Chapter 13

What Is a Chapter 13 Bankruptcy?

Chapter 13 is a flexible debt reorganization plan. It accommodates a variety of different situations and is a good option for those who can afford to pay back some, but not all, of their bills. Chapter 13 bankruptcy is different from Chapter 7 in that you do not simply walk away from your debts which have become unmanageable, but instead propose a "best efforts" plan to pay off your bills over a three- to five-year period.

Benefits to Filing Chapter 13 Bankruptcy

There are many benefits to Chapter 13 bankruptcy, including:



• People with considerable assets — such as homes, real estate property, boats, RVs, investments, etc. — often choose Chapter 13 bankruptcy, so they can keep their assets.
• With a Chapter 13, you can include just about any kind of bill when filing your bankruptcy plan, including car loans, taxes, student loans, child support arrears, home loan arrears and more.
• You may be able to keep your home and car by reorganizing your mortgage debt or car loan.
• At the end of your three- to five-year plan, all remaining debts will be discharged.
• If you are considering bankruptcy, contact Central Coast Bankruptcy, Inc., and find out if Chapter 13 bankruptcy is right for you. Chapter 13 is a type of personal bankruptcy that is only available to those who have a reliable source of income and who are able to propose a reasonable plan for debt repayment. But when working with an experienced firm like Central Coast Bankruptcy, Inc., it is usually possible to build a monthly payment program which is much more affordable than any other solution.

What is a Lien Strip?

So many people are upside down in their homes these days, meaning they owe a lot more on their mortgage than the home is actually worth. Many families took out 2nd or even 3rd mortgages or HELOC loans when the housing market was doing well, and now have come across hard times and cannot make the payments. A "lien strip" can eliminate the 2nd, 3rd, or HELOC if the home's value is current appraised value is less than what is owed on the home. While the client is responsible for paying off the first mortgage, often we are able to completely eliminate the 2nd, 3rd or HELOC with a lien strip, saving our clients substantial amounts of money.

"Lien Stripping" is a very powerful tool, and it is possible with a Chapter 13 or Chapter 11 Bankruptcy.

What Would Your Monthly Payments Be in a Chapter 13 Bankruptcy Filing?

It's impossible to say without a careful review of your assets and liabilities, but the Chapter 13 payment is intended to be affordable and is usually based on your monthly income and ability to pay. Once you are in a Chapter 13 plan, the only other payments you need to make each month are your rent (or mortgage), food, utilities, etc. All car loan payments, taxes, mortgage arrears and most other bills are included or rolled into in your monthly Chapter 13 bankruptcy payment.

​Are you considering filing Chapter 13 bankruptcy? Contact an experienced Salinas Chapter 13 bankruptcy attorney at Central Coast Bankruptcy, Inc. Your initial consultation is always free. Call 831-783-0260 or send us an e-mail.