Many people think that living in Watsonville is like living in paradise. The climate is nice and the people are diverse. But living in paradise is not cheap. Largely due to the high cost of living in California, roughly a third of Watsonville families do not have the cash to cover a $400 emergency expense. So, one financial storm, like a divorce or job loss, is enough to sink most families under the waves.
At Miranda, Madgen & Miranda, our Watsonville bankruptcy attorneys offer practical debt relief solutions in situations like these. Bankruptcy’s Automatic Stay prevents adverse creditor action, such as repossession and foreclosure. Additionally, bankruptcy protects most or all of a family’s assets from these creditors. But we do more than just file paperwork. We also offer solid legal advice to help you get back on your feet.
Chapter 7 Bankruptcy in California
Many families struggle with unsecured debt, such as credit cards, payday loans, and medical bills. Most moneylenders are impatient with regard to unpaid accounts. Since the Supreme Court has stripped away some important consumer protections in the Fair Debt Collection Practices Act, these creditors are now more assertive and relentless than ever before.
Chapter 7 eliminates most unsecured debts, like the ones listed above. In many cases, Chapter 7 erases government-backed unsecured debt, as well, like student loans and past-due income taxes. The aforementioned Automatic Stay applies whether or not the debt is dischargeable. That includes things like wage garnishment for alimony payments.
Most people qualify for Chapter 7 debt relief. Generally, their income must be lower than the average California income for households of that size. As of May 2019, that level was $97,000 for a family of four.
Chapter 13 Bankruptcy in Santa Cruz County
Other families fall behind on secured debt payments, such as mortgage installments and auto loan payments. Chapter 13 bankruptcy gives families up to five years to catch up on these obligations. And, since the Automatic Stay usually stays in effect the whole time, creditors cannot take adverse action or even challenge the repayment plan, in most cases.
That repayment plan primarily consists of a monthly debt consolidation payment. Working together with a Watsonville bankruptcy attorney and the bankruptcy trustee (person who oversees the case for the judge), the debtor makes one monthly payment based on the amount of the family’s disposable income. Then, the trustee distributes that money among secured and unsecured creditors.
At the end of the repayment period, the debtor has a zero past due balance on all secured accounts. And, if any unsecured debt remains, the judge discharges it. These two things combine to give the family a fresh financial start, which is what the Bankruptcy Code guarantees.
Connect with a Dedicated Lawyer
Bankruptcy offers immediate and long-term debt relief for financially stressed families. For a confidential consultation with an experienced Watsonville bankruptcy attorney, contact Miranda, Magden & Miranda LLP. We routinely handle matters in Santa Cruz County and nearby jurisdictions.