Orange County Bankruptcy Attorneys Chapter 13
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Chapter 13 Bankruptcy Lawyers in Orange County, CA
If you’re struggling with debt problems and need a structured way to regain control of your financial situation, an experienced lawyer at Marshack Hays Wood can help. As a trusted Orange County Chapter 13 bankruptcy law firm, we have guided clients in Irvine, Santa Ana, Costa Mesa, Huntington Beach, Garden Grove, Newport Beach, Orange, and beyond through the Chapter 13 bankruptcy process.
With the help of an Orange County bankruptcy attorney at our firm, you can create a manageable repayment plan that stops creditor harassment, prevents foreclosure, and puts you on the path to financial recovery. With extensive experience in bankruptcy protection, the law offices of Marshack Hays Wood provide the legal support you need to restructure your debts and move forward with confidence. Contact us today at (949) 333-7777 to schedule a consultation and take the first step toward financial stability.
Can Chapter 13 Help with My Debt?
If you’re struggling with insurmountable debt, filing for Chapter 13 bankruptcy could be your way out. Also known as the wage earners plan, this bankruptcy option allows individuals that earn a regular income to pay off all or most of their debts according to a payment plan. While Chapter 7 filings involve the liquidation of assets to recover from debts, Chapter 13 reorganizes your debt in a more manageable way over an extended period of time. Once you file for Chapter 13, the bankruptcy court will issue an automatic stay preventing creditors from contacting you to collect the debt.
What is Chapter 13 Bankruptcy in Orange County?
To file for bankruptcy in Orange County, you must complete the California bankruptcy means test. This test calculates your average monthly income, annual median income, and disposable income. Depending on where your median income falls in comparison to the California median income will determine how long your bankruptcy plan will last.
For example, if your median income exceeds the state’s median income levels, you will submit a 60-month payment plan for your bankruptcy. The other portion of the means test is calculating your disposable income. This income will be used to pay your unsecured creditors.
All bankruptcy filings in Orange County are handled by the Bankruptcy Court in Santa Ana. If you’re considering filling, you will want an experienced Orange County bankruptcy attorney to guide you through the entire bankruptcy process.
How Long Does Chapter 13 Bankruptcy Take in California?
The length of your Chapter 13 bankruptcy plan varies according to the results of your means test. Depending on the calculation of your median income levels, you could qualify for the 36-month plan. Those qualifying for the 36-month plan have a median income below the state median income. If you’re above California’s median income, you will likely have to complete the 60-month plan. Your bankruptcy payment plans will never exceed more than five years.
Why File for Chapter 13 Bankruptcy?
If you feel the weight of your debt is never-ending and impacting your life, filing for bankruptcy can help. Filing a Chapter 13 bankruptcy allows individuals with a steady income to pay off all or the majority of their debt over three to five years. Once you file bankruptcy, you will receive a court-appointed trustee to collect and distribute your payments.
Your debts will be reorganized, and a repayment plan will be implemented, with your trustee overseeing everything. That trustee will take your disposable income and apply it toward your debts. During this time, you will be able to erase your unsecured debt. If part of your debt woes involves the foreclosure of your home, this plan suspends any pending foreclosures and allows you to catch up on mortgage payments.
Who is Eligible for Chapter 13 in Orange County?
Anyone can file for Chapter 13 bankruptcy in Orange County if their combined total secured and unsecured debts are less than $2,750,000. Even individuals who are self-employed or operate an unincorporated business are eligible for Chapter 13. To qualify, you must be able to show that you have the means to make monthly payments. Individuals filing Chapter 13 must also be current on their tax filings.
When Should You Choose Chapter 13 Over Chapter 7?
Both bankruptcy options have advantages and disadvantages. For example, Chapter 7 bankruptcy lasts a shorter period than Chapter 13. While Chapter 7 is quicker, it mainly focuses on resolving unsecured debts like credit cards, personal loans, and medical bills.
The way that Chapter 7 works is by liquidating non-exempt items such as a second car, any property you own, and things of value such as art. Your cosigners are also at risk when you file for Chapter 7 bankruptcy, whereas, during Chapter 13, any cosigners are protected against collection efforts. Filing for Chapter 7 bankruptcy in Orange County will only stall a foreclosure on your home since this filing focuses on paying on unsecured debts and not secured debts like mortgage arrears.
What are the Benefits of Chapter 13 Bankruptcy?
While bankruptcy may sound like your last option, there are benefits to filing a Chapter 13 bankruptcy. Individuals who file for Chapter 13 can reschedule their secured debts, other than their mortgage, and repay them during this time. Another benefit of filing for Chapter 13 is that the court-appointed trustee distributes payments to creditors, so individuals have no contact with creditors during this time.
During the life of your Chapter 13 filing, you will stop accruing debt and may end up only paying a fraction of your debt. Courts often discharge the remaining debt at the end of Chapter 13. The most important benefit of filing a Chapter 13 bankruptcy is paying off mortgage arrears and keeping your home.
Can Filing Chapter 13 Stop a Foreclosure?
One of the advantages of filing for Chapter 13 bankruptcy is that individuals can stop the foreclosure of their homes. If a homeowner can prove that they can pay off their mortgage debt and pay all future mortgage payments on time, they can save their home from foreclosure.
Also, if you have a second mortgage on your home, you may be able to get rid of it through the process of “lien stripping.” This process allows individuals to turn their junior liens, like a second mortgage or secured debt, into an unsecured mortgage or debt. To qualify for lien stripping, you must show that the second mortgage or junior liens are higher than the home’s market value.
Do You Pay Back Everything in Chapter 13?
Chapter 13 contains three types of creditor claims: priority, secured, and unsecured. Depending on the type of creditor claim will determine what debt gets paid first. Your repayment plan will put priority claims first. These include alimony, child support, bankruptcy filing fees, wages owed to employers, and recently incurred taxes. These debts must be paid in full.
The second type of debt is secured debt. This debt is categorized as any debt that creditors can take back. Examples of secured debt are mortgages and car loans. To keep your home and car, payments must be made on time and will usually need to be paid in full.
The third type of debt is non-priority unsecured debt. The rest of your debt should fall under this category. This type of debt is not backed by collateral and cannot result in anything being taken from you. Unsecured debt includes credit card debt, medical bills, and personal loans. This debt is not usually paid in full. Instead, your disposable income is used to pay these off during the course of your bankruptcy.
There is a possibility that the court may discharge your remaining eligible debt. You could qualify for debt discharge if you’ve paid your domestic obligations, have not received a discharge for Chapter 7 or 13, and have completed an approved financial management program. Retaining an experienced Orange County bankruptcy attorney like those at Marshack Hays Wood can increase your chances of getting a debt discharge.
What Happens if I Miss a Payment in Chapter 13?
Missing a Chapter 13 payment has the potential to negatively impact your bankruptcy case. If you miss a payment, you could be at risk of your bankruptcy case being dismissed or being changed to a Chapter 7. If you make a payment several days late because of an unexpected financial emergency, it may not cause a bankruptcy dismissal, but it’s best not to take the chance.
If you encounter a financial emergency, you can explain the situation to your trustee, who should be able to assist you in avoiding any extreme consequences from the missed payment. When the bankruptcy payment is late in Chapter 13, the trustee cannot pay the creditors, so it’s important to let them know if you have an emergency that will affect your payment.
Why Do I Need a Chapter 13 Bankruptcy Lawyer?
Filing for Chapter 13 bankruptcy is a complex legal process. While you’re not required to have a lawyer for your bankruptcy case, it is recommended. The judge will often suggest that you retain a lawyer to handle your bankruptcy. Filing your bankruptcy on your own can be overwhelming.
Every form needs to be filed accurately; even the slightest misstep can result in losing your home or dismissing your case. Without a bankruptcy attorney, you could even end up paying more than necessary to get out of debt.
Contact the Orange County Bankruptcy Lawyers at Marshack Hays Wood
If you’re experiencing financial difficulties and think that filing for bankruptcy is your only solution, you need an experienced bankruptcy attorney on your side. The attorneys at Marshack Hays Wood have been helping Orange County residents with their bankruptcies for over 75 years.
If you’re considering filing for bankruptcy, our law office will evaluate your debt and determine if Chapter 7 or 13 is the right bankruptcy choice for you. When you start your bankruptcy proceedings with Marshack Hays Wood, one of our experienced bankruptcy attorneys will be with you every step of the way.
Start your road to debt relief by calling our office at (949) 333-7777 or completing our online intake form to schedule your initial consultation today.
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At Marshack Hays Wood, our attorneys provide the legal support you need to move forward with confidence. Let us help you take the first step toward financial stability.
