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Selecting Chapter 13 Bankruptcy to Protect Assets

Chapter 13 bankruptcy proceedings allows debtors to pay back some of their debt on a more relaxed schedule. However, because this type of bankruptcy allows creditors to recover a portion of the money owed, not everyone is allowed to file Chapter 13 bankruptcy. In order to be eligible for Chapter 13 proceedings, your Bay Area bankruptcy attorney will be required to establish that you have a steady source of income, since reliable income is necessary for the long-term planning and repayment schedules – typically 3 to 5 years –set up under Chapter 13 procedures.


Income Eligibility for Chapter 13


Debtors will also need to establish that at least some of their income is disposable. In other words, if you need all of your income to cover your basic necessities like groceries, rent and utility bills, Chapter 13 bankruptcy may not be right for you.


California provides a test to determine whether debtors’ means make the requirements for Chapter 13 versus Chapter 7 bankruptcy procedure. Your bankruptcy attorney in the Bay Area can look at your debts and expenses relative to your income in order to determine your eligibility for Chapter 13 filing.


Who Can Benefit From Choosing Chapter 13 Bankruptcy?


Because Chapter 13 bankruptcy does not allow debtors to discharge all of their debts from the beginning, it may not initially seem like the most attractive option for debtors. However, Chapter 13 proceedings do provide unique benefits that Chapter 7 bankruptcy cannot match. Some of the debtors who stand to benefit most from selecting Chapter 13 bankruptcy include those debtors who want to keep their homes, valuables and investments.


Homeowners in California Who Wish to Keep Their Home


Chapter 13 bankruptcy proceedings can help homeowners who wants to keep their home or who have substantial equity in their home, under California Code Section 704.710-704.850. Whether you are behind in mortgage payments, or already undergoing foreclosure, your California bankruptcy attorney can advise you regarding how or whether Chapter 13 bankruptcy can help you save your home, and how any equity you may have in your home will be affected.


Owners of Valuable Nonexempt Property


While California has strict lists covering which property is exempt from sale to pay creditors under Chapter 7 bankruptcy, Chapter 13 bankruptcy allows debtors to keep most of their property, including nonexempt property – though the values of the nonexempt properties may be used in determining the amount of repayment owed.


Some examples of nonexempt property that a Chapter 7 trustee may sell to pay a debtor’s creditors include but are not limited to:


  •         Expensive collections, such as stamps, coins, antiques, etc;
  •         Pricey family heirlooms;
  •         Valuable musical instruments;
  •         Vacation homes;
  •         Investments or accounts that can be cashed in, such as stocks, bonds, bank accounts, savings,  stocks, bonds, etc.;
  •         Vehicles exceeding one per family;
  •         Vacation homes or second residences.


How Can a Chapter 13 Bankruptcy Attorney in California Help?


If you own valuable property that would not be exempt under Chapter 7 bankruptcy filing, your bankruptcy lawyer can advise whether Chapter 13 proceedings would be a viable alternative. Because the type and value of assets you possess make such a difference in choosing the right bankruptcy process, it is important to be upfront with your bankruptcy lawyer about your property.
Your bankruptcy attorney at the Law Office of Melanie Tavare can help you decide whether you would rather use the proceeds of the sale of your assets to pay your creditors and discharge your debts quickly, or whether keeping your property in the long-term is your priority.


"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


"I can't thank Melanie enough for helping me through a challenging process and doing so with incredible knowledge, professionalism and tenacity! She went to great lengths to keep me informed, she responded quickly to my questions, and communicated in terms that I could understand. I highly recommend getting in touch with Melanie should you have the need."


"Choosing to work with Atty. Melanie has been one of the best decisions I've ever made. She was a very patient professional to work with and attentive while providing valuable solutions to all of my concerns. If you are searching for of an Attorney who is knowledgeable, transparent, and diligent - well that's Atty. Melanie."


"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."