San Marcos Chapter 13 Bankruptcy Attorney
Sophisticated Debt Relief Guidance in San Diego, Riverside, Orange, and Los Angeles Counties
Nothing is more frustrating and stressful than being unable to keep up with mounting debt. If you still have reliable income, Chapter 13 bankruptcy may be able to provide the protection and relief you need to move forward.
At North County Bankruptcy Clinic, we are committed to helping our clients overcome seemingly insurmountable financial difficulties. Our San Marcos Chapter 13 bankruptcy lawyer has over 40 years of experience and can work closely with you to create a plan for getting on top of your debt. When you hire us to represent you, we will assess whether Chapter 13 is the best choice for your situation, create a strategic repayment plan that maximizes relief, and advocate for you every step of the way.
How Does Chapter 13 Bankruptcy Work in California?
Before you file for Chapter 13 bankruptcy, you must complete the first of two court-approved credit counseling programs. Our office will go over your information and prepare your petition while you do this.
Filing for bankruptcy triggers the automatic stay, a court order that halts all ongoing and pending collection actions. This means creditors cannot foreclose your home, repossess your vehicle, or garnish your wages until your case is over or unless they obtain special permission from the court. In many cases, the automatic stay will remain in place for the duration of your bankruptcy, meaning you will potentially have multiple years of protection.
Next, you will need to propose a repayment plan that reorganizes your debts into a single monthly payment that you will make over three to five years. The monthly payment amount will be determined by your current disposable income, or what you can afford to pay after expenses. You will need to start making payments the month after you file, even if the court has yet to formally approve the plan.
In your plan, some debts must have priority over others. Tax debt and child support obligations have the highest obligations, followed by secured debts – including mortgage arrears and missed car payments. These debts must be paid in full over the course of the plan. Unsecured debt receives the lowest priority and only needs to be addressed after higher priority obligations are settled. This priority schedule can work to your advantage, as you cannot eliminate secured debt but can discharge unsecured debt.
Your creditors and the bankruptcy trustee assigned to your case will have the opportunity to object to your plan if they believe it is unfair. Our team at North County Bankruptcy Clinic knows how to handle objections at this stage of the process and will do everything we can to ensure your proposed plan is swiftly confirmed.
Upon completing all plan payments and a second credit counseling program, you will in most cases be permitted to discharge any remaining unsecured debt. This includes credit card debt, medical bills, unpaid utility bills, and personal loans. Your plan should also bring your secured debts current, and the lack of overwhelming unsecured debts should give you the resources and flexibility you need to keep up with payments going forward. Our San Marcos Chapter 13 bankruptcy lawyer can also assist you with the process of rebuilding your credit.
Not everyone will necessarily be able to file for Chapter 13 bankruptcy. This type of relief is only available for people who can afford to repay a portion of their debts. You can determine your eligibility by completing the California Means Test.
You will first need to compare your current income to the state’s median average income for your household size. If you earn less than the median, you “pass” the Means Test and probably do not make enough to file for Chapter 13. However, you will qualify for Chapter 7 bankruptcy, which can also facilitate powerful debt relief.
If you do make more than the median, you will need to determine your current level of disposable income. You can calculate this by subtracting qualifying monthly expenses from your current monthly income. If you have a substantial amount of funds left over after expenses, you are likely a good candidate for Chapter 13 bankruptcy. Our San Marcos Chapter 13 bankruptcy attorney can help you make these calculations and verify whether you qualify.
Unlike Chapter 7 bankruptcy, you will not have to liquidate any assets in a Chapter 13 bankruptcy. Keep in mind that you are making a multi-year commitment when filing for Chapter 13 relief, however. At a minimum, you will be making plan payments for three years. Chapter 7 bankruptcies can be completed within several months, and bankruptcy alternatives may also be available.