Salinas and Monterey Chapter 13 Bankruptcy 

Chapter 13 differs from Chapter 7 in that instead of seeking a full discharge of your unsecured debts it works to reorganize your debts in such a way that it is affordable for you to pay them over a period of time.

Chapter 13 is known as a “wage earners” bankruptcy because in order to file Chapter 13 you must have an income. It’s particularly useful if you have considerable assets you want to protect such as homes, boats, real property, investment property, etc.

Failed Attempts at Loan Modification?
Perhaps you attempted to qualify for a loan modification and were told by your bank that you had to stop making your mortgage payments first. Then after a long process of exchanging documents you were denied the modification. Now you’re many months behind on your mortgage but would like to keep your home. Chapter 13 allows you an opportunity to get caught up on mortgage payments you’re behind on (arrears) making it possible for you to save your home.

Facing Car Repossession?
Chapter 13 works well  if you’re behind on your car payments and need time to get caught up and prevent repossession. Additionally, under certain circumstances, if you owe more on your car  loan than the car is currently worth, Chapter 13 can allow you to “cram down” the loan balance to the value of the car so that you are only paying for the car’s value and with lower interest.

Strip a Second Mortgage

If you owe more on your first mortgage than your house is currently worth and you if have a second mortgage (or home equity line of credit), you may be able rid yourself of that second mortgage through Chapter 13. This is called lien stripping. Essentially, your second mortgage is no longer secured by the collateral (i.e. your house) because there is not enough equity in the property (i.e. the property is upside down). Bankruptcy law allows for the second mortgage to be considered unsecured and therefore completely dischargeable through Chapter 13.

Regain Financial Stability
If you been hit with short-term financial hardships like illness, job loss or significant unexpected expenses, Chapter 13 bankruptcy can be an effective way to reestablish financial stability. If you’ve been knocked off balance by a crisis, but have regular income with which to make monthly payments, Chapter 13 bankruptcy can provide a powerful safety net.

Chapter 13 bankruptcy combines the automatic stay feature with a debt restructuring plan and a 3-5 year payment plan for catching up on payments. These features, and extended property protection, make it an attractive option for people seeking to avoid repossession or stop foreclosure.

Call for a free consultation to see if Chapter 13 is right for you! (831) 224-3199.