Van Nuys Chapter 13 Bankruptcy Lawyer
Many people find themselves in financial difficulty at some point in their lives. It is not always easy to determine how to solve these difficulties, and you may have questions about the possible repercussions of choosing one option over another. If you are struggling with debt, you may have already considered filing bankruptcy. There are different types of bankruptcy you can file and certain procedural rules you must follow. Below, our Van Nuys Chapter 13 bankruptcy lawyer explains more about this type of bankruptcy.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is unique because it offers borrowers the opportunity to maintain possession of their property while creating a repayment plan. It is for this reason that Chapter 13 bankruptcy is also referred to as reorganization bankruptcy. Chapter 13 is also sometimes called the wage earner’s plan because it is very useful for people who earn an income and do not qualify for Chapter 7 due to the means test.
During a Chapter 13 bankruptcy, borrowers create a repayment plan that outlines how and when they will repay their debts. The repayment plans in these types of bankruptcy cases typically last between three and five years. This long amount of time allows monthly payments to be lower and more affordable to pay.
Benefits of Chapter 13 Bankruptcy
There are many advantages to filing Chapter 13 bankruptcy. The main ones of these are as follows:
- Debt consolidation: Chapter 13 bankruptcy acts as a debt consolidation plan. Instead of paying many debts separately, you will have one payment to make, which can make debts easier to manage.
- You can keep your property: Unlike in Chapter 7 bankruptcy, your property is not sold during a Chapter 13 bankruptcy. This means you can keep your home, your vehicle, and other assets and repay these loans through the repayment plan.
- Reduce interest on auto loans: You are only required to repay a reasonable amount of interest on your vehicle loan in Chapter 13 bankruptcy. The rate is often lower than the original amount on the loan.
- You can keep your income tax refund: Borrowers in Chapter 7 bankruptcy cases often lose some or all of their income tax refund. A Chapter 13 bankruptcy, though, allows you to keep all of your income tax refund because your property is not sold or seized.
- Rebuild your credit: As you continue to make payments on the debt, your credit score will start to improve. Your creditors will report the payments to the credit bureaus, increasing your score faster than other types of bankruptcy.
Call Our Experienced Chapter 13 Bankruptcy Lawyers in Van Nuys Today
There are many benefits that come with filing Chapter 13 bankruptcy, but there are also many laws that will govern your case and procedural rules you must follow. On Wadhwani & Shanfeld, our Van Nuys Chapter 13 bankruptcy lawyers can advise on what these are and help you navigate the process. Call us now at 818-658-2669 or contact us online to request a consultation and to get more information.
