Bankruptcy under Chapter 13 is re-organization of debts and assets. The goal is to pay back some if not all of your creditors over a 3 or 5 year plan.
You file Chapter 13 if:
You do not qualify for Chapter 7;
You have secured debts on property you wish to retain, i.e. facing foreclosure or repossession;
Your home is undervalued and you wish to "strip" junior lien holders of their secured position.
The process for filing a chapter 13 bankruptcy is much like that required for filing a chapter 7 bankruptcy. With the additional re-payment or re-organization plan. The re-payment or re-organization plan will determine the monthly payment amount to be made to the US Trustee assigned to the matter and determine which debts will get paid and in what order. The re-payment or re-organization plan is negotiated by us on your behalf, attorney's for your creditors, and the US Trustee.
Once the plan is approved, monthly payments must be made to the US Trustee for the term of the bankrutpcy. Some debts will be paid off in full, others may not get paid at all, yet others may be paid some but not all that is owed to them.
Like Chapter 13 bankruptcy, a individual is allowed to do a "lien strip" on personal and real property. A "lien strip" can be accomplished if the asset is undervalued (worth less then the loan on it). This can be accomplised on your personal residence. This would be an instant prinicpal reduction of the loans on your personal property. This means that junior liens (2nds, HELOCs, etc...) would no longer be considered a secured loan and would be paid off in the repayment plan.
Contact us Today
We are here to meet with you and answer all of your bankruptcy questions. Feel free to contact us at 949-333-5921 and schedule your appointment with our attorneys.