May I Repay Some Of My Creditors And Not Others Under Chapter 13
You cannot selectively pick and choose some particular creditors and decide to pay them on the side. All of your debts must be dealt with through the Court. Any payments which you make to a creditor must be paid under the authority of the Court, by the terms of the law, and not by any personal desires. If you want to pay creditors, you must do so through your Chapter 13 plan.
What Can I Do If My Creditor Keeps Calling Me
Unless an exception has been made, your creditor cannot contact you after the automatic stay is put into place. If they do, you should immediately:
- Notify the creditor of your bankruptcy status
- Notify your attorney of the creditors action
- Notify the bankruptcy court of their contact
In some casesparticularly after repeated contactyour lawyer may help you file a lawsuit against the creditor. Your lawyer will inform you if this is an option in your case.
When Does A Debtor Have To Appear In Court In A Chapter 13 Case
Most debtors have to appear in court at least twice: once for a hearing called the meeting of creditors, and once for a hearing on the confirmation of the debtors Chapter 13 plan. The meeting of creditors is usually held about a month after the case is filed. The confirmation hearing is generally held within 75 days thereafter.
The debtors testimony is not lengthy at either hearing, however. If difficulties or unusual events arise during the course of a case, additional court appearances may be necessary.
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Filing Bankruptcy Chapter 13 In California
At Wadhwani & Shanfeld, we individualize our approach for each individual. As our client, our goal first and foremost is to find a tailored solution just for you. We are hands-on Southern California Chapter 13 bankruptcy lawyers who work closely with every client to make sure they receive excellent service and make informed decisions. Get over 65 years’ bankruptcy experience and extensive knowledge about bankruptcy filing. If you did not qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy, also known as reorganization bankruptcy, may be an alternative option.
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Debt Relief & Reorganization
Filing Chapter 13 bankruptcy allows you to keep your assets as long as you can afford them. Instead of selling off your property to pay back your debt, Chapter 13 requires you to follow a repayment plan approved by a bankruptcy court.
Many repayment plans let you pay back significantly less than what you owe. You will have to pay certain debts, like child support, in full. Repayment plans typically last three to five years. When the plan ends, the rest of your debt is canceled.
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Bankruptcy Debt Repayment And Discharge
When a company is being liquidated in a chapter 7 bankruptcy, there is an order of priority in which debts are paid off. The assets are liquidated and the funds are used to repay the debt according to that priority. If there are assets remaining once debts are repaid, they can be distributed to shareholders, but if debts are greater than available assets, shareholders may get nothing at all.
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Chapter 13 Bankruptcy Law Firm Helping Clients In Massachusetts & The Surrounding Areas
When you have an overwhelming amount of debt, you deserve to know that options are available for you to recover financially. If you dont qualify for Chapter 7 bankruptcy, you might be able to resolve your debts using Chapter 13 bankruptcy. However, this process can be complicated and requires the help of an experienced Massachusetts Chapter 13 bankruptcy lawyer.
At Miller Law Group, P.C., we help clients protect their future by helping them through every step of the Chapter 13 bankruptcy process. Our firm understands how uncertain and stressful this time is, and were ready to give you the peace of mind that you need during the entire bankruptcy process. We always give each client the attention they deserve. Each week, our team meets to discuss their cases to make sure theyre approaching them from every angle.
The Automatic Stay In Chapter 13
Filing a Chapter 13 petition automatically “stays” most collection actions against you and your property, including foreclosure proceedings.
During bankruptcy, the automatic stay prevents collections agencies and debt collectors from:
- Starting or continuing lawsuits
- Taking money from your paycheck
- Harassing you
Sometimes this only stops them for a short time, and it doesn’t stop all actions collection agencies can take.
At the start of the filing, you must provide a list of your creditors. Your trustee or the bankruptcy clerk will notify them of the bankruptcy â so make sure you include all of them on the list.
Protecting Co-Debtors With an Automatic Stay
The automatic stay in Chapter 13 also protects co-debtors or “co-signers.” This protection extends to any co-debtors who signed loan or credit card agreements with you.
The Chapter 7 Trustee
The Chapter 7 bankruptcy trustee assigned to the case is in charge of making sure the creditors get what theyâre due under the bankruptcy laws. They donât represent the filer or any specific creditor. But, just like the filer and the creditors, they want to make sure the case proceeds as smoothly as possible.
The trusteeâs duties include reviewing the filerâs tax returns and recent pay stubs and determining whether any property can be sold for the benefit of creditors. To ensure the fair treatment of all unsecured creditors, bankruptcy trustees have wide-ranging powers that include the ability to undo payments to creditors and property transfers where the filer received less than fair market value for the property. So, if someone transfers a piece of property to someone else so it doesnât come into the bankruptcy estate, the trustee can and will undo that transfer and sell the property.
The Trusteeâs Role In A No-asset Case
Once a trustee fulfills their duties and after determining that there are no assets that can be sold for the benefit of creditors, the trustee notifies the bankruptcy court and asks to be relieved from the case. This can happen as soon as the meeting of creditors has been completed. Once a trustee files the no-asset report, the case is essentially on auto-pilot until the discharge is entered. Chapter 7 cases where a report of no distribution has been filed are closed by the court once the discharge has been entered.
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What If The Debtor Later Decides To Discontinue The Chapter 13 Case
A debtor has the right to either dismiss a Chapter 13 case or convert it to a Chapter 7 case at any time, regardless of his reason for doing so. However, if a debtor simply stops making the required Chapter 13 payments, the court has the power to compel the debtor, or his employer, to make the payments and to comply with the orders of the court.
When Will I Have To Appear In Court In A Chapter 13 Case
In the United States Bankruptcy Court for the District of New Jersey, you will have to appear for at least one court hearing generally known as the First Meeting of Creditors. This meeting is conducted by the Chapter 13 Trustee. The bankruptcy judge will not be attending this meeting. This meeting will be held within 30 to 60 days after your case is filed. You will be notified of the time, date and place of this hearing by your attorney and by the Trustee. This is a mandatory court appearance on your part. Your failure to appear at this meeting will result in the dismissal of your Chapter 13 case.
Confirmation hearings are handled by your attorney and the Chapter 13 Trustee.
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- Certain tax debts
- Divorce property settlements
In limited cases, student loan debt may be eligible for discharge in bankruptcy, but you must be able to prove that repaying it would cause an undue hardship on you.
Debts that generally cannot be discharged through bankruptcy include:
- Child support or alimony payments
- Recent tax debts
- Debts stemming from lawsuits or criminal penalties for cases involving drunk driving, fraud, or willful or malicious behavior
- Debts you did not include in your repayment plan
What Happens When All Payments Have Been Completed
Once enough money has been paid to the Trustee to complete all of your required payments, the Trustee will begin the process of closing your case. The closing process normally takes 6 to 8 weeks and is completed in the following order:
Court Audit. The Trustees office verifies that all claims filed in your case were paid correctly and all court orders were property administered. If any problem is discovered, you and your attorney are notified. Stop Payment. The Trustees office directs you or your employer to stop making plan payments. This will not be done until after the court audit is completed successfully. Final Report. The Trustees office prepares a final report for the judge. Court Date. The Trustee schedules your case for final review by the judge. You do not have to appear for this final hearing. Case Discharged. The judge signs an order discharging you from your scheduled debts. Notice of Discharge. The Trustee sends a notice to you, to your attorney and to your creditors. This tells you when your case was discharged by the judge. Refund. After the judge discharges your case, you receive a refund from the Trustee if there is money remaining in your case.
How Does Bankruptcy Work
Bankruptcy is a method to eliminate or at least reduce your debt when bills pile up beyond your ability to repay them. It should be viewed as a last resort to be considered only when all other potential courses of action to get back on track have been exhausted.
Individuals filing for bankruptcy mostly use either Chapter 7 or Chapter 13. The biggest difference between the two is what happens to your property:
- Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don’t own a home and have a limited income.
- Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property if you successfully complete a court-mandated repayment plan that lasts between three and five years.
Depending on where you live and your marital status, some of your property may be exempt from being sold when you file Chapter 7 because of state-specific and federal exemptions. With exemptions, whether they be your home equity, retirement accounts or even personal possessions such as jewelry, you receive the allowed exemption amounts, and the rest of the proceeds will be used to pay off debts. You can read more about potential exemptions, and check out this chart for a quick rundown on the two types:
- Child support or alimony
- Student loans
Getting A Lawyer To Help You With Your Bankruptcy
Bankruptcy is a specialized area of law that is very complex. And the issues are not always apparent or simple. The bankruptcy laws changed in October 2005 to discourage many people from filing for bankruptcy. So the law became more complicated. And there are more situations where a mistake can result in your case getting dismissed. If your case is dismissed, the bankruptcy court often imposes a penalty of 180 days before you can refile, and in this time period a lot can happen. This is why it is so important to have a lawyer advise you and help you with your bankruptcy.
Find a lawyer who can help you work through the issues, alternatives you may have, and consequences of your choices.
- Pick a lawyer with whom you are comfortable, one who will allow you to ask questions and give you responses that you can understand.
- Pick a lawyer who either specializes in bankruptcy or does a large part of his or her practice in the field.
- Ask questions until you understand what your choices are.
- Don’t be afraid to interview a lawyer and leave without hiring him or her.
If you decide to represent yourself in bankruptcy court, read a guide for Filing for Bankruptcy Without an Attorney.
To find a good bankruptcy lawyer:
- Check state bar groups and specialization/certification programs for bankruptcy lawyers in your community.
- Ask other lawyers or tax preparers you know for recommendations.
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Houses Cars And Property Encumbered By A Secured Loan
If you own a house, car, or expensive household furnishings, chances are you had to take out a loan to purchase them. Your lender typically has a security interest in the property . This security interest is not affected by bankruptcy in most cases. Since bankruptcy does not erase security interests, the bankruptcy trustee is only concerned with how much equity you have in the property.
Each state allows you to exempt a certain amount of equity in your personal property and your house. So whether a trustee will sell your property depends on the amount of equity you have in the property and your states exemption laws. If you have no equity in your house or personal property, you dont have to worry about the trustee taking them. However, if you wish to keep them, you must continue making regular payments to your lender. Your lender may also require you to reaffirm your debt to keep the property after bankruptcy.
How Do I Inform The Credit Agencies Of My Chapter 13 Completion
You and your attorney will both receive copies of the discharge order. Approximately four to six weeks after the judge has discharged your case, your discharge papers will also be available at the courthouse. This legal document states that you have been discharged from your scheduled debts. The Trustee will not have copies of your discharge papers. The courthouse is located at:
Mitchell H. Cohen Federal Courthouse 401 Market Street Camden, NJ 08101
If you subsequently lose or misplace your discharge order, you may obtain a copy by contacting Mr. Perlmans office at 429-2449.
Make several copies of your discharge papers, and send copies to the three major credit bureaus:
Experian, NCACEquifax Credit Information Services, Inc.
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How Does Chapter 13 Bankruptcy Stop Foreclosure
When you file for Chapter 13 bankruptcy, all creditors must stop their collection efforts due to an order called the automatic stay. The creditors in charge of your home cannot conduct a foreclosure sale during an automatic stay. As soon as you file for bankruptcy, foreclosure proceedings must stop. Additionally, Chapter 13 bankruptcy allows you to catch up on missed mortgage payments as part of your repayment plan.
Please note that you must make all the mortgage payments that come due during your Chapter 13 plan on time even though you are using your repayment plan to pay off delinquent mortgage payments from before bankruptcy. Still, Chapter 13 bankruptcy allows you to reorganize your debt, so in some cases your mortgage payments may be lower than they were before you chose to file. In addition, Wadhwani & Shanfeld may be able to assist with mortgage modification options while you are under Chapter 13 protection.
Dismissing A Bankruptcy Case: Can It Be Done
In life, we tend to change our minds about a lot of things. Thats true also in the law many times people file lawsuits and then later decide they dont want to continue pursuing the lawsuit. But can you do that with a bankruptcy? If something changes, or you change your mind can you just dismiss your bankruptcy?
Why Dismissing Isnt So Easy
Unlike many kinds of lawsuits that do allow you to just dismiss your case or lawsuit whenever you want, doing that is not so easy when you file for bankruptcy.
The problem with dismissing a bankruptcy is that courts are concerned that the bankruptcy system could be easily abused if that were to happen.
For example, a debtor could file a bankruptcy, and accidentally show creditors that the debtor has assets, and then just dismiss the case, keeping the creditors from getting to those assets. A debtor could file a case, realize that an asset was going to be taken, dismiss the case, and then get rid of that asset.
In some cases, a debtor tries to conceal an asset from the bankruptcy courtbut then fails, when the asset is discovered. Intentional concealment of property from a bankruptcy court is a crime. The law doesnt allow someone to evade a potential crime simply by dismissing a bankruptcy case.
Even if you are allowed to dismiss your caseand you are, sometimes allowed to do sowhen you refile, you often will not get the benefit of the automatic stay, a huge reason why many people file for bankruptcy.
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Eligibility For Chapter 13
Chapter 13 bankruptcy has its own set of rules and eligibility requirements. Business entities cannot file for Chapter 13 bankruptcy, although Chapter 11 bankruptcy may provide similar relief for a business. Only individuals or married couples can apply.
To qualify for a Chapter 13 bankruptcy, you must show that you are eligible for this form of relief. You must establish that:
- You did not have a prior bankruptcy application dismissed within the previous 180 days
- You have completed the Credit Counseling Requirement
- You filed your tax returns for the past four years
- The proposed plan repays all required debts
- The proposed plan will repay specific amounts to unsecured creditors
- You have enough income to cover mandatory payments to priority and unsecured creditors