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California Bankruptcy

The end result of a Chapter 13 bankruptcy is a court approved payment plan based on your ability to make payments over an extended period of time. This benchmark is usually set at 25% of balances due which usually means that balances will be steeply discounted or discharged completely by the court. The monthly amount payable as set in the plan is based on disposable income remaining after a list of court approved expenses.

One aspect of the Chapter 13 bankruptcy code which can save a filer tens of thousands of dollars is the ability to have unsecured loans against the property stripped off by the bankruptcy court. Known as lien stripping, the bankruptcy court can re-characterize subordinated loans which were once secured by the value of the property to unsecured status if the value of the property has dropped below what is owed on the first mortgage. Once re-characterized as wholly unsecured, the subordinated loans are then treated in much the same fashion as other unsecured debt like credit cards.

Another benefit provided by the Chapter 13 bankruptcy code is known as an auto “cram down”. This benefit comes into play with an auto which has been bought at least 910 days prior to the bankruptcy filing and has a value lower than the balance owed on the car. In a Chapter 13, the court can reduce the balance owed to the current value of the car. The payment schedule can also be extended significantly. These two actions can reduce the monthly payment on the car by over 75%.


Because a Chapter 13 can result in the surrender of assets to satisfy creditors, the best results are always delivered from intensive planning prior to the filing. Prior to filing a Chapter 13 petition, our attorneys will consult with you regarding all aspects of the filing including your assets, income, expenses, and liabilities. Additionally, verifying and justifying asset valuations, creating a payment plan to submit to the court, and taking advantage of every opportunity provided by the bankruptcy code are essential in building a solution that works best for you.

With 11 locations in California to serve you, the Law Offices of Zhou & Chini make it very convenient for a face to face meeting with an attorney to discuss your situation. The main focus at Zhou and Chini is bankruptcy, and we file Chapter 13 bankruptcies for individuals in every county in Southern California. We always offer a free and confidential consultation with one of our attorneys to see whether filing a Chapter 13 Bankruptcy is the best action to take on your behalf or whether another option could serve you better. At Zhou & Chini, we pride ourselves on delivering customized solutions to your financial issues. All of our bankruptcies are handled by an attorney directly, not passed down to paralegals or other staff members.  Our attorneys, after an assessment of your specific circumstances, will be happy to explain all your options, so you can make an informed decision and take the best path possible toward your debt solution. To schedule a free consultation, visit




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