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Chapter 13 bankruptcy is a repayment plan. When you fall behind on installment debts, a Chapter 13 bankruptcy is designed to help you catch up on them. For people who make too much money to file other types of bankruptcies, a Chapter 13 bankruptcy is a viable option. If you fall behind on your house payment, filing for Chapter 13 enables you to catch up on the arrearage, so that at the end of the bankruptcy, you would be current. If you have a second mortgage, or there is a second, third, fourth, fifth mortgage judgment lien, a California chapter 13 bankruptcy attorney at Cianchetta & Associates can strip those off in a Chapter 13 bankruptcy, and discharge those debts. There are Chapter 13 bankruptcies where perhaps you are behind on a car payment for a car that is necessary for your work, and the financing company is going to repossess it. We can use a chapter 13 to catch up on that as well.
Everything that is dischargeable in a Chapter 7 is also dischargeable in a Chapter 13. A Chapter 13 bankruptcy discharge is actually broader than a Chapter 7 discharge in that it wipes out debts that are not dischargeable in a Chapter 7 discharge. In a Chapter 13, you get what is called the “Super Discharge”, which allows you to discharge non-priority unsecured creditors and certain domestic relations obligations. If you had an equalizing payment in a divorce, for example, that can be discharged in a Chapter 13 bankruptcy. Although Chapter 13 bankruptcy is a repayment plan, many non-priority unsecured creditors need not be paid in full, or even at all in some case. Credit Card debt, medical bills, personal loans, older tax obligations and some divorce debts owed to an ex-spouse are a few extras that get discharged in a Chapter 13 but not a Chapter 7 bankruptcy.
The biggest difference is the time it lasts, Chapter 7 bankruptcy is complete typically in 4 months, Chapter 13 lasts for 3-5 years. Another difference is that a Chapter 7 is a liquidation bankruptcy that wipes out most of your unsecured debt and the trustee can sell your nonexempt property, whereas a Chapter 13 is a reorganization bankruptcy that enables you to keep your property through a repayment plan. Another main difference is the amount of time and the types of debt that are dischargeable. The Chapter 7 trustees also tend to be more aggressive towards the value of assets, as opposed to the Chapter 13 trustees. Chapter 7 bankruptcy allows qualifying debtors to quickly discharge qualifying debts and get a fresh start. Chapter 13 bankruptcy enables debtors to keep their property and catch up on missed mortgage, car, and priority debts through a repayment plan. Definitely discuss your options with a bankruptcy attorney, as the code is incredibly complicated, and every case is different.
A Chapter 7 typically takes less than 120 days if it is a no asset case. If it is an asset case, you are going to get your discharge in that same amount of time, as long as there are no objections to your discharge. However, your case may stay open for up to a year-and-a-half, which can have some adverse effects on moving on with your life. A Chapter 13, on the other hand, typically takes three to five years to complete. After completing the plan payments, the Chapter 13 can take months to close.
For more information on Chapter 13 Bankruptcy in California, an initial consultation with a qualified California chapter 13 bankruptcy attorney is your next best step. Contact us today for the information and legal answers you are seeking by calling (916) 685-7878 or by filling out our convenient online contact form.
Mr. Cianchetta is an OUTSTANDING attorney. I was a little nervous about seeing an attorney for my case. Mr. Cianchetta and his staff made my wife and I feel right at ease. He took extra time explaining what to expect before, during and after our process. His advice was right on!
- Jack M.
