What is Chapter 13 Bankruptcy?
Filing for bankruptcy is never an easy process and having a myriad of questions about the ordeal is more than normal. It is one of the more stressful experiences that you can go through, especially when you have to decide between Chapter 7 and Chapter 13 bankruptcy. These are some hard questions that you need to ask and doing so without the proper council could lead to some more headaches. There, are, however, a few things that you should know about Chapter 13 bankruptcy and common questions that we will get into here with the help from the best Chapter 13 Bankruptcy Lawyer Los Angeles.
What does Chapter 13 bankruptcy entail?
If you are in a position to file for Chapter 13 bankruptcy, you should do your best to investigate the option. This filing method allows you to keep your assets while you discharge your unsecured debt.
In short, this means that you can keep your belongings while paying off your debt. These agreements usually stretch between a three or five-year payment plan. In the case where you are able to pay off your debt on time, the rest of your debt can be removed.
At this stage, it is also worth mentioning that student loans, alimony, and child support do not count as dischargeable debts.
Chapter 13 bankruptcy is probably your best choice if you have a regular income. In these cases, you will be able to avoid foreclosure, make up payments and avoid accruing interest.
What’s the Catch?
Although there are a number of benefits to filing for Chapter 13 bankruptcy. There are also a couple of disadvantages. Chief among these being that you have a three to five-year payment plan.
At the time, it might seem bad, but you also won’t be able to hold any credit cards, although it can also be a blessing in disguise. The other problem is that you will have great difficulty obtaining a mortgage, seeing that the banks see you as a high-risk candidate. This is mainly due to the fact that your credit score will be next to nothing.
How Will I Know if I Qualify?
When you file for bankruptcy, it is your last resort. This means that you have too much debt and you are sinking. However, to file for Chapter 13, you may have no more than $394 725 worth of unsecured debt which includes personal loans and credit card debt.
Furthermore, you may not have more than $1 184 200 worth of secured debt like a home loan. These figures can fluctuate according to the consumer price index.
You don’t have to go through the process alone, you can get professional help from us here at Karine Karadjian. We have the best Chapter 13 Bankruptcy Lawyer Los Angeles that will guide you every step of the way. All you need to do is to give us a call at (818) 918-9660 for a free consultation and we will help you make the difficult decisions.