Understand the benefits and drawbacks of filing for Chapter 13 bankruptcy in Sacramento, California

1. Understand the benefits and drawbacks of filing for Chapter 13 bankruptcy in Sacramento, California Families and individuals who make a regular income but are having trouble making their debt payments can file for Chapter 13 bankruptcy. A person must pay back a portion of their unsecured obligations in most Chapter 13 bankruptcy cases, interest-free. A trustee designated by the court will draft a debt consolidation plan and grant you three to five years to pay off your debts. The trustee will receive monthly payments from you and distribute them to your creditors. The person filing for Chapter 13 bankruptcy is typically compelled to repay a tiny portion of their unsecured debt—about 1%—each month. Because Chapter 13 is so complicated, it makes sense to work with a knowledgeable Chapter 13 bankruptcy Sacramento attorney who can help you maximize your advantages and lessen your stress while your case is ongoing.

2. One advantage of filing for Chapter 13 bankruptcy is that, rather than having to pay your creditors separately, you will only have to pay your Chapter 13 Sacramento trustee once, and they will then pay your creditors according to the rules of the plan. Under Chapter 13 bankruptcy Sacramento, you will still be able to keep your house no matter how far behind on your mortgage payments you are. This holds true even if your house is about to be sold and a foreclosure complaint has been filed. Even if your car is repossessed, you are still entitled to keep it. By making modest monthly payments, you can also make up for past-due mortgage payments through bankruptcy. Conserving cash during Chapter 13 bankruptcy You may be able to use Chapter 13 to discharge your second mortgage, depending on the value of your house and the amount owed on your first mortgage. The court may be asked to include your yearly income tax refund in your Chapter 13 bankruptcy plan by your Chapter 13 bankruptcy Sacramento attorney. In this manner, as long as your case is pending, you will be allowed to keep and receive a return annually. Chapter 13 bankruptcy Sacramento allows for the discharge of some debts that cannot be erased under Chapter 7 bankruptcy. This covers debts incurred as a result of a property settlement or divorce. Chapter 13 bankruptcy can be used to discharge or eliminate a variety of other debts; Recovery Law Group's knowledgeable Sacramento Chapter 13 bankruptcy attorney will assist you on your alternatives. Chapter 13 bankruptcy's effects Before filing for bankruptcy, you must undergo credit counselling through a US Trustee Program that has been approved and finish the process at least 180 days in advance. In a meeting with your creditors, which usually takes place three to nine weeks before the filing of your petition, your trustee will also put you under oath. Additionally, keep in mind that filing Chapter 13 bankruptcy in Sacramento won't eliminate your debt. Instead, it will put a stop to your payments while you make efforts to repay them. Your Chapter 13 bankruptcy in Sacramento won't release you from some financial obligations, like student debts, alimony, or child support, and it will remain on your credit report for up to ten years.