Orange County Chapter 13 Bankruptcy

In this economy, it only takes one or two missed payments on your home or car to get so far behind that it seems like you’ll never be able to catch up, even if you have steady employment. Filing for Chapter 13 through our exemplary Orange County Bankruptcy Law Firm is an excellent first step to regaining your financial freedom. By filing for Chapter 13 bankruptcy, you can take advantage of the protections that bankruptcy provides, while still getting a handle on your debt. And unlike Chapter 7, Chapter 13 bankruptcy allows you to keep possession of your property as long as you make the scheduled payments.

Chapter 13 bankruptcy allows you to come up with a workable payment arrangement that will satisfy your priority and secured debts, while giving you flexibility in repaying those debts over a 3 to 5 year period. Your non-priority, unsecured debt does not have to be paid in full, as long as those creditors are repaid as much under the Chapter 13 filing as they would be under a Chapter 7 filing. Many people find that this means the unsecured creditors receive little or no compensation, as they would not be compensated in a Chapter 7 filing.

One of the major advantages to Chapter 13 bankruptcy is that it allows you to keep possession of valued assets such as your car and your home. Moreover, your loan exceeds the value set for your property, you may be able to have the judge adjust what you owe via a process called “cramming down”. Loans that are crammed down can have the principal reduced, the interest rate reduced, or the terms of the loan altered in other ways to make it more affordable. Creditors must comply with the new loan terms that have been set, and cannot demand the full amount of the loan once the adjustment has taken place.

Another advantage to Chapter 13 bankruptcy is the fact that the Automatic Stay applies not only to you, but to any co-debtors that may also be responsible for your financial obligations, even if those co-debtors are not filing for bankruptcy. This means that creditors will not be able to attempt collection actions on anyone who cosigned on loans, rental agreements, or other financial obligations.

While filing for Chapter 13 can be very beneficial if you need financial protection, not everyone will qualify. There are requirements with regards to the amount of debt you owe, as well as your ability to repay. If these requirements are not met, you may be eligible to file for Chapter 7 bankruptcy instead. If you are considering filing for Chapter 13, but you aren’t sure if you qualify, or if you need assistance in any way, please contact our premier Orange County Bankruptcy Law Firm today. We will provide you with a free initial case evaluation that can answer your questions and get you on the road to financial freedom.