A Chapter 13 bankruptcy in California can provide a lifeline for those in need of debt relief.
You may be wondering if filing for bankruptcy through Chapter 7 or Chapter 13 bankruptcy in California would help relieve your debt. Filing Chapter 13 is an important decision. You commit to a bankruptcy repayment plan that could last 3 or 5 years.
This is why understanding the bankruptcy differences and understanding your California Chapter 13 plan payment is crucial to make the most informed decision.
Chapter 13 Bankruptcy vs Chapter 7 California Bankruptcy
The most common types of consumer bankruptcies in the United States are Chapter 7 and Chapter 13 bankruptcies.
Chapter 7 Bankruptcy
A California Chapter 7 Bankruptcy is generally referred to as “outright bankruptcy” or “liquidation bankruptcy“. In this bankruptcy, you would have no repayment plan. However, your assets could be sold to pay off your unsecured debts. These assets could be sold if you hold substantial equity in the assets beyond the permitted bankruptcy exemptions. A bankruptcy exemption protects a certain amount of equity in an asset.
To understand if you qualify for a Chapter 7 bankruptcy, there is a means test.
Chapter 13 Bankruptcy
A California Chapter 13 Bankruptcy is a repayment plan bankruptcy. You pay off some of your unsecured debt on a three to five year bankruptcy plan, unless it’s a 100% plan.
You can keep your assets and get rid of debts that wouldn’t go away in a Chapter 7 case by filing under Chapter 13. However, you must have a steady source of income to qualify for a Chapter 13 bankruptcy discharge (debt cancellation).
You are also subject to the bankruptcy court during the bankruptcy plan, so you cannot sell assets or incur debts without court approval. Let’s take a closer look at Chapter 13 bankruptcy in California.
Calculating Your California Chapter 13 Bankruptcy Payments
Calculating a Chapter 13 plan can be complicated. Paying for your Chapter 13 plan in California depends on your personal financial situation. As such, you may consider using a chapter 13 bankruptcy payment calculator to estimate your Chapter 13 plan payment.
Let’s discuss some of the factors that make up your Chapter 13 payment plan.
First, there are your assets, so if you have assets that have a large amount of non-exempt equity, your payment may be higher.
Second, disposable income can affect your Chapter 13 plan payment. If you have more disposable income, your payment could be higher.
Third, the types of debts you have could affect your payment plan, such as aliminoy, child support, and administrative fees.
Then, some recent Chapter 13 transactions may impact your plan payment. Please note that the cost of filing for bankruptcy in california is $338 for a Chapter 7 bankruptcy and $313 for a Chapter 13 bankruptcy, but that does not include attorney fees.
California Bankruptcy Exemptions
California Bankruptcy Exemptions allow debtors to retain their assets when filing an application for receivership. Exemptions protect the net equity (value of assets after deducting liens) in the property from the court and your creditors.
Some states allow debtors to choose between federal and state bankruptcy exemptions. California debtors must use California bankruptcy exemptions. However, there are two sets of California bankruptcy exemptions to choose from when filing Chapter 13. You must choose one or the other. Careful analysis of each set of exemptions is necessary to determine which set provides the best protection for property in the event of bankruptcy.
Also, California bankruptcy exemptions can be found in the California Code of Civil Procedure. §703 and §704. California bankruptcy exemptions are adjusted periodically. You should check with the bankruptcy court or a bankruptcy attorney for the most recent numbers.
In a Chapter 13 bankruptcy case, the equity in the property may affect your bankruptcy plan payment. Therefore, claiming the correct bankruptcy exemptions helps reduce your California Chapter 13 plan payment amount.
Where are the California bankruptcy courts located?
California is a large state, so it has four bankruptcy districts. The Bankruptcy Districts for California are:
For example, in each district you can have several divisions. Divisions are listed next to each of the districts above. Each division serves various counties within that division. The county in which you reside when you file a Chapter 13 case determines the district and division that handles your case.
Who Are California Chapter 13 Bankruptcy Trustees?
California has 13 permanent Chapter 13 trustees. Each trustee is assigned to cases based on the district and division of the case.
A Chapter 13 trustee administers your Chapter 13 case. The trustee reviews your bankruptcy forms and your bankruptcy plan. The Chapter 13 trustee is responsible for receiving your bankruptcy payments and paying your creditors under the terms of your confirmed Chapter 13 plan.
The stream list of chapter 13 administrators in california can be found on the United States Trustee website.
Do I have alternatives to filing Chapter 13 in California?
Yes, you may have several alternatives to filing Chapter 13 in California. You can also consider a debt consolidation loan or other debt settlement options. The key is to explore all debt relief options, weigh the pros and cons of each option, and choose the one that’s right for you.
Chapter 7 Bankruptcy
One of the most popular debt relief options is Chapter 7 bankruptcy, as it is often the cheapest and fastest form of debt relief.
That said, you generally must qualify for Chapter 7 bankruptcy by being under the bankruptcy income limits.
California debt relief
Debt relief is a common alternative to Chapter 13 bankruptcy because it is also a repayment plan based on a payment plan. That said, you don’t get the protection from creditors that you have in a Chapter 13 bankruptcy.
With debt relief, a company or you negotiate the amounts owed on your debt. So a company can negotiate your debt from $10,000 to $5,000 rather than charging their fees.
There are companies such as California Debt Relief that help individuals with debt relief. That said, it may be useful to consider the California Debt Relief Reviews because it looks like they will potentially refer you to another debt relief company.
With debt management, a nonprofit credit counseling agency would negotiate your interest rates. So, a credit counseling agency can negotiate your interest rates from 22% to 7%.
That said, you may not save as much in a debt management plan compared to a debt settlement plan, because a reduction in interest rates may not benefit you as much as a reduction in debt. balance.
A Chapter 13 bankruptcy in California can provide a lifeline for those in need of debt relief. This can be helpful to those who do not qualify for Chapter 7 bankruptcy or do not wish to pursue Chapter 7 bankruptcy.
That said, debt settlement or management can be cheaper than Chapter 13 bankruptcy, so it’s worth considering all of your options.