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Chris Jackson Law, PC

Chris Jackson Law, PC - Christopher J. Jackson


CHAPTER 13

As a result of the "Great Recession" and housing bubble, millions of Americans are struggling to keep up with their monthly bills and household expenses. Bankruptcy protection was designed for such situations.

What is a Chapter 13 Bankruptcy?
Chapter 13 is also known as a reorganization or consolidation bankruptcy, because certain debts are reorganized and reduced into a lump sum which you pay over 3 to 5 years.

How Can a Chapter 13 Bankruptcy Help Me with My House or Vehicle?
In regards to your home, Chapter 13 bankruptcy enables you to: (a) stop a foreclosure; (b) get caught up on the past-due payments over 3-5 years (rather than all at once); and/or (c) completely remove your second mortgage or home equity line from your house. This is one of the great advantages to Chapter 13.

In regards to your car(s), Chapter 13 bankruptcy may allow you to (a) stop a repossession; (b) catch-up on past-due payments over 3-5 years (instead of all at once); and (c) significantly reduce your car payments.

What About My Other Debt?
A Chapter 13 bankruptcy enables you to eliminate most or all of your "unsecured debt" (like credit cards, medical bills, unsecured loans, etc.). However, depending upon your income and expenses, you may also have to pay a portion of such unsecured debt over 3-5 years.

Will a Chapter 13 Bankruptcy Stop Foreclosures, Repossessions, Etc.?
Filing either a Chapter 7 or Chapter 13 immediately stops creditor harassment, wage garnishment, lawsuits, repossessions and foreclosures.

What kind of payments can I expect to make in a Chapter 13 bankruptcy?
In short, most of my clients pay less than what they are now paying on car payments. Chapter 13 monthly payments over a 3-5 year period typically include one or more of the following: (a) existing car-loan balance(s) - or sometimes just the car's value - plus 4-5% interest; (b) past-due payments on a house or car (assuming you want to keep the house or car); (c) tax debt from the last 3 years; and/or (d) attorney's fees and the trustee fee. In fact, a Chapter 13 can often result in less money out of your pocket each month due to savings on car payments and possibly not having to pay anything on your home but your first mortgage.

What Assets Can I Keep in a Chapter 13 Bankruptcy?
In most Chapter 13 cases you can keep all of your assets.

Should I file a Chapter 7 or Chapter 13 Bankruptcy?
Chapter 7 bankruptcy will typically eliminate all unsecured debt and give you a "fresh start" in as little as 3-4 months. It will also prevent your secured-debt creditors from pursuing you should you decide to walk away from your home or vehicle. I generally prefer Chapter 7 for most clients, unless they can utilize Chapter 13 to (i) remove their second mortgage (HELOC) from their house; (ii) significantly reduce car or mortgage payments; and/or (iii) catch-up on past-due payments on their car or home loans.

Although Chapter 13 bankruptcy is a longer-term commitment, in certain situations it has some significant advantages. For example, if you owe more on your first mortgage than the value of your house, you can completely remove the second mortgage or home equity loan in a Chapter 13! In addition, you can reduce payments on your car and home loans. Further, you can spread out past-due payments on a house or car over 3-5 years if you so choose. Moreover, you can often pay off debts which are non-dischargeable in Chapter 7 (e.g., recent tax debts) over time.

How will Bankruptcy affect my Credit?
While bankruptcy will affect your credit to a degree, if you are in default on many bills, your credit score is likely already suffering. The good news is that filing for bankruptcy will wipe your debts clean on your credit report, and can sometimes even improve your credit score! See Wall Street Journal Article: "Declaring Bankruptcy Can Improve Your Credit Score."

While bankruptcy will stay on your credit report for seven (Chapter 13) or ten (Chapter 7) years, depending upon your situation you may qualify for a home loan in as short as 18-24 months. As noted in the above article, you can also achieve a 700 credit score within a short time with proper credit management. We can discuss ways to improve your credit after bankruptcy.

Contact an experienced and compassionate bankruptcy lawyer at Chris Jackson Law, PC today. We'll review your financial situation to determine whether a Chapter 7 or Chapter 13 bankruptcy is right for you.

Contact us for a FREE consultation: (831) 655-5111


"We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code."


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Why Bankruptcy?
  • Stop Harassing Phone Calls
  • Get Rid of Debt
  • Stop a Foreclosure
  • Stop Repossession
  • Remove Second Mortgage & Equity Line
  • Ease Pressure & Achieve Financial Well-Being
Chris Jackson Law, PC