When Chapter 13 Bankruptcy Is The Best Option

For those who do not qualify for Chapter 7 bankruptcy filing, Chapter 13 bankruptcy offers a viable solution for debt relief. At Gumm & Green, LLP, we offer the experience, support and guidance you need to overcome your financial difficulties.

Not sure if you should file or which type to file? Contact the firm today to have your questions answered in a free, no obligation information consultation.

Why File For Chapter 13?

Many people who file Chapter 13 bankruptcy have a steady income. They simply ran into financial troubles, causing them to get behind on their payments. You may have suffered an illness, job loss or other life-challenge that set you back. Our goal is to help you relieve your debt so you can get back on track and begin fresh.

How Debt Reorganization Works

Unlike filing for Chapter 7 bankruptcy, filing Chapter 13 bankruptcy does not result in debt liquidation. Chapter 13 bankruptcy filing involves a reorganization of your secured debt into manageable payments. Your unsecured debt may be paid in full or in part depending on your debt to income ratio. The repayment schedule is usually set between three and five years.

Do You Need To Repay ALL Of Your Debt?

This is a common myth: that with a Chapter 13 filing you will repay all of your accumulated debt, just at a slower rate. This isn't always true. The amount you pay back depends on a number of factors. One of these factors is your ability to pay. Chapter 13 is also known as the "pay what you can afford" solution.

Five Benefits Of Chapter 13

  1. Avoid foreclosure. Creditors must stop all actions against you, including home foreclosure. If filed early enough, you can catch up on back payments for your house and continue paying mortgage payments and stay in your home.
  2. Stop vehicle repossession. Auto loans can be repaid through Chapter 13. In some cases (called "cramming down") you will only pay back what the car is worth, not what you actually owe.
  3. Protect your assets. There are items you may wish to hold on to that could be liquidated in Chapter 7. Many times you are able to keep these items if you file for Chapter 13.
  4. You may qualify for Chapter 13 but not Chapter 7. There are plenty of cases where people have a steady job and have too much income and assets to qualify for Chapter 7. In many of these cases, especially if there is overwhelming debt, Chapter 13 is a viable option.
  5. Remove a second mortgage. Chapter 13 allows you to "lien strip." This means you will only have your first mortgage, not your second or any others. A lien strip needs to be approved by the court, but if it is it frees you from your second and third mortgage.

We Are Here To Help

Our experience and knowledge in bankruptcy law has helped many people obtain financial relief. Find out how the bankruptcy lawyers at Gumm & Green, LLP can help you. Contact our firm today and schedule a free consultation to discuss a Chapter 13 bankruptcy filing. Call 818-707-4233 OR 1-855-707-4233. Serving Thousand Oaks, Westlake Village and the surrounding communities.