Bankruptcy

A Financial Fresh Start

A Chapter 13 bankruptcy or reorganization of debt is available solely to individuals. A Chapter 13 bankruptcy allows you to keep your assets while paying back a portion or all of your debt under the supervision of the bankruptcy court. A Chapter 13 bankruptcy may be a good solution for individuals who have a great deal of assets, such as businesses or investment properties, but also have a great deal of debt they are unable to manage. Having many assets does not necessarily equal having a great deal of disposable income to repay creditors. A Chapter 13 bankruptcy allows individuals to keep their assets and pay back their creditors in accordance with a criteria that looks at their income, equity in non-exempt assets and disposable income of an individual. A Chapter 13 bankruptcy may also be the right answer to someone seeking to save their home from foreclosure as it allows an individual to catch up with past due arrearages owed to the mortgage company, homeowners or condominium association, and real estate property tax collector.

A Chapter 13 bankruptcy also allows the “stripping-off” or eliminating of second and/or third mortgages, home equity lines, and mechanic liens on homestead property. This means that the debt associated with your second or third mortgages, etc., would no longer be considered secured debt, but rather unsecured debt just like credit card or medical debts and would be treated as such in your case. At the conclusion of your Chapter 13 bankruptcy and issuance of the discharge order you would own your property without the stripped-off mortgages or liens existing against and you will no longer be legally liable as to that mortgage debt.  A Chapter 13 bankruptcy also allows the “stripping-down” of mortgages on investment properties to the actual value of the property. This allows individuals who invested in real estate properties to retain the properties for the actual market value on the date the bankruptcy case is filed versus for the actual amount owed to the lender. A Chapter 13 bankruptcy also allows as of April 1, 2013 modification of your mortgage via the bankruptcy court. The new loan modification program seeks to expedite the loan modification process so that you are not bounced around endlessly by the mortgage company with no accountability. In a Chapter 13 bankruptcy you can reorganize all of your secured and unsecured debt together and what you pay your unsecured creditors in a Chapter 13 is based on the equity of your assets or the income test, whichever is greater. In either a Chapter 7 or 13 bankruptcy you must pay the equity that exists in your non-exempt assets. The key difference is that in a Chapter 7 bankruptcy you must pay the equity over immediately, in a very short repayment period or turn over the non-exempt asset to the Trustee. Whereas, in a Chapter 13 bankruptcy you would pay the equity in your non-exempt assets over a period of three to five years.

If you qualified for a Chapter 7 bankruptcy and are choosing to file a Chapter 13 bankruptcy to save your home you will still pay the same amount to your unsecured creditors, the only difference is you will do so over a longer period of time. During your consultation an evaluation will be completed to see which bankruptcy chapter will provide you with the financial fresh start you are seeking.

Bankruptcy is a good legal solution to a bad financial situation; you owe it to yourself to explore all of your options. At the law firm of Sandra Navarro-Garcia, P.A. we have helped hundreds of people just like you obtain a financial fresh start and get their lives back on track with either a Chapter 7 or Chapter 13 bankruptcy. Do not settle for less than knowing your full legal rights when dealing with your creditors. Every situation is different, at the law firm of Sandra Navarro-Garcia, P.A. we will provide you a comprehensive consultation in order to evaluate what legal options you may have available. The creditors have attorney’s working hard for them, you should too! The law firm of Sandra Navarro-Garcia, P.A. can help you battle the possible loss of your home or investment property due to a foreclosure action, car repossession, mounting credit card, medical and IRS debts. The first step towards a financial fresh start begins with learning what your rights and responsibilities are as to dealing with your creditors. Do not delay as time is of the essence when dealing with these matters, contact the law firm of Sandra Navarro-Garcia, P.A. and schedule your consultation today.