “unsecured debts.” This means that there are no collateral if you are no longer able to repay the debt. For example, there are no properties or assets that a lender can repossess if an individual does not their credit card debt. For this reason, unsecured debts are the least prioritized in a chapter 13 repayment plan.
In a chapter 13 bankruptcy, unsecured debts are usually not repaid in full. This is because they are prioritized in payments after paying off the secured debt (i.e. mortgage and car payments). The amount of credit card and the medical debt you repay depends on your ability to pay.
For example, let’s say that you are able to make $40,000 in payments during your repayment period. If the secured debt payments add up to $30,000 and unsecured debt payments add up to $20,000, this means that there is $10,000 leftover in the amount of unsecured debt. This $10,000 will be discharged, meaning that you will not be responsible for repaying that amount.
For this reason, many individuals who file chapter 13 bankruptcy in Los Angeles don’t have to pay off all of their credit card and medical bills.
Is It Worth Filing Chapter 13 Without an Attorney?
Some may want to file chapter 13 without an attorney because of the amount of money involved in hiring a chapter 13 attorney. While saving money filing chapter 13 may sound tempting, it is what caused many people to lose their home and fall further behind in debt. The main reason for this is due to a large number of procedures to follow and hearings to attend. Some of these involve:
- Providing proper notice to creditors,
- Showing up at creditors’ meetings and hearings,
- Following local procedures,
- Filing all forms and statements on time.
If you fail to file chapter 13 properly, the court will dismiss your case. This means that you will have spent time, money, and effort just to be stuck in the same spot. Or you might end up in a worse situation since you would not have made payments while filing for bankruptcy.
Our chapter 13 bankruptcy attorneys have filed chapter 13 hundreds of times and know how to bring the best results for our clients. You can speak with our bankruptcy attorneys for a free case evaluation to see if filing chapter 13 is a good option for your case.
Chapter 13 Attorneys Los Angeles – Free Consultation
If you are having difficulty making payments on your debt, our chapter 13 attorneys in Los Angeles can make repaying your mortgage, car, credit card, and medical bills more affordable. We help our clients save their home and car and come up with a more affordable repayment plan that is adjusted to their income.
Call 818-254-8413 to speak with a chapter 13 bankruptcy attorney to see if filing chapter 13 is the best option for you. The consultation is free!