Chapter 13 Bankruptcy Attorney in Orange County
Chapter 13 bankruptcy is for people who don’t qualify for Chapter 7, or for people with a home, cars, and other assets you want to keep. Chapter 13 bankruptcy allows you to create a repayment plan that gives you protection and TIME to ‘catch up’ payments over 3 to 5 years. Call Michael Franco (714) 252-6268 for Free phone consultation, or to schedule a sit-down consultation.
Residents in Orange County California considering Chapter 13 Bankruptcy, will want the most experienced attorney possible assisting them. There are a lot of moving parts in a Chapter 13 bankruptcy when compared to a Chapter 7 bankruptcy.
Michael D. Franco, is a Board-Certified Specialist in Bankruptcy Law. Filing a Chapter 13 bankruptcy is a serious decision and you don’t want a ‘general law,’ or less experienced lawyer assisting you.
Call Michael at (714) 252-6268 to discuss your situation today. Orange County bankruptcy attorney, Michael D. Franco, will personally review your financial situation to determine if Chapter 13 is right for your financial situation and goals.
Common Reasons for Filing a Chapter 13 Bankruptcy:
- To stop home foreclosure. You can save your home and ‘catch up’ on past due mortgage payments over 36 to 60 months. If your home loan becomes due during the Chapter 13 process, your repayment plan can provide for payment of entire debt.
- To strip off a 2nd trust deed (or other junior liens). If the value of your home is less than the 1st trust deed balance, a Chapter 13 bankruptcy can strip off a 2nd trust deed and other junior liens once the plan is completed.
- For those who earn too much income to pass the “means test” for Chapter 7, you can file Chapter 13 and likely discharge a some of your unsecured debt.
What is Chapter 13 Bankruptcy
For individuals who don’t qualify for Chapter 7 “liquidation” bankruptcy, or for people who have important assets that they want to keep and protect, Chapter 13 “reorganization” bankruptcy should be considered. Chapter 13 bankruptcy allows you to create a ‘workable’ debt repayment plan that will give you protection and significant TIME to ‘catch up’ payments and debts over a 36 to 60-month period.
Chapter 13 bankruptcy is also known as “reorganization” or “wage-earners” bankruptcy. Chapter 13 bankruptcy provides an individual the ability to get that fresh start that the U.S. Congress intends through the bankruptcy laws, but you are required to pay off some of most outstanding debts.
Chapter 13 is only available for individuals who have a regular income necessary to fund a monthly payment plan. Your income must be enough to cover regular monthly living expenses and have some left-over funds that can be applied to the repayment plan. The payment plan is something that we would devise in my office (or remotely by phone and email if travel is an issue for you).
When the payment plan is drafted and you agree it is “workable,” I will present your plan to the bankruptcy Court seeking their approval. The payment plan reorganizes your debt obligations to your creditors such that over time (without any harassment) you can ‘catch-up’ payments or even pay off some debts. So long as you maintain your monthly payment plan, you may not have to repay the full amounts of your debt. Payment plans can be approved for either a three-year or five-year commitment.
When you are unable to pay down your debt fast enough to stop creditor calls, creditor lawsuits, wage garnishments, car repossession, or home foreclosure, a Chapter 13 bankruptcy might be the solution you need.
Automatic Stay STOPS Creditors, Garnishments, Repossessions & Foreclosure
When you file for any chapter of bankruptcy, an “automatic stay” goes into effect. The ‘automatic stay’ STOPS all creditors from trying to collect from you, stops creditor harassment and can even stop a home foreclosure. Creditors can no longer call your home, garnish your wages, or continue civil lawsuits.
All creditors must STOP harassing you, or any collection activities whatsoever! An ‘automatic stay’ will:
- STOP bill collectors from calling you.
- STOP any foreclosure that was in process.
- STOP any creditors lawsuits.
- STOP wage garnishment.
- STOP auto lenders or car dealers from repossessing your car.
- STOP IRS or State of California FTB tax collections efforts.
More About Chapter 13 Bankruptcy
Chapter 13 is intended to help consumers who own their own home or have other assets which secures debt. Oftentimes a consumer comes to us to explore bankruptcy, but they own property which would be lost if they were to file a Chapter 7 bankruptcy because that property would be considered “non-exempt” property in a Chapter 7 bankruptcy. We are often contacted at the last possible moment –and that’s okay– when consumers are being threatened with repossession of automobiles or home foreclosure. In both cases the car or home is the “collateral” for their debts.
Fortunately, in Chapter 13 bankruptcies, a consumer keeps all his or her property, NO MATTER if the property is considered “exempt” or not. That is the primary advantage of a Chapter 13 bankruptcy. If you own your own home with more than $50,000 of equity, you could be in jeopardy of having the trustee (the attorney who works for the Bankruptcy Court) force the sale of your home if you were to file for a Chapter 7 bankruptcy. That awful outcome will not happen in a Chapter 13 bankruptcy. You can keep all your assets (including your cars and your home), whether they are exempt or not, in a Chapter 13 bankruptcy. As satisfying as it may sound, your creditors cannot repossess your cars or foreclose on your home in a Chapter 13 bankruptcy.
Unlike Chapter 7, a chapter 13 bankruptcy, is a repayment plan. Chapter 13 allows you to repay your debts over a three to five-year period. Sometimes, if some of your debts are “unsecured”, you can pay back as little as 10% of these “unsecured” debts, over 36 or 60 months, with no interest being levied against you. Upon completion of your Chapter 13 bankruptcy process, you will receive a “discharge” from the Bankruptcy Court. If that is how your Chapter 13 unfolds, you will have no further legal obligation to repay the remaining balance of those unsecured debts. Upshot? In many Chapter 13 cases, you will have paid as little as 10% of your unsecured debts over three to five years, with no interest, and the balance of your “unsecured debts” will be completely discharged.
An “unsecured debt” is any debt where you have not agreed to use any of your property as collateral to the creditor. Unsecured debt is typically credit card debt and any medical bills.
A “secured debt” is a debt where you have agreed that the creditor has the right to take back certain properties that you have agreed will be termed ‘collateral’. If you fail to pay for a car, for example, the bank or lender can repossess your car, truck or RV. Similarly, your mortgage lender holds your house in “collateral” should you fail behind in payments or fail to repay that mortgage subject to the terms on the mortgage agreement.
To STOP a home foreclosure, you must file your Chapter 13 petition BEFORE the foreclosure sale date. If you procrastinate too long to where the sale date is set, it will be too late to use Chapter 13 to save your home. The takeaway is the following. If you have just received a foreclosure summons, and the sale date has not yet been set, if you ACT NOW, you might be able to save your home. Call Michael for a no cost phone consultation or sit-down meeting to find out if (1) you qualify for a Chapter 13, and (2) if Michael can process a fast tract Chapter 13 filing for you.
Eligibility for Chapter 13 Bankruptcy
To qualify for a Chapter 13 bankruptcy, you must be able to make monthly payments for your repayment plan that we will –together– draft for the bankruptcy Court. You must have a job or another “regular source of income”. Other sources of income can be investment or annuity income, payments from a pension, alimony payments, or government benefits. You cannot have more than $336,900 of unsecured debt or more than $1,010,650 of secured debt. Should you be over one or both of those financial thresholds, a Chapter 11 bankruptcy, usually for a small business, but is more and more used for individuals who cannot qualify for Chapter 13.
Chapter 13 Bankruptcy Attorney
Michael D. Franco, can help you protect your home, car, job and personal property from creditors.
Call (714) 252-6268 for a Free Phone Consultation
or to schedule a sit-down consultation today!
Michael D. Franco is a Certified Legal Specialist in Bankruptcy Law by the California Board of Legal Specialization. Michael has more than 23 years of experience with Chapter 7, Chapter 11 and Chapter 13 bankruptcy.