Chapter 13 Bankruptcy

Irvine Bankruptcy Attorney

When a person does not qualify for Chapter 7 bankruptcy after taking a means test they will most likely be able to qualify for Chapter 13.  In most cases, individuals who file for Chapter 13 bankruptcy have suffered from a temporary loss or financial emergency such as a sudden hospital stay that has put them too far behind in debt to catch up.  Chapter 13 does not eliminate debt but it does consolidate debt and restructures it into a monthly payment plan that is affordable.  It allows a person with a steady income to pay first for their usual living expenses and then make payments towards their debt with the remainder. There are actually a number of benefits associated with Chapter 13 bankruptcy, including the ability to save a home from foreclosure.

Under Chapter 13 bankruptcy, an individual is allowed to pay off their debt interest free over the term of the repayment.  It is expected that this will take between 3 to 5 years.  A person interested in learning more about Chapter 13 bankruptcy should speak to an Irvine bankruptcy lawyer at the Law Offices of Arthur H. Hausmann.  The firm also services clients residing in Huntington Beach, Costa Mesa, Anaheim and Santa Ana.

Another benefit of Chapter 13 is that a person's assets, including any equity in a home or other real estate are not subject to sale in order to settle their debt as is the case in Chapter 7 bankruptcy.  Chapter 13 can stop a foreclosure but the mortgage payments will need to be included in the repayment plan.  A qualified bankruptcy attorney can help negotiate such agreements and keep the debtor and their family in their home.

Bankruptcy Lawyer in Irvine

Along with a manageable monthly payment, Chapter 13 bankruptcy protection also ends any collection calls or harassment.  Once a repayment plan is submitted and approved by the bankruptcy trustee, no creditors are allowed to make any further contact for any reason.  When the repayment program is completed successfully and all a person's debts are repaid, the bankruptcy is finalized and complete.  While bankruptcy does appear on one's credit history, the repayment of debts has less of an effect on a credit standing than other forms of debt cancelation, such as Chapter 7.

Contact an Irvine bankruptcy attorney to learn about the benefits of Chapter 13 bankruptcy.  Find out how a person can repay their debt interest free and end all the collection calls.