When Can a Chapter 13 Bankruptcy Benefit You?
Chapter 13 bankruptcy is an option for people who are unable to pay their debts but are making an income that would allow them to repay some or all of the debt on a schedule. There are many benefits to utilizing bankruptcy, and an experienced California bankruptcy attorney like those at the Law Offices of Omar Gastelum and Associates are here to help determine whether this option is right for you.
To learn more about the bankruptcy process and the wide range of legal services offered to our clients, contact our office today.
The Benefits of Chapter 13 Bankruptcy in Los Angeles Metro Area
When you have financial difficulties, considering bankruptcy may be an option. People are sometimes surprised that bankruptcy can be advantageous––it’s not the end of the world. Chapter 13 bankruptcy specifically offers many benefits.
One of the biggest benefits of filing for Chapter 13 bankruptcy is that it can help you avoid foreclosure on your home. Once this type of bankruptcy case is filed, all foreclosure proceedings are stayed on the property. This type of bankruptcy allows for a homeowner to make up missed payments and cure any delinquency over a period of three to five years.
Consolidating Debts Into a Single Payment
Another benefit is that it allows for the debtor to consolidate multiple payments to creditors into one single payment to the bankruptcy trustee. Creditors are required by law to stop harassing debtors that have filed Chapter 13 bankruptcy, and the trustee divvies up the single payment to the various creditors until the loan is paid off or the debt is discharged. This also makes it less likely that a debtor will accidentally forget about a payment to a creditor during the process and ensures that the monthly payment made by the debtor is affordable based on their current income.
Maintaining Possession of Property
Chapter 13 bankruptcy also allows a debtor to maintain possession of other property that would otherwise be repossessed by creditors. One common example of this is getting to keep a vehicle, which many people need to get to work and maintain an income. Similar to staying a foreclosure, Chapter 13 bankruptcy also allows for a debtor to make payments on other property debts like a car loan.
Rebuild Your Credit More Quickly
One final benefit is that it allows a debtor to rebuild their credit more quickly than other types of bankruptcy, such as Chapter 7. This type of bankruptcy only stays on a credit report for seven years as opposed to ten years with a Chapter 7. A debtor who successfully completes a Chapter 13 bankruptcy is also able to obtain new lines of credit within one to three years, although they may be at higher interest rates. To learn more, talk to our office now.
Contact Our Experienced Bankruptcy Attorneys in Los Angeles Today
Are you interested in learning more about filing for Chapter 13 bankruptcy in the Los Angeles area? If so, the knowledgeable California bankruptcy attorneys at The Law Offices of Omar Gastelum and Associates are here to help. Call the office or contact us today to schedule a consultation of your case.