Due to pay cuts, I have been unable to keep up with my credit card debts. I am now receiving calls and mail from attorney's offices and collections demanding payment. I have started thinking about a Chapter 13 bankruptcy. I owe about $30,000. I own my home (have a mortgage), have 3 cars, 1 of which is reliable, and a motorcycle. I live in California. I've read various things about Chapter 13. One website says that sometimes you can pay as little as ten cents on the dollar, and up to fifty cents on the dollar through Chapter 13. I've also read that my home and assets are safe, but that the value of my assets might be what I'd have to pay my creditors.

I know that I will need to contact an attorney, but any preliminary information would be greatly appreciated! Thank you!

A professional financial advisor, of your choice, draws up a list of your creditors and offers them payment, so many cents on the dollar, to see what they will be happy with. In Ontario, this type of transaction has to be approved by the Provincial Court. Then, when all the information is in, totalled up, you are left with finding the money to satisfy your creditors, albeit only what can be allowed. Then the fun starts.

Tick

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Originally Posted by tickle

A professional financial advisor, of your choice, draws up a list of your creditors and offers them payment, so many cents on the dollar, to see what they will be happy with. In Ontario, this type of transaction has to be approved by the Provincial Court. Then, when all the information is in, totalled up, you are left with finding the money to satisfy your creditors, albeit only what can be allowed. Then the fun starts.

tick

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The OP is in California so this advice is not correct. I find this every bit annoying as people whose answers are off track.

Here is the info on Chapter 13:

"Chapter 13 bankruptcy isn't for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you'll have to prove to the court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13.

If your total debt burden is too high, you are also ineligible. Your secured debts cannot exceed $1,010,650, and your unsecured debts cannot be more than $336,900. A "secured debt" is one that gives a creditor the right to take a specific item of property (such as your house or car) if you don't pay the debt. An "unsecured debt" (such as a credit card or medical bill) doesn't give the creditor this right."

For more info and to re-read this: An Overview of Chapter 13 Bankruptcy

Thank you, JudyKayTee. I saw that the first response was from Canada, so I didn't take a lot of stock in it, at least for it's applicability here in Ca. I'll check out the link you posted and see if it answers my questions. If not, I'll be back for further clarification.

Also, to add another question, should I try a credit counselor first? My wife's not real keen on the bankruptcy thing, but I keep telling her that it's really called "bankruptcy protection". I'm really in a quandary, but need to make a move real soon. Thanks to anyone who can offer further insight!