Understanding Riverside Chapter 13 Bankruptcy

 
Because of the new means test that is in place for all bankruptcies filed throughout the country, including those filed in Riverside County, you may find that while you do not qualify to file for Chapter 7, a Riverside Chapter 13 bankruptcy may be possible. For individuals who are able to make some payments, or those whose debt is largely comprised of debts that cannot be discharged under a Chapter 7 bankruptcy, Riverside County Chapter 13 bankruptcy may make the most sense.

Many people often misinterpret the requirements of the Riverside Chapter 13 repayment plan. They look at their debts and think there is no way to pay them all off within a 3 to 5 year period, and as such, think that they cannot take advantage of a Chapter 13 bankruptcy. However, the law only requires that you pay off certain priority debts in full – things like child support and taxes – other debts do not have to be paid in full. In fact, you can pay as little as 10% on some debts, or nothing at all, so long as what your creditors receive under your payment plan would be equal to that which they would receive under a Chapter 7 liquidation. This means that if your creditors would receive nothing if you filed for Chapter 7, you typically don’t have to include them on your repayment plan.

You are still required to attend a credit counseling class before you file for a Riverside bankruptcy, and in Chapter 13, this class can be of real benefit to you, as the class can help you to work out a reasonable budget, which will be required as a part of your Riverside County Chapter 13 bankruptcy case.  Having financial discipline is important, because you will be expected to begin payments to the trustee while the bankruptcy case is still pending. Your debts must also fall within accepted guidelines – you cannot owe more than $1,010,630 in secured debt nor have more than $336,900 in unsecured debt. If your debts exceed these limits, you will not be allowed to file for a Chapter 13 bankruptcy.

Riverside Chapter 13 bankruptcy is more involved and has more considerations than a Chapter 7 but the benefits can be substantial for certain individuals. If you are considering bankruptcy but aren’t certain which type to file or what you will qualify for, talk to us. Our Riverside County Bankruptcy Law firm has helped clients in all types of financial situations gain peace of mind and a fresh start through bankruptcy. Contact us today, and arrange for a free initial case evaluation. One call could be all that stands between you and a fresh start, free of liens, consumer debt, and with a payment plan that works for your unique circumstances.