Chapter 13 Bankruptcy in Escondido

Making decisions about Chapter 13

Mark A. Duxbury helps clients evaluate their insolvency issues and choose a financial remedy that best suits their needs.

When debt becomes unmanageable, yet you have substantial assets, Chapter 13 may provide a viable answer. Referred to as reorganization and also as a wage earner’s plan, Chapter 13 is for people who have dependable future income and can manage monthly payments to pay off debt. The Escondido bankruptcy law firm of Marc Duxbury can assist you in determining if filing chapter 13 is right for you.

Eligibility for filing Chapter 13 bankruptcy

Changes under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) made a greater number of people ineligible to file Chapter 7, which left Chapter 13 as an alternative. The BAPCPA limits eligibility for Chapter 7 based on a means test which calculates income and compares it to the California median income.

If your income calculation is higher than the calculated median income amount, you must use Chapter 13, which in many instances protects assets—allowing you to keep your home, car, and investments. When filing Chapter 13 in Escondido or Temecula, the bankruptcy court determines whether a three- or five-year plan is appropriate for your income and debt load.

The Bankruptcy Code also restricts your eligibility to file Chapter 13 based on the amount of debt. You may not file if your debt is greater than:

  • $336,900 in unsecured debts (credit card debt, medical bills, loans not secured by collateral, etc.)
  • $1,010,650 in secured debts (house mortgage, car loan, appliance payments, etc.)

Benefits of filing Chapter 13

As in other types of bankruptcy, an automatic stay goes into effect preventing creditors from continuing collection efforts. This legal action alone can save you from tremendous stress and offer relief from creditors.

Chapter 13 works much like a debt consolidation plan, and lowered interest or paying off principal are sometimes options that Mark A. Duxbury may be able to negotiate on your behalf. You usually can stop foreclosure, provided that you cover delinquent payments during the period of your repayment plan. Creditors do not hold co-signers liable for your debts, as long as you make regular monthly payments.

For more information about an Escondido Chapter 13 or Chapter 13 bankruptcy in Temecula, please contact us at (760) 438-5291 or toll free at (877) 817-7373.