How does Chapter 13 bankruptcy work? 5 Answers as of November 11, 2010

If I file chapter 13 to get rid of credit card debt, can I still keep up the payments for my car? I owe 5 years on it. Is it a very expensive process? Is it a long process? After bankruptcy is complete, are you allowed to apply for any new credit cards at all or buy or lease a car?

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Law Offices of Geoffrey Nwosu
Law Offices of Geoffrey Nwosu | Geoffrey Nwosu
Chapter 13 starts with filing a bankruptcy petition with the bankruptcy court that includes a proposal on how you plan to make payments on your debts. It is a repayment for 3 to 5 years. You generally will end up paying less than what you owed.

You can keep your car if you continue making payment on it. You may also decide to give up your car if you don't have any use for it any longer. Your Bankruptcy Attorney will advice you after reviewing your financial situation.

It will not cost you a lot to file bankruptcy if you file it pro se. However, you also risk dismissal if you improperly file it or omit important assets. It is very advisable to talk to many attorneys in your area to locate one that will do a great job for you for less price. The Bankruptcy Law Office of Geoffrey C. Nwosu is located in San Jose, California. Please visit our site.
Answer Applies to: California
Replied: 11/11/2010
Law Offices of Juan Dotson
Law Offices of Juan Dotson | Juan Dotson
You can always apply for new credit cards or credit. However, after a bankruptcy, you will probably be denied credit. Sounds like you need to take a bankruptcy credit counseling class. You may not have to file a bankruptcy. An attorney can assist you settling credit card debts so your salvage your credit rating.
Answer Applies to: California
Replied: 11/8/2010
The Shakoori Law Group
The Shakoori Law Group | Rachelle Shakoori
Chapter 13 is a payment plan which can last up to five years. Depending on your income and assets, you only pay a percentage of your unsecured debt. You can usually keep your car if you make the payments.
Answer Applies to: California
Replied: 11/8/2010
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Yes, you can continue payments on your vehicle in a Chapter 13 case. As far as attorneys fees, that depends on where your case is filed, so you'd need to consult with an attorney in your area. The process is 36-60 months depending on what you qualify for. You are allowed to apply for anything you want after the case is completed.
Answer Applies to: California
Replied: 11/8/2010
The Orantes Law Firm
The Orantes Law Firm | Giovanni Orantes
In a Chapter 13 case, in exchange for paying to a third-party (the Chapter 13 Trustee) whatever you have left-over every month after you pay for your mortgage/rent and other living expenses, you can discharge up to $360,000 in unsecured debt (such as credit card debt, ordinary judgments, etc., but not mortgages or loans secured by property, which are "secured" debts and can only be discharged if you give up the collateral). Of course, you can stop making the credit card payments and the like once you file the Chapter 13 case. Chapter 13 cases have other advantages, such as enabling you to strip the lien enjoyed by, for example, a junior loan that has your house as collateral (like equity lines of credit).

Many people have nothing left-over after they pay for their reasonable living expenses, but they have to tighten their belts and find at least about $100 per month. What this illustrates is that some people may pay $100 per month for 36 or 60 months and discharge up to $360,000 in unsecured debt.

Chapter 13 plans can last up to 5 years (*not* longer) if your level of earnings places you among the top half of the population in the state and your reasonable expenses do not consume all your income. Otherwise, they usually last only 3 years.

A Chapter 13 case is usually more expensive than a simple Chapter 7 case, but some lawyers, like myself, allow you to pay half of the fees through the Chapter 13 plan, which effectively makes the case almost as affordable as a straightforward Chapter 7 case.
Answer Applies to: California
Replied: 11/8/2010
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