Life’s financial curveballs can often strike without warning, making it difficult for you to pay bills, debts, and meet other financial obligations. In challenging times like these, filing for bankruptcy remains one of the most feasible legal options that can address your financial struggles and help you achieve immediate debt relief. If you are going through financial adversity and thinking about filing for bankruptcy, it is imperative that you speak with a knowledgeable California Bankruptcy Attorney as soon as possible for proper guidance and adequate support.
At Duffy Law, I am committed to providing all of my clients with experienced legal counsel and guidance as they try to navigate the complexities of bankruptcy. As a skilled bankruptcy attorney, I can review every aspect of your case, discuss the unique details of your situation, and help you understand all of your available legal options. My goal is to provide you with the comprehensive legal counsel and support you need to make strategic financial decisions that can help you get the financial clean slate that you deserve.
For over a decade Duffy Law has been serving clients in Irvine, Corona Del Mar, Huntington Beach, Laguna Beach, and communities throughout Orange County, California.
Chapter 13 bankruptcy, often referred to as repayment plan bankruptcy, is a debt relief option that is available to individuals who are earning regular wages but are still experiencing financial hardship. It involves creating a repayment plan spread over three to five years to enable you to pay back your debts and get caught up on any past-due payments. Some of your unsecured debt may be discharged at the end of the Chapter 13 plan.
Chapter 13 may be the right debt relief option for you if:
You have non-exempt property that you intend to keep.
You have debt that can't be discharged, such as tax obligations, fines and penalties, and domestic support obligations.
You need enough time to recover on past-due payments.
You are late with your mortgage or car loan payments.
You have a co-debtor on a personal or consumer debt.
Here are some ways through which filing for Chapter 13 bankruptcy can help individuals:
It can afford you enough time to repay debts through a repayment plan.
It can allow you to reschedule your secured debts and extend them over the life of the plan.
It can give you the needed time to catch up on overdue payments and debts while retaining your assets.
It can allow you to discharge some unsecured debt at the end of the repayment plan.
It can help rebuild your credit score gradually over time.
It can allow you to obtain new credit lines between one and three years of filing.
Activates an "automatic stay" on your existing debts, which prevents debt collection, wage garnishment, and stops all creditor harassment.
Activates an "automatic stay," which prevents or delays an eviction, repossession, or foreclosure on your home.
Ensures that you do not have any direct contact with your creditors.
While a Chapter 13 plan can help individuals in several ways, there are some things it can't do. These include:
It will not allow any of your assets or property to be sold.
It will not relieve you of your alimony and child support obligations or payments.
It will not get rid of your student loan debt, except in some unique circumstances.
It will not alleviate any of your priority debts, including federal, state, and local taxes, fines, penalties, or criminal restitution.
Qualifying for Chapter 13 requires that your secured debts and unsecured debts are within a certain amount. Pursuant to U.S. Code Title 11 Bankruptcy Section 109 (11 U.S.C. § 109(e)), an individual with regular income, whether either self-employed or operating an unincorporated business, may be eligible to file for chapter 13 bankruptcy provided that the person’s unsecured debts are less than $394,725 and any secured debts are less than $1,184,200. Therefore, to file chapter 13 bankruptcy:
Your unsecured debts must be lower than $394,725.
Your secured debts must be lower than $1,184,200.
That said, it is important to keep in mind that these amounts are modified periodically to reflect any changes in the consumer price index.
Additionally, individuals filing for Chapter 13 will be asked to provide a certificate proving that they received the mandatory credit counseling education from a U.S Trustee approved agency in California. This counseling course will help determine the probability of you repaying your creditors using your income. You will also need to complete another debtor education course after filing.
As mentioned earlier, filing for Chapter 13 involves proposing a repayment plan. Before the California court can approve your plan, you must:
Be employed and earn enough income to cover the needed monthly payments
Be up-to-date on your income tax filings
Have sufficient disposable income to fully repay some of your debts
Be within the specified debt limitation amounts for secured and unsecured debts
The main aspect of any Chapter 13 case is the creation of a repayment plan. You need to propose your plan to your creditors and the court while taking into account all your debts. The bankruptcy trustee and your creditors will have the opportunity to review and make objections to your plan. After making all of the necessary adjustments needed to adhere to any objections raised, the California court will set up a confirmation hearing where your plan will likely be approved.
The purpose of the confirmation hearing is to certify that:
The repayment plan is feasible
The repayment plan meets the terms and conditions of bankruptcy law
The debtor proposed the repayment plan in good faith
Filing for bankruptcy is a common occurrence in California. According to the American Bankruptcy Institute, there were 69,432 bankruptcy filings in California in 2019 alone. Of these, about 15,861 were Chapter 13 cases. If you are considering filing for Chapter 13 bankruptcy, it is crucial that you consult with an experienced California bankruptcy attorney who can protect your rights and provide detailed guidance at every step along the way.
At Duffy Law, I have dedicated my career to providing reliable and comprehensive legal guidance to clients facing bankruptcy-related legal matters. As your attorney, I will assess the unique circumstances of your case, help you understand all of your legal options, and help you determine whether Chapter 13 is the right debt relief option for you. My priority for all of my clients is to offer the detailed legal counsel and support they need to successfully navigate all of the complexities surrounding Chapter 13 bankruptcy. No matter what your situation may be, you don’t have to face this challenge on your own. Reach out to my office today to get the reliable legal guidance and support you need.
If you're going through financial hardship and considering filing for bankruptcy, don't do it alone. Contact Duffy Law today to schedule a free one-on-one case assessment. I can offer you the comprehensive legal counsel and advocacy you need to make strategic decisions that can help you work toward the financial freedom you deserve. I proudly serve clients in Irvine, Corona Del Mar, Huntington Beach, Laguna Beach, and communities throughout Orange County, California — so call today and take your first step toward a fresh start.