Articles from St. Petersburg Bankruptcy Law Blog

Unlike Chapter 7, which is a liquidation bankruptcy, Chapter 13 requires debtors to create a reorganization plan lasting three to five years. Under the reorganization plan, the debtor makes monthly payments on various debts, some of which must be paid off in full in order for the plan to succeed and the bankruptcy to be discharged. While every debtor’s reorganization plan will ultimately be unique, there are a few basic principles that generally apply in California Chapter 13 cases.

Each California bankruptcy case formally begins with a document known as the “voluntary bankruptcy petition,” regardless of whether the debtor is filing under Chapter 13 (wage earner’s plan, reorganization) or Chapter 7 (straight bankruptcy, liquidation). However, while the bankruptcy petition gets the process started, the debtor will also need some additional forms in order to successfully complete the case and obtain a discharge.

In February, the FBI reported pastor Karl Robinson was sentenced to four years in federal prison for his role in a mortgage rescue scam that falsely promised California homeowners they could stop foreclosure and stay in their houses by paying fees for “experienced consultants.” Unfortunately for the victims of Robinson’s scam, his financial promises were too good to be true, and their money was wasted on useless, fraudulent services. However, there is a way to stop foreclosure that doesn’t involve empty promises or criminal activity: filing for Chapter 13 bankruptcy in California.

Last month, Medill Reports Chicago covered a surprising source of bankruptcies in Illinois: expensive parking tickets. The report is a good reminder that while medical debt, credit card debt, and mortgage debt are common, the financial factors that can lead to bankruptcy are sometimes less obvious. Our Roseville bankruptcy lawyers explore some lesser-known sources of debt and spending in California.