Filing for Chapter 13 Bankruptcy

Oakland Chapter 13 Bankruptcy Filing Attorney

A common misconception of bankruptcy is that it is only for people with little or no income. On the contrary, Chapter 13 Bankruptcy is a great option for people with some income who have simply become overwhelmed with debt. Debtors can use Chapter 13 to reorganize their finances, get rid of some of their debt, and achieve a fresh financial start.

Chapter 13 Bankruptcy – The Basics

Unlike Chapter 7 Bankruptcy in which a debtor sells all of his or her assets to pay off their debts, Chapter 13 Bankruptcy involves a reorganization of the debtor’s finances. One of the most important parts of Chapter 13 is developing a payment plan. The plan must detail how you propose to pay back some of your debts during either the next three or five years. Under the plan, you will make monthly payments to the bankruptcy trustee, who will then disburse or distribute the payments to your creditors.

After successful completion of the payment plan, any remaining unsecured debts will be forgiven. These debts can include:

• Medical bills;
• Credit card debt;
• Personal loans or other unsecured loans;
• A lien, such as a second mortgage, that is not secured by any property value; and
• Unpaid utility bills.

Certain kinds of debt, such as child support and alimony, are priority debts. These generally cannot be wiped away in bankruptcy.

Filing for Chapter 13 Bankruptcy

Qualifying for Chapter 13

In order to qualify for Chapter 13, you must have sufficient income to be able to pay at least as much to your creditors as they would have received during Chapter 7 Bankruptcy. However, these payments can be stretched over 3 or 5 years, so it is also important that your income is steady. To this end, you must be current on your income tax filings and submit tax returns for the four years prior to your bankruptcy in order to qualify.

There are also two limits that can prevent people from filing for chapter 13: your secured debts must not be more than $1,149,525 and your unsecured debts must not be more than $383,175,

Filing for Chapter 13

Filing for Chapter 13 Bankruptcy is not a hugely complex process, but it does involve significant attention to detail. If you fail to satisfy a requirement or make a mistake on one of the bankruptcy forms, your bankruptcy could be dismissed by the judge for being in bad faith. The following are some of the steps for filing for Chapter 13:

1. Credit counseling – you must first receive credit counseling from an approved agency;
2. Filing for bankruptcy – the actual filing involves the submission of the bankruptcy petition, accompanied by forms which document your income, debts, and other financial information. Likewise, you will need to develop a payment plan to submit.
3. Meeting with the creditors – after you file for bankruptcy, you must meet with the trustee and creditors in a “341 hearing” to review your case.
4. Successful completion of the payment plan – if your bankruptcy petition is approved, you must make monthly payments for 3 years of 5 years to complete the bankruptcy.

Contact an Attorney with Chapter 13 Experience

Filing for bankruptcy can be an intimidating prospect, but you are not alone. The Law Offices of Melanie Tavare are proud to serve Oakland, San Leandro, and other areas in the San Francisco Bay area. If you are considering filing for Chapter 13 Bankruptcy, contact us for advice and help throughout the filing process. You can call us at 510-255-4646 or contact us online today.

The Law Offices of Melanie Tavare are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.