Chapter 13

Chico Chapter 13 Bankruptcy Overview
August Bullock (530) 487-8756

A Chapter 13 is also known as a reorganization bankruptcy. A debtor in a Chapter 13 is required to make monthly payments to the court for three to five years Often these payments are surprisingly low. Many debtors payments are less than $100 per month.

The amount you have to pay depends on how much you earn, what kind of property you own, what kind of debts you have, and other factors. If you give me a call I will be glad to analyze your situation.

Chapter 13 bankruptcies can provide numerous benefits chapter 7s do not, including:

– If you auto loan is more than two and a half years old, you can reduce the amount of the loan so you only pay the value of the vehicle, not the amount of the debt. This is known as a chapter 13 “cramdown.”

– If you have a loan that is less than two and half years old you can sometimes reduce the amount of interest on the loan.

– Income tax debts that are more than three years old can sometimes be eliminate without any payment. Income taxes that are less than three years old can often be paid off over a long period of time without interest or penalties.

– The bulk of the attorney fees can be paid through the plan. You can get immediate relief from your creditors with a small down payment.

– If you own a home and have two mortgages on the property, and the home is worth less than the first mortgage, you can often eliminate the second mortgage and erase the lien from your title report. This is known as a chapter 13 “lien strip.”

– If you own a home and are behind on your mortgage payments, you can catch up on the back payments over a long period of time. This is true even if lender wants to foreclose and does not want to accept the smaller payments.

– You can keep all your property in a chapter 13, even if you have a lot of assets. If you have more property than you would be allowed to keep in a chapter 7, you will have to make payments to the court – but these payments are often quite reasonable.

– If you cannot afford to make payments on your student loans, you can suspend the payments for up to five years. You will still owe your student loans after that time, but you won’t have to make student loan payments until your chapter 13 ends.

– In general, Chapter 13s are often very helpful to people with mortgage problems. tax debts, and auto loans. If you give me a call I would glad to analyze your situation and help you decide which chapter might be best for you.