Understanding Bankruptcy

Bankruptcy is a legal process that gives individuals or businesses struggling with debt the chance to seek relief and make a fresh start. It’s important to remember that while it can involve the liquidation of certain assets, the objective of bankruptcy is debt relief, not asset loss.

The Role of Exemptions

Exemptions play a critical role in bankruptcy cases, often determining whether or not you get to keep your home or car. These are laws that protect specific types of property or assets up to a certain amount, effectively making them “exempt” from seizure in a bankruptcy filing. In California, there are two exemption systems to choose from:

• System 1, often termed as “homestead exemption,” generally favors those with significant equity in their home.
• System 2, or “wildcard exemptions,” can be ideal for protecting a variety of properties, including vehicles, or cash in bank accounts.

Your bankruptcy attorney can aid you in understanding these exemptions and assist in choosing the best system for your specific situation.

Asset Protection in Bankruptcy

Protection of your assets during bankruptcy depends greatly on the type of bankruptcy being filed. There are two primary types:

• Chapter 7 – This is often referred to as “liquidation bankruptcy.” Here, while some of your assets may be sold, some assets, such as your home, cars, and furnishings, can be protected up to a certain limit, using exemptions, depending on the value of the assets.
• Chapter 13 – This is the “reorganization bankruptcy.” You will be able to keep your property while reorganizing and repaying your debts over time.

With appropriate planning and the right strategy, you can protect your most treasured assets during bankruptcy.

How a Redding Bankruptcy Lawyer Can Help

When it comes to navigating the complexities of bankruptcy, exemption systems, and asset protection, an attorney can provide valuable insights. A skilled bankruptcy attorney at the Liviakis Law Firm can offer advice tailored to your unique situation, guide you through the exemption selection process, and help strategize for maximum asset protection. As each case is different, engaging a bankruptcy attorney’s services helps ensure your assets are secured to the fullest extent possible.

In conclusion, while bankruptcy may seem daunting, with the right legal guidance, it can be a way to relieve your financial burden without losing your home or car. We invite you to call Liviakis Law Firm, and we will happily assist you on your journey to financial recovery.

Bankruptcy and foreclosure are two legal procedures that affect many individuals in California. It is essential to understand how these processes interact, especially for homeowners facing financial difficulties. Let’s delve into whether bankruptcy can stop foreclosure in California.

What is Foreclosure?

Foreclosure is a legal procedure that lenders use to reclaim properties from borrowers who fail to meet their mortgage obligations. In California, lenders may choose a judicial or non-judicial foreclosure, depending on the situation and the specific terms of the mortgage contract.

Bankruptcy as a Legal Shield

Filing for bankruptcy can provide a temporary halt to foreclosure proceedings, thanks to a mechanism known as the automatic stay. This immediate injunction prevents creditors from collecting debts and proceeding with foreclosure during the bankruptcy process. However, the effectiveness of this legal shield depends on the type of bankruptcy filed — Chapter 7 or Chapter 13.

Chapter 7 Bankruptcy and Foreclosure

Filing a Chapter 7 bankruptcy can temporarily pause foreclosure. However, it doesn’t provide a long-term solution to save your home. The automatic stay stalls foreclosure proceedings, but once the bankruptcy is discharged, the lender can resume the foreclosure process. A foreclosure lawyer can provide an estimate of how long the process will take.

Chapter 13 Bankruptcy and Foreclosure

On the other hand, Chapter 13 bankruptcy can be a pathway to save your home from foreclosure. Unlike Chapter 7, Chapter 13 allows the debtor to develop a repayment plan, which can include mortgage arrears. As long as the debtor keeps up with the plan’s payments, the lender cannot foreclose the property.

Seeking Legal Advice

Bankruptcy and foreclosure are complex legal processes. It’s crucial to seek legal advice if you’re considering bankruptcy as a means to stop foreclosure. At Liviakis Law Firm, we are dedicated to helping our clients navigate these difficult situations. Contact us at 916 459 2364 to discuss your options.

If you are stuck in debt, you should consider filing for personal bankruptcy, which helps clear away your debts. Personal bankruptcy includes two types, Chapter 7 and Chapter 13.

While Chapter 7 means liquidating some of your assets if you have any that exceed the limits on value, Chapter 13 implies repayment of debts from your future income. If you are considering filing for bankruptcy, you must be concerned about what happens to your vehicle through the bankruptcy process. The fate of your car ultimately depends upon the type of bankruptcy filed by you and the equity present in the vehicle.

Can you keep your vehicle after filing for bankruptcy?

To save your vehicle through the bankruptcy process, you need to be aware of several factors that could have a say on it. The car is always regarded as an asset and is of utility value. The trustee and creditors can investigate this aspect to determine how much of their debt will be paid. The vehicle may also be counted under an exemption, thus safeguarding it from repossession if the lender agrees to accept future payments from the debtor. The factors that help to retain the vehicle are varied, and they are as follows:

• The type of bankruptcy being filed
• The value or cost of the vehicle
• The nature of exemptions that are applied to a place where one lives

What happens to your vehicle in a Chapter 7 bankruptcy?

In chapter 7 bankruptcy car creditors often pressure a debtor to sign a new contract wherein the debtor will be personally liable should future payments fall delinquent. Creditors often threaten to take the car even while the debtor is current on the payments. This creates a dilemma for debtors who wish to maintain possession of their vehicles, especially when they need the car for work transportation.

What happens to your car in Chapter 13 bankruptcy?

Chapter 13 bankruptcy is somewhat different from Chapter 7. It does not liquidate non-exempt assets for repayment to creditors. You will instead enter a debt repayment plan. Your property may be protected from repossession by way of Chapter 13 bankruptcy. A reorganization case will ensure that your finances are reorganized to enable you to begin the process of repayment. If you own a vehicle outright, you will be able to retain or keep it.

If you would like more information about how bankruptcy can help you, contact an Elk Grove bankruptcy attorney.

When someone is considering bankruptcy, they may worry they will lose their assets such as vehicles, homes, jewelry, etc. Many times, debtors sell some of their property to pay for their bankruptcy attorney or bankruptcy fees. There are a few guidelines and rules you should follow if you sell the property to a family member just before your bankruptcy case to avoid negative actions such as the dismissal of your bankruptcy case or being charged with bankruptcy fraud.

Selling Nonexempt Property

You can sell your nonexempt property during bankruptcy if you meet certain specific requirements:

• You needed the money for necessities such as housing, food, utilities
• You sold the property at fair market value
• You kept excellent records of the transaction
• You obtained trustee and court permission beforehand

If you have documented the reasons and can show that you needed the money for necessities, you can avoid any issues with the bankruptcy court. If you use the money for any other purpose, you should speak to a bankruptcy attorney before selling the property to ensure that you are legally able to do so.

Chapter 7 Bankruptcy

When you file Chapter 7 bankruptcy, you will submit paperwork declaring your exempt and nonexempt property. The bankruptcy trustee will evaluate your nonexempt property and determine if it could be sold to satisfy your debts to your creditors. Since the bankruptcy trustee will sell the property, there is no reason for you to sell it if you do not need it for necessities.

Avoiding Bankruptcy Fraud

If you try to hide any previous transactions in the past three to five years before your bankruptcy, you may risk penalties such as dismissing your case, paying restitution, or serving jail time for fraud.

Contacting a Citrus Heights bankruptcy attorney will help you navigate the complicated laws of your bankruptcy case.

Having easy access to a vehicle is essential for most of us to get to our jobs, schools, grocery store, etc. Therefore, having a vehicle payment is the most common type of consumer secured debt. Since it is a secured debt, the lender has the right to repossess the vehicle if you get behind in your payments. Sometimes as early as one missed payment, although that rarely happens. Contacting a bankruptcy attorney can stop the legal process and help you decide if filing bankruptcy is the best course of action for you.

Repossession Process

It’s relatively easier for the lender to repossess the vehicle than it is for a mortgage company to foreclose on your home or the credit card companies to take legal action against your bank accounts. A lender can come onto your property, hook the vehicle up to a truck, and haul it away. In some states, you are required to maintain vehicle insurance at all times. If you lose coverage of your vehicle from your insurance company, your finance company can legally take possession of your car.

After the first missed payment, you will usually receive a letter or a phone call reminding you to make a payment. According to your contract, there may also be a late fee included. If you fail to catch up on the payments, the lender may act to come on your property day or night and repossess the vehicle.

Cannot Enter your Closed Garage

A lender or a third party acting on behalf of the lender can come on your property to take the vehicle, but they cannot enter a closed garage without your permission. They are also not allowed to use force or threaten you. If these laws are violated, you have the right to seek legal damages against the lender or the third party. Any property that was inside your vehicle at the time of the seizure is still your property. The lender must make every effort to protect your belongings and let you know where you can retrieve it.

If you do not catch up on the payments, the lender can decide if it wants to sell the vehicle. The lender is required by law to let you know when and where your vehicle will be sold at auction. You can choose to bid on your car. The sale must be commercially reasonable and not sold below the fair market price. If the lender sells the vehicle far below the fair market price, you may be able to claim damages against the lender and dispute any deficiency judgments you would be responsible for the remaining balance of the loan.

If you are behind in your vehicle payments and worried your car would be repossessed, contact an Elk Grove bankruptcy attorney to stop any repossessions or other legal actions taken against you.

When you file chapter 13 bankruptcy, you have the opportunity to keep your assets during a “reorganization” where you offer a fair payment to creditors in return for maintaining your property. Chapter 7 is a little different; while you may keep your assets if you have if they are low enough value to fit into the legal exemption laws provided for chapter 7 bankruptcy, the trustee may sell high-value assets that don’t fit within the exemptions to satisfy your creditors.

Exemptions

No matter what type of bankruptcy you file, bankruptcy law allows for exemptions (property that is protected from seizure). States differ in what the exemptions are, and if your state allows it, you may be able to claim the federal exemptions if they are more favorable to your situation.

Exempt does not mean you no longer have to pay for the asset. You will need to continue to make any mortgage or car loan payments if you wish to keep the collateral. The exemption rule applies to your ability to preserve a certain value of assets from liquidation by the trustee.

Fresh Start

Bankruptcy was not intended to leave you homeless and broke. The law allows you to keep your possessions if they of reasonable value so you will not have to start over from scratch. Once your debt is eliminated, you will have more of your income to pay your living expenses and not be burdened by overwhelming debt.

If you have questions about exemptions and your assets in bankruptcy, contact a Folsom bankruptcy attorney to find out how you can get a fresh start.

If you fall behind on your car payments, and you believe your vehicle is about to be repossessed, one of the first things you should do is remove any personal items out of your car. Sometimes personal belongings can vanish from your car at the impound lot. If you leave necessary items in your vehicle such as a spare tire, or children’s car seats, it is a good idea to take pictures of them just in case they are not there when you go to retrieve either the car or your items.

A creditor does not have the right to keep your personal items when the car is repossessed. It is against the law for them to refuse to give you back your property after you have asked for it. As soon as you can, the quicker, the better, send a letter listing the property that you are demanding that they return.

Wrongful Repossessions

Sometimes, a creditor has no legal right to take the car, or they do not follow correct procedures when seizing your car. If this has occurred, you have the right to get your car back and be paid monetary damages.

Negotiate With the Creditor

If your car has a minimum resale value, the creditor might work with you so you can get the car back after repossession. The creditor may agree to the original payment plan, or allow for a different one to better fit your needs.

Redeeming a Vehicle

After your vehicle is repossessed, you can redeem the car by paying off the whole debt in one lump sum. Getting a breakdown from the lender on how much you owe should include a refund for unearned interest and insurance charges you are owed since the debt has been paid off early.

Reinstate the Contract

Some states allow you to recover the repossessed car and pay only the back due payments and not the total loan on the car. You may have to make one or two payments in advance and cover the cost of the tow and storage.

Bankruptcy Can Get Your Car Back

If you have other financial problems as well as losing your car to repossession, it may be a good financial choice for you to file for bankruptcy. If the lender has not sold the car when you file, the lender should voluntarily return the car due to you because of your legal right to the automatic stay. The automatic stay stops all legal action against you while you work out your bankruptcy plan.

When you get your car back, you will have to continue to make the payments if you wish to keep the car. Since you will have qualifying debts eliminated in bankruptcy, you should be in a better position to make the payments.

For more information on bankruptcy, contact an Elk Grove bankruptcy attorney.

In Chapter 7 bankruptcy, the nonexempt assets are sold, and the proceeds go to pay your creditors. Both federal and state laws allow the court to void an asset sale that was made just prior to filing for bankruptcy. If the court determines that the assets were sold or transferred to avoid having them be included in the liquidation process, you may be held liable.

When you file for bankruptcy, the court-appointed trustee will ask the debtor if they have traded, sold or transferred property within the last two years. Some states can go back as far as six years. The trustee is looking for fraud concerning your bankruptcy.

Types of Fraud

Actual fraud; where the debtor intended to delay, hinder or defraud a creditor.
Constructive fraud; when the debtor received less than fair market value during the time the debtor was insolvent.

Exempt Property

Talking to your Citrus Heights bankruptcy attorney can help you evaluate whether you are at risk of penalties involved in what the court considers an improper sale of your assets. Much of your assets may be exempt and will not be included in the bankruptcy process. To be safe, don’t make any transfers shortly before filing.

Don’t Leave Anything Out

Be honest with your attorney and explain any past and recent sales or transfers. Looking at your case, filing a Chapter 13 bankruptcy instead of Chapter 7 may be in your best interest if you have such transfers to declare. The trustee does not liquidate your assets in a Chapter 13 bankruptcy, but instead, you must follow a court-approved repayment plan on your past due debt. When you have finished making your payments, some remaining past due debts can be eliminated.

The issue can become complicated, especially if you sold items to be able to make other more relevant payments. A Citrus Heights bankruptcy attorney will have the experience you need to help minimize any problems that may arise during your bankruptcy.

Many people worry they will lose all their belongings if they file bankruptcy, or that they must be flat broke to file. When actually, bankruptcy can be a way for you to protect the assets you have. Bankruptcy exemptions determine what property you get to keep, and your assets won’t be taken away without your consent.

Bankruptcy does not automatically give all your belongings to the creditors. Many state and federal laws protect your rights and include many exemptions such as your house, cars and personal belongings that you need to continue with a normal life after bankruptcy proceedings.

State or Federal Exemptions

Exemption amounts differ from state to state; also federal exemptions may be available in your state. If your state allows it, you may be able to choose the state exemptions or the federal exemptions. Each set of exemptions offers different advantages to work best for the property you want to keep. You must choose one or the other, and you will not be allowed to select different factors from each system.

If the property you want to keep is equal to or less than the exemption amount allowed in your state, you may keep your belongings. In Chapter 7 bankruptcy if your vehicle is worth more than the allowable exemption, the bankruptcy trustee can sell your car, pay off the loan and any creditors and pay you whatever the exemption rate is.

Homestead Exemptions

If your home is worth more than you owe on it, then that amount is considered equity. In a Chapter 7 bankruptcy, the trustee may be able to sell your house and use the proceeds to pay the creditors. The homestead exemption allows you to keep a certain amount of the equity and protect it from the trustee. In a Chapter 13 bankruptcy, you may keep your home and work out a plan to make past mortgage payments.

Laws to Protect You

There are laws in place to protect you during the bankruptcy process. It is essential to speak to a qualified Sacramento bankruptcy attorney to find out which of your assets are exempt and non-exempt so you can keep the assets that are the most important to you.

Rental Property in Chapter 7 Bankruptcy

When you file for chapter 7 bankruptcy protection and own rental property, the bankruptcy trustee will take over any property you own that isn’t exempted. Exemption amounts differ between each state and whether you are able to choose federal exemptions instead. In most cases of California bankruptcies, real estate you own that isn’t your permanent residence is more difficult to exempt and that might lead to it being sold to pay back your creditors. If you have little equity, however, you may be able to protect your rental property in chapter 7 bankruptcy by using a wildcard exemption which can be used to protect assets up to a certain dollar amount. Due to the fact that there are several exemption options in most cases, ask your bankruptcy attorney which set of exemptions would be best to use in order to protect your rental property in chapter 7 bankruptcy.

Rental Property in Chapter 13 Bankruptcy

When filing for Chapter 13 bankruptcy protection, the trustee usually won’t sell your nonexempt property, but the amount of equity you have in each property will factor into the total amount you must pay back through your Chapter 13 repayment plan. If you own rental property, there are a few benefits to filing chapter 13 bankruptcy versus chapter 7 which include getting to keep your property, in addition to, being able to add any missed payments into the repayment plan and pay them back over the course of your three to five year repayment period. Additionally, if you owe more than the rental property is worth, you may be able to decrease the overall repayment amount through a bankruptcy process called a “cram down”.

Bankruptcy is often a complex process and one that you certainly shouldn’t try to navigate on your own. If you own rental property that you want to retain during the course of filing for bankruptcy protection, contact an experienced bankruptcy attorney in Antelope to discuss your situation. A bankruptcy lawyer’s assistance and knowledge are invaluable and could represent the difference in being able to preserve your rental property and other assets.

Wage Garnishments for Back Taxes, Child support, and Alimony

Typically, a creditor needs a court order to obtain a wage garnishment, but there are a few exceptions. Theses exceptions include child support, alimony, back taxes owed to the IRS, and federal student loans. All child support orders include an automotive wage withholding order. Alimony, if included in the same family support order, will be deducted as well. But if the alimony order is separate, the alimony order usually won’t include the automatic wage withholding. With regard to student loans, the U.S. Department of Education can garnish up to 15% of your wages without a court order if you default on a payment. Additionally, the IRS has the power to garnish a large majority of your wages in order to pay back taxes. The total amount the IRS can garnish from your wages depends on how many dependents you have and your standard deduction amount.

Avoiding Wage Garnishments

Avoiding wage garnishments begins with working to stay current on all your payments, and when unable to do so, staying in contact with your creditors. The process of obtaining a wage garnishment involves a considerable amount of time, effort, and court appearances, so most creditors won’t want to go through the process if they can work a payment schedule out with you directly. Because the judgment creditor must file papers in order to obtain a wage garnishment, you will also be delivered written notice and have the right to a hearing before the garnishment begins. One way to avoid wage garnishments is to file a written objection to the wage garnishment. In most circumstances, the notice papers will include instructions on how to object, but if they don’t you can contact a local bankruptcy lawyer or the clerk of the court to get this information.

The amount that any creditor can garnish from your paycheck depends on the type of debt, as well as, the state laws in which you live. If your wages are currently being garnished, filing bankruptcy can help and it would be highly advisable to contact your Citrus Heights bankruptcy attorney in order to find out your options.

Getting Repo’d Car Back

Once you have filed for your chapter 13 bankruptcy, the US Bankruptcy court issues an ‘automatic stay’ order. This stay order prohibits all your creditors from further pursuing any collection activities against you. Also, your car lender loses their right to repossess your vehicle or sell it. This is if they have already repossessed it before the petition was filed. Typically, once you have filed your chapter 13, you lender will be obligated to return your car to you.

However, it is important for you to ensure a timely filing of the chapter 13 to retain your car. For instance, if your lender has already sold off your car, filing a petition later will not bring it back. In most states, the lender is obligated to hold a repossessed vehicle for at least 10 to 15 days before selling it. It is a good idea to file your chapter 13 within this period. Filing chapter 13 will prohibit the lender from selling your car. It also gives you to chance to reinstate your loan and get your repo’d car back.

Typically, when lenders are notified of chapter 13, they willingly return the vehicle to the debtor. However, in case your lender is reluctant to cooperate, your Sacramento bankruptcy attorney will file a Motion for Turnover, that will issue a court order for your lender to return the car to you.

When you’re behind on your utility bills, it can be a severely stressful situation. Odds are, that if your utilities are being shut off, this is just the tip of the financial issue iceberg for you. On a positive note, by filing bankruptcy, you can be protected from utility shut-off, including your gas, water, electricity, and telephone.

Afforded to consumers by the “automatic stay”, once you filed bankruptcy, the utility services company can’t refuse or disconnect your services, much in the same way that creditors must stop all collection attempts. This reprieve, however, is only temporary and you must show a good faith effort to pay what you owe and provide “adequate assurance” of payment within 20 days after filing for bankruptcy. Proof of “adequate assurance” is a monetary deposit, account co-signer, or other form of assurance that utilities company agrees upon.

Before resorting to this, you can contact the Utility Company directly to see if alternate payment plans can be arranged. For example, some utilities offer customers the ability to push back a pay date by a week or two. Other times, you can allow a month or maybe even two to go by before you actual face a shut-off. If you have already received a notice that your services will be shut off, time is of the essence. If you consult a Sacramento bankruptcy attorney and discover that bankruptcy is your best option, then an emergency bankruptcy may be needed to ensure that you don’t lose any services. This is a method of bankruptcy that allows your utilities to stay on, while you gather the necessary information needed in a bankruptcy filing.

Don’t delay in taking an account of your financial situation if you are facing a utility shut-off, home foreclosure, or vehicle repossession. Ignoring the issue will not help at all. Contact a local bankruptcy attorney to ensure you are making and educated decision about how to obtain debt relief.

For questions about bankruptcy property sales and the advantages compared to a short sale, contact me, a Sacramento attorney, for a free initial phone consultation today. When we meet, I will thoroughly explain your options and the implications of each.

Folsom Attorney, Advising on Asset Sales in Bankruptcy

Section 363 of the Bankruptcy Code, accessible through filing for Chapter 11 or Chapter 12 bankruptcy, allows the debtor to make sales, uses and leases of property using auctions, financial advisers, investments, transfers of contracts and other business transactions that are part of normal business operations.

Any sales, uses or leases of property outside the ordinary course of business require that the debtor obtain court approval and give notice to all creditors and interested parties. Property can be sold free and clear of liens and with minimization of successor liability under Section 363 — thereby increasing the value added to investors and improving chances for a profitable sale.

If filing for bankruptcy does not serve your financial goals, I can also assist with other options available for selling property to relieve debt, including short sales and trustee sales.

For Questions About Bankruptcy Purchases, Contact a Citrus Heights Lawyer

At the Liviakis Law Firm, we represent clients in communities throughout Sacramento County, El Dorado County and Placer County, California. Our conveniently located offices in Rancho Cordova and Sacramento are open 9 a.m. to 5 p.m. Monday through Friday. Free parking is available.

For a free initial consultation about property sales in bankruptcy with an experienced bankruptcy lawyer, contact an office near you. Your choice of legal representation can have a significant impact on the success of your bankruptcy filing.

So, as home values continue to rise, it is important that the available exemptions rise with them. Otherwise, more and more people will be likely to lose their homes. Past legislative increases have fallen dramatically behind the increased housing costs in California. There may be good news on the horizon. As soon as today, May 22, 2015, a bill aiming to increase the homestead exemption will be up for a vote on the California Senate floor.

Existing law provides that a specific portion of equity in a homestead, as defined, is exempt from execution to satisfy a judgment debt and prescribed that the amount of the homestead exemption is either $75,000, $100,000, or $175,000, depending on certain characteristics of the homesteads residents. The bill, SB 308, would instead provide that the homestead exemption be increased to $300,000 across the board. This would ensure that hard-working consumers in the Sacramento area would be more likely to save their house when filing for bankruptcy protection. The whole purpose of having a homestead exemption is to provide protection from creditors for a typical home in California. The current numbers are simply inadequate to achieve that goal.

The bill would not just provide relief in the form of an increased homestead exemption. It would also create a new, modest exemption intended to help small business owners get their fresh start. To be specific, it would allow small business owners to claim up to a total of $5,000 for cash or deposit accounts, accounts receivable, and business inventory for those debtors using exemptions under CCP 704. The bill would also make an increase to the automobile exemption, increasing it to $6000.

Consumers can help make these proposals become a reality by contacting their state legislators to encourage them to support this bill. Find your California State Senator at http://findyourrep.legislature.ca.gov.

As a final note, understanding what is exempt from creditors, how the exemptions are calculated, and what law applies in any individual bankruptcy case can be very complicated. Thus, these determinations are best left up to an experienced bankruptcy attorney. If the proper exemptions are not claimed, a consumer debtor may lose her property. Timing is also very important because the law changes from time to time and whether the debtor moved from another state lately makes a difference. See a local, reputable bankruptcy attorney to determine the best exemptions for the particular situation.

Many homeowners who have had a foreclosure started against them do not know that they may have options. Once the proceedings have begun, it is not too late for the homeowner to do something to stop the foreclosure.

• Some of the options for homeowners include:
• Loan modification
• Allowing the foreclosure to occur
• Declaring Chapter 7 bankruptcy
• Declaring Chapter 13 bankruptcy
• Short sale

When a homeowner files for Chapter 13 bankruptcy, it can allow them time to restructure their loans. It also can allow the homeowner to wipe out a second mortgage completely. It also allows the homeowner to eliminate unsecured debt.

Filing for Chapter 13 allows for the individual to create a repayment plan. The plan allows for the bankruptcy filer to pay under the new repayment plan, over either a three or five year period. This repayment plan can also allow for reduced interest rates and eliminate penalties and fees.

The advantage of filing for Chapter 13 over Chapter 7 is that since it is a repayment plan instead of discharge of debt, more types of debt can be included. Student loan debt is not dischargeable under Chapter 7 but can be a part of the repayment plan in Chapter 13.

Source: Examiner, “Options for homeowners in foreclosure,” Oct. 29, 2012