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San Diego Bankruptcy Blogs from April, 2015


No matter what, you may be anxious about having to file for bankruptcy in California. You may be worried about what it means for yourself and your future, or whether or not you will be able to repay your debts and start anew. No matter how intimidating bankruptcy can be, there are numerous reasons why filing may be to your benefit and can help you move forward in your life. The first step once you decide to file is determining what kind of bankruptcy is right for you.

Should I file for Chapter 13 bankruptcy?

There are two main types of bankruptcy that you may file for: Chapter 7 and Chapter 13. Chapter 7 will eliminate all debts entirely, while Chapter 13 requires that you pay back a portion of what you owe. While some people think that Chapter 7 is the best option since it completely wipes their financial slate clean, which is not always the best option. Additionally, not everyone is eligible to apply for Chapter 7 bankruptcy, such as those that have filed for Chapter 7 bankruptcy within the past eight years, those whose income is over the median income for a similar household, and have the means to pay back some debts through a Chapter 13 filing.

However, even if you qualify for a Chapter 7 bankruptcy filing, Chapter 13 may be a better decision if:

  • You are behind on mortgage payments or a car loan
  • A codebtor exists on an existing debt
  • You have a student loan or other obligation unable to be discharged
  • You want to keep non-exempt property
  • You have a genuine desire to pay back what you owe

In a Chapter 13 bankruptcy plan, some debts must be repaid in full and disposable income must go towards paying back these debts. In general, a five year plan will be proposed to your creditors detailing how you will be able to repay them for what you owe as long as everything continues as expected. Once you have repaid what you owe, the debts that can be discharged will be wiped out and you will be able to start fresh.

Different people’s financial situations mean that different forms of bankruptcy might work better for them. Chapter 13 is an option that anyone can apply for that can help them reduce what they owe. Our San Diego bankruptcy attorneys are here to guide you through the process. Schedule your free consultation with San Diego Legal Pros today!

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