What Is A Chapter 13 Bankruptcy? What Requirements Need To Be Met To File A Chapter 13 Bankruptcy?
In essence, Chapter 13 bankruptcy allows eligible individuals to agree to a payment plan that will help them catch up with their expenses after having fallen behind due to any number of reasons, such as an unexpected job loss. This type of bankruptcy is available only to individuals and sole proprietorships (other business entities are not eligible).
Many cases of Chapter 13 bankruptcy involve individuals who have fallen behind on their mortgage and do not want to lose their home. The money owed on the mortgage, which is referred to as arrears, is added to the Chapter 13 payment plan, along with other debts. Chapter 13 payment plans usually last for three to five years. These plans can be anywhere from zero percent to 100 percent, which means a person could pay zero percent of their unsecured debt, 100 percent of their unsecured debt, or some percentage in between. For every year that a person is on a Chapter 13 payment plan, they are required to give tax returns over $500 to the bankruptcy court.
What Assets Will I Be Able To Keep After Filing For Chapter 13 Bankruptcy?
For the most part, the exemptions in a Chapter 13 bankruptcy are the same as those in a Chapter 7 bankruptcy, which means assets that fall within California exemptions 703 or 704 can be kept. In a Chapter 13 bankruptcy, the court generally won’t ask that non-exempt assets be sold, because unsecured creditors are being paid their fair share of what the assets are worth through the Chapter 13 payment plan.
For more information on Chapter 13 Bankruptcy In California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (818) 900-5794 today.
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