CHAPTER 13 BANKRUPTCY
Chapter 13 Bankruptcy | For many Bakersfield families filing for Chapter 13 bankruptcy means they can seek relief from debt collectors and still save their assets. Unlike Chapter 7 Bankruptcy, filing a Chapter 13 Bankruptcy doesn’t mean you will erase most debt all at one time.
The advantage of this filing is that it will immediately stop all creditor collection efforts, in most cases. With the approval of the bankruptcy trustee, you set the amount you pay your creditors each month. You typically have three to five years in which to carry out the terms of a Chapter 13 plan. These payments are made directly to the trustee, who then intern pays out to creditors in accordance with the Chapter 13 plan.
What is the difference between a Chapter 13 case and a Chapter 7 case?
The biggest difference between filling a Chapter 7 case and a Chapter 13 case is that in a Chapter 7 Bankruptcy filing the person in debt’s nonexempt property and assets (if they have any) is sold off to pay as much as possible of the debtor’s debts, ware as in Chapter 13 filing a portion of the debtor’s future income will be allocated to pay off as much of the debtor’s debts as possible under the debtor’s financial circumstances. Normally, in a Chapter 7 filing the debtor loses all of his or her nonexempt assets and receives a Chapter 7 discharge. In a Chapter 13 Bankruptcy filing case, the debtor usually keeps their nonexempt assets, but must intern pay back as much as the trustee deems feasible for the debtor to pay over 3-5 years. Chapter 7 filings take far less time and are less expensive than a Chapter 13 filing, but Chapter 13 filings allow a debtor who is above the median income or who has a large amount of nonexempt assets to keep their assets and receive the protection of bankruptcy.
When is filing Chapter 13 more preferable to a filing Chapter 7?
We recommend filing Chapter 13 is when:
- The debtor wishes to repay all or most of his or her unsecured debts and has the ability to do so in a reasonable amount of time.
- The debtor has valuable nonexempt property which would be sold off in a Chapter 7 Bankruptcy filing.
- When the debtor is ineligible to filing for Chapter 7 due to the means test.
- The debtor is not eligible for a Chapter 7 discharge, because they have filed for Chapter 7 in the past 8 years.
- The debtor has substantial debts that are not dischargeable under Chapter 7 but would be dischargeable under Chapter 13.
- The debtor requires temporary relief from his or her creditors and has adequate assets by which to repay their debts.
Chapter 13 Bankruptcy Frequent Asked Questions
How much does it cost to file Chapter 13 Bankruptcy?
It’s usually a smaller up- front fee than Chapter 7, with larger fees paid over the course of the case. The minimum flat fee charged by this office is $4,000 for the entire case and $6,000 for a business case. These are the current limits set by the Bankruptcy Court in this district. In complex cases, this office may charge at an hourly rate. Whether it’s a flat rate or an hourly rate, you are not required to come up with the full amount at the time we are retained, and the attorneys fees are paid from the monthly payments made to the Chapter 13 Trustee, whose office distributes your payments out to your creditors.
How long does it take to file Chapter 13 Bankruptcy?
Usually, three to five years, depending on a variety of circumstances. Every case is different.
Do I go to Court?
Usually, no. But you will go to a meeting of creditors with me where the Chapter 13 trustee will ask questions about your case. As part of the fee paid to this office, we will prepare you completely for the meeting of creditors. There will be a room full of people, however those people for the most part are others who have filed, who are just as nervous as you. Do not lose any sleep over this! Your turn in the ‘spotlight ‘ is usually only a few minutes
What is credit counseling?
You are required to take two courses of instruction pertaining to credit assessment and debt management. They can be taken in person her in Bakersfield, on the telephone, or on the Internet. Each class takes about an hour. The Internet classes remind me of on-line traffic school. They are interactive, and at the end you talk to counselor for a few minutes. The cost, which is not part of the fee you pay this office, is around $25 per class.
How often can one file Chapter 13 Bankruptcy?
Unlike Chapter 7, there are no limits on how often one can file for Chapter 13. But what you can or cannot accomplish in Chapter 13 depends on whether you have filed before, or whether you have previously filed another Bankruptcy case in a different chapter.
Do I meet with an attorney?
Yes. And you will very likely see your attorney more than once over the course of your Chapter 13 case. Unless your appointment is for an administrative task of some kind, you almost always meet with me.
Where do I file?
The Bakersfield division of the Bankruptcy Court covers all of Kern and Inyo Counties. I represent clients residing in Bakersfield, Taft, Maricopa, Buttonwillow, Wasco, McFarland, Shafter, Delano, Frazier Park, Lebec, Tehachapi, Mojave, Ridgecrest, California City, Bishop, Lone Pine and all other parts of Kern and Inyo Counties
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Chapter 7 Bankruptcy
Chapter 7 allows you to discharge your debt and most often keep your home and other assets.
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy allows your business to remain in operation and retain control over most or all of your assets.
Chapter 13 Bankruptcy
Chapter 13 is an option if you can’t file Chapter 7 and/or wish to pay taxes or catch up your house payment.