Santa Cruz and San Jose Chapter 13 Bankruptcy

I have handled over 350 chapter 13 bankruptcy cases in my career. Not many Santa Cruz attorneys have this much chapter 13 experience.

A chapter 13 is a reorganization bankruptcy. You will be required to propose a plan to the court and make monthly payments, usually for several years.  Often the payments are surprisingly low. Many clients have filed chapter 13 where their payments were under $100 per month- but it depends on what kind of debts you have, how much property you own, and other factors.

Chapter 13 bankrputcies provide numerous benefits that chapter 7s do not, including;

- If you have two mortgages on real property, and the real property is worth less than the payoff of the first mortgage, you can erase the second mortgage and "strip" the lien entirely. This is a significant benefit to many home owners.

- If your auto loan is more than several years old you can reduce the amount of the loan to the value of the car, at a very low interest rate.

- You can pay tax debts that cannot be discharged because they are less than three years old over a long period of time without interest.

- If you are behind on your first mortgage you can "cure" default over a long period of time by making low monthly payments, even if the bank doesn't want you too.

- If you are applying for  loan modification, sometimes the bank will be more willing to give grant your modification if you are in a chapter 13, because foreclosing is more difficult. (The bank cannot foreclose unless the Court grants it permission.)

- If you have more property than you are allowed to keep in a chapter 7, you can do a chapter 13 and keep all your property, in exchange for making monthly payments to the court. The payments are usually very reasonable.

- If you have a student loan and cannot afford the monthly payments, you can suspend payments for the duration of the chapter 13, which can be as long as five years. You will owe the loan at the end of the plan, but you will not have to make payments while the case is pending.

Chapter 13 bankruptcies often work well for individuals with real estate problems, tax problems, automobile loans. It also is appropriate for people with high incomes or significant assets. Individuals who only owe credit card debt also often chose chapter 13 because you can relief from your creditors because only a very small down payment is required. Most of the attorneys fees can be paid though the plan, in reasonable monthly payments.

If you give me a call I would be glad to analyze your particular situation and help you decide which chapter works best for you.