Chapter 13 Bankruptcy lets you keep your assets and eliminate the debt that remains. With offices in Los Angeles and Encino we make it convenient to meet with a bankruptcy attorney for a free consultation - and begin planning your financial fresh start!

The various types of bankruptcy are named for the section or 'chapter' in the law that created them.

Chapter 13 Bankruptcy is a form of debt reorganization that gives you time to get back on your feet and save your most valuable property.

It was developed to give (non-incorporated) consumers with regular income more time to pay off their debts so they can keep their assets. It can be used to stop a foreclosure or seizure of your house or car. It can also help self employed persons continue to operate their small business.

Chapter 13 bankruptcy may allow you to discharge (i.e. eliminate) certain debts that would not be allowed under Chapter 7, such as:

• Junior liens (a second mortgage or line of credit) on real property, when the market value has fallen below the full balance owed to the first mortgage.
• Marital dissolution equalization payments.
• Court settlements and debts incurred by injury to another person or their property.

How Chapter 13 Bankruptcy Works

Your creditors are forbidden from contacting you from the moment you file your Chapter 13 Bankruptcy case in our office. Once approved, Chapter 13 Bankruptcy results in a payment plan over 36-60 months, usually with much lower total monthly payments than you now make.

Best of all, any unpaid debt is completely eliminated when the period of the Chapter 13 payment plan is finished. This can result in your paying only pennies on the dollar of your total outstanding debt, yet it completely halts the collection efforts of creditors.

Eliminate a Second or Third Mortgage in Chapter 13

If your home's value has dropped below the amount you owe on your first mortgage, we can petition the court to eliminate your second and third Mortgage. This could result in you only needing to pay off your first mortgage.

You Can Still Obtain Medical Care

Your ability to obtain medical care is NOT affected when you file for bankruptcy. You can still get the treatment that you need.

The Role of the Trustee

The court appoints an impartial Trustee to examine the records that we file on your behalf. Part of the trustee's job is to determine how much you can realistically pay back, without putting yourself at risk of further economic hardship. The trustee knows that it is in the best interest of the court and your creditors that you have a payment plan that will work.

Once a fair payment plan is set up, you make a single payment each month to the trustee, and that money is divided up among your creditors.

Each year you will be required to provide the trustee with a copy of your federal income tax return. Upon examination the trustee determines if your ability to pay has changed. The trustee has the authority to adjust your payment plan annually based on this information.

However, if your living expenses have also increased, we can file a revised estimate of your monthly budget and that will be taken into account.

As you can see, there are many factors that determine how your Chapter 13 Bankruptcy will work. To learn how it can be applied in your specific situation, contact our Chapter 13 bankruptcy attorney for a free consultation.