Chapter 13 Bankruptcy (also known as “Wage Earners Reorganization”)
If an Individual or Married Couple does NOT qualify for a Chapter 7 bankruptcy either because of too much income or too many assets, then a Chapter 13 Bankruptcy might provide debt relief. To qualify for a Chapter 13 you must have a regular income, your unsecured debts must be less than $419,275 and secured debts less than $1,257,850.
Instead of a complete discharge the Debtor in a Chapter 13 has to commit to making payments for either 3 or 5 years. The payments are usually based on disposable income.
Chapter 13 to Stop Home Foreclosure
Individuals may use a Chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the Chapter 13 petition. The individual may then bring the past-due mortgage payments current over a reasonable period of time (no longer than 5 years). Time is of the essence here because the debtor can still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition.
In certain cases a Chapter 13 bankruptcy can offer a certain benefit that a Chapter 7 cannot offer, allowing the possible removal of a secured lien which was encumbered by a second or third mortgage holder.
A Chapter 13 is a more complex process and thus it is absolutely recommended to retain an attorney or at least consult with an attorney to understand the pros and cons of a Chapter 13 bankruptcy filing.
Cost of Chapter 13
The rate of a Chapter 13 is usually always the same amongst most bankruptcy attorneys. When a Debtor is engaged in their own business the rate is $6,000 plus the filing fee of $281. When a Debtor is not engaged in their own business the rate is $5,000 plus the filing fee.
However, what varies amongst bankruptcy attorneys is the down payment necessary to start the process. At Reganyan Law Firm, we accept a down payment as low as $500 plus the filing fee in order to file your chapter 13. The remaining amount will be paid through your chapter 13 plan which will not affect your overall payment whatsoever. This rate is for qualifying clients who are able to confirm a plan. Call us and we will let you know if you qualify for this rate.
You can always contact Reganyan Law Firm for a free bankruptcy consultation. If you are considering any Chapter of bankruptcy we can discuss your options free of charge.
Call Robert Reganyan at 818-649-0879.