FAQ
Want to know more about Chapter 13 Bankruptcy?
I often get questions from clients about the difference between Chapter 7 and Chapter 13 Bankruptcy. While Chapter 7 Bankruptcy is a liquidation bankruptcy where your debts are generally discharged in 4 months, Chapter 13 consists of your debts being reorganized in a 3 or 5 year repayment period. I can help you develop a repayment plan, and over a period of a few years, you will make monthly payments based on the terms of the plan until your remaining debts can be discharged.
The automatic stay, which stops all creditors and debt collectors from taking further action once you file for bankruptcy, will also stop the foreclosure process. I want to emphasize that although the automatic stay applies in any consumer bankruptcy case, it can be especially helpful for avoiding foreclosure in Chapter 13. Your repayment plan terms can allow you to get caught up on mortgage payments
I speak with a lot of consumers in Southern California who are concerned about their eligibility for bankruptcy. It can sometimes be difficult to qualify for Chapter 7 Bankruptcy if your household income is too high, have a lot of assets that cannot all be protected, or have more equity in your home than can be protected. However, most people in this situation qualify for Chapter 13. The only potential issue is that there are debt caps in a Chapter 13 Bankruptcy. I can discuss those debt limits with you and help you consider your options if you are not eligible for Chapter 13 protection.
