Chapter 13 Bankruptcy is a "reorganization" plan that allows you to keep your assets while providing you a way to achieve a fresh start.

People usually file Chapter 13 Bankruptcy in my Sacramento, Stockton, and Fairfield Bankruptcy Attorney Office for the following reasons:

1.  they want to catch up on their mortgage or auto loan in order to stop foreclosure or car repossession;

2.  they want to put their tax debts in a payment plan to stop IRS tax levy or wage garnishment.  This also works with other tax collection agencies like Franchise Tax Board.

3.  they have more assets than what the California exemption will protect including business

4.  they have a home equity line of credit, second mortgage, or other junior liens securing their house or other real estate that they want removed.  This is called Chapter 13 Bankruptcy lienstrip.  This is becoming less common as the value of house rises in the Sacramento, Roseville, Woodland, Modesto, Stockton, and Fairfield, California area.  One of the conditions is that the value of your house must be worth less than the balance of your first mortgage before any Bankruptcy Attorney can consider you for Chapter 13 Bankruptcy lienstripping.

 5.  they filed a Chapter 7 Bankruptcy within the last 8 years and need debt relief through bankruptcy filing, usually, to stop wage garnishment or lawsuit by creditors.

Although Chapter 13 Bankruptcy is a reorganization plan, it does not mean that you have to repay your debts in full.  You can pay a fraction of what you owe and the rest of the debt that is not paid through the plan is eliminated or "discharged", using bankruptcy terminology.  How much you have to repay depends on a long calculation of your disposable income involving household income, household expenses both standardized and some actual, and amount owed to priority debts like child support, alimony, and recent tax debts.  You must repay your priority debts in full in your Chapter 13 Bankruptcy Plan.

You will have enough income to pay your living expenses and your Chapter 13 Bankruptcy Plan.  You will need to submit a detailed budget to the Sacramento or Modesto Bankruptcy Court to prove that you are capable of completing your Chapter 13 Plan.

If you need to stop a foreclosure by catching up with mortgage arrears through a Chapter 13 Bankruptcy payment plan, you must do so within 60 months.

Another benefits to Chapter 13 Bankruptcy is it eliminates debts that are not dischargeable in Chapter 7 Bankruptcy like recent tax penalties and nonsupport debts incurred in the course of a divorce.

For more information on how you can benefit from Chapter 13 Bankruptcy filing call to schedule a consultation with Muoi Chea Bankruptcy Attorney in Sacramento, Stockton, or Fairfield, California Offices.