Chapter 13 bankruptcy is a form of bankruptcy which involves debt reorganization. There are people who declare bankruptcy who have significant cash flow available, just not enough to cover their debt load. These people can demonstrate to the court that they can repay their debts as long as they are given time to do it. This is a far better choice if bankruptcy is being contemplated, especially if the individual wishes to keep his or her property; things like homes, cars, boats, etc. This is a better choice than a Chapter 7 Sonoma County bankruptcy. Both Chapters 13 and 7 are available to individuals.
Prior to filing for a Chapter 13 bankruptcy the individual must first arrange to visit a court appointed credit counselor; during this meeting the potential bankrupt person must openly declare every debt, as well as a comprehensive list of monthly expenses including secured debt such as a home or vehicle not yet paid for. Any money that is left over can be used to repay unsecured debtors, these debts are prioritized with back taxes, child support etc having top priority. The second debts in line are those which if not paid will result in property loss, excluding a mortgage and the bottom tier are credit cards. Usually a repayment period of five years is agreed upon and if at the end of this period the approved repayment plan has been successfully completed, often some of these debts are forgiven.
If you do file for Chapter 13 bankruptcy protection you can expect any collection actions or harassment will cease once the filing is made. If you process your bankruptcy with the help of an attorney, the attorney handles any calls and collection action prior to your court date.
Once a repayment plan has been developed and approved by the court; the agreed upon monthly payments to creditors are handled through a court administrator. You pay the money to the administrator; he or she in turn, makes the payments to the debtors. Once you reach this point it becomes an absolute must that all payments are made in full accordance with the rehabilitation plan.
Chapter 13 bankruptcies may not be an option if your predictable income is not enough to make the agreed repayments. If you find that Chapter 13 simply will not work, then you can file for Chapter 7.
Sonoma County bankruptcy law allows individuals to file either Cheaper 7 or Chapter 13 bankruptcy. To determine which is best for your situation you are invited to contact Robert Bialkin Attorney & Mediator.
