Understanding Chapter 13
Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time. If your debts do not exceed certain dollar amounts as noted in the Bankruptcy Code, you will be eligible for Chapter 13 bankruptcy. Contact us at The Law Offices of Jesus Zuniga, to determine if you qualify.
Chapter 13 Is For Individuals With A Regular Income
Under Chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them, using your future earnings. The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors. The court must approve your plan before it can take effect.
After completing the payments under your plan, your debts are generally discharged except for domestic support obligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts that are not properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certain long-term secured obligations.
Keep your home, auto, furniture, business, cash, and all assets you choose under Chapter 13, because debts and arrears are paid “as if in full.”
We determine your Chapter 13 plan payment by taking net monthly income less normal living expenses. The amount left over is paid to a trustee, who in turn pays creditors monthly.
Chapter 13 is a federal relief that requires creditors take less each month from you, for a longer period of time. It is available to individuals with:
- Regular income from any source
- Unsecured debts not exceeding $307,675.00
- Secured debts not exceeding $922,975.00
If the amount left over cannot repay creditors in full over three to five years, we reduce the balance owed to unsecured creditors and sometimes secured creditors. You pay creditors zero to 100 percent of the balance owing depending on: your budget and your county’s court.
We eliminate all interest on most unsecured debts and certain types of secured debt. This reduction of interest, balance owing and extended time to pay makes the payment affordable. Chapter 13 immediately stops foreclosure. Delinquent house payments are included in the payment plan and brought current over 60 months. After filing, regular house payments are paid outside the plan.
You can pay off your Chapter 13 plan anytime prior to completion without interest or penalty. However, if your plan pays creditors less than 100 percent of the amount due, you must pay creditors 100 percent to obtain an early discharge. To learn more, contact us at 661-522-0092 or send us an email.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.