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CHAPTER BY CHAPTER--- In light of the recent tough economy, many people are facing financial difficulty. You may be having difficulty paying for your credits cards, medical bills and other day to day expenses. You may be facing creditor harassment, lawsuits, garnishments, auto repossessions, and even foreclosures. Although, nobody likes to file for protection under bankruptcy laws, unfortunately real life circumstance sometime leaves people with no other option. One thing about bankruptcy that confuses many consumers is the Chapters of the Bankruptcy Code from which one has to choose to file under. Although there are several possibilities, most consumers work with their attorneys to choose between only two choices – Chapter 7 and Chapter 13. Our Orange County and Riverside bankruptcy attorneys have represented hundreds of people in bankruptcy proceedings in most major courts in southern California. Call us today for a free consultation. 877-529-4545. Chapter 7 bankruptcy (also a "straight bankruptcy" or “liquidation") is the simplest way to a fresh start, and it is the most popular. After the recent changes in the bankruptcy law, many people think that they no longer qualify to file under Chapter 7 bankruptcy. This is not true. Although after October of 2005, the new law has changed the qualifying factors, you can still get the debt relief you need if you qualify. As soon as you file for bankruptcy, your creditors must stop contacting you. If you are approved for Chapter 7 bankruptcy, you could have a complete forgiveness of your debt within months. Based on the new law, people who want to file for Chapter 7 bankruptcy have to pass what is known as the "Chapter 7 Means Test". The Chapter 7 means test is a formula used to see if the consumer can have enough money available to make very minimal payments to creditors, like in a Chapter 13 bankruptcy plan. The purpose of the changes of 2005 was to ensure that anyone who can make some payments to creditors makes those payments. As a result those who qualify for Chapter 7 generally have such low income levels that they cannot make payments on their debts. This is why one’s household income has direct relationship to qualifying for Chapter 7. If your annual household income is below your state's median family income, or you pass the “means test,” and you do not have any assets that exceed the allowed exemptions, Chapter 7 will probably be the option for you. Call our Orange County, Irvine, and Laguna bankruptcy attorneys today for a free consultation. Currently median income in the state of California is $44,499 for one earner, $59,086 for 2 people, $64,118 for 3 people, and $72,996 for 4 people in a family. Currently (January 2009) Homestead exemption for a single person is $50,000 and $75,000 for a married couple. It increases to $150,000 for persons over 65, the disabled, and persons over 55 with low income. Chapter 7 can help debtors discharge most of their unsecured debts, including credit card debts, medical debts, etc. However, certain debts cannot be discharged in Chapter 7. Debts that are not dischargeable in Chapter 7 include, but are not limited to: Chapter 13 Chapter 13 bankruptcy (also called a "repayment plan") is generally used for wage earners who have property that would not be exempt in a Chapter 7, or for people who are behind on mortgage or car payments. It also can help people who have debts that would not be discharged in Chapter 7. With a repayment plan, the consumer makes payments to a Trustee, who distributes the money to the creditors according to a Chapter 13 plan. The payments can continue for upwards of five years. A Chapter 13 plan is based on the consumer's monthly income, monthly expenses, debt, and property. Depending on these factors, consumers who qualify pay back either part or all of their debts. As long as Chapter 13 consumers keep up with the plan, they are able to keep their property. -stop your home foreclosure, and enable you to gradually pay off your overdue payments in a 3 to 5 year plan. As soon as you file for chapter 13 bankruptcy, you can stop the foreclosure of your home and put an end to creditor harassment. Chapter 13 Bankruptcy gives you some breathing room to allow you to catch up on past due payments so you can get back on track. Upon approval, we will work with the court to create a debt payment plan you can afford. The debt repayment can last from a period of three to five years. This plan will allow you to keep your home and other important assets, including non-exempt assets. After three to five years of making regular payments and rebuilding your credit, your remaining debt will be completely forgiven. Call our office today to speak to a knowledgeable Orange County Chapter 13 bankruptcy attorney. Many people believe that you must repay 100% of your debts in Chapter 13. That is usually not true. Credit card debts and other unsecured debts are paid if and only if funds remain after the debtor has repaid delinquent mortgage payments, auto debts, tax debts, and other secured or priority debts. Thus, the vast majority of debtors filing Chapter 13 still discharge a large portion of their unsecured debts. BOTH A CHAPTER 7 AND CHAPTER 13 BANKRUPTCY WILL PUT A STOP TO ANY CREDITOR HARASSMENT, LAWSUIT, WAGE GARNISHMENT, OR FORECLOSURE.
Call Us Today! ________________________________________
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