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Bankruptcy requires more than just signing papers and you’re headed out the door. It‘s hardly like that at all. When we present the list of documents required to our clients, I can never stress enough how important these documents are and how important it is to keep them
updated. We don’t ask for the documents to have them in our archives, these documents are extremely important in the bankruptcy process. Your documents are presented to the Chapter 7 Trustee or the Chapter 13 Trustee to show them the information we have presented is complete and accurate. When bringing in your documents, some may say it’s impossible to get a specific document, but no feat is too big if it’s important. We have seen people that needed just one paper from an old employer and although some of us may not want to go back to an old employer and/or the situation may get a bit awkward, they have been successful at retrieving the necessary documents. No one can keep you from getting your information and by law they must keep your records for a specific amount of time depending on the document. There is always something we can do to get a document and without them most of the time, the case cannot be completed. If just one paper is missing, believe me, the Chapter 7 Trustee or the Chapter 13 Trustee will ask for it at your 341 meeting (First Meeting of Creditors) and your case will not continue until you bring in those missing documents.
So once again, I’d like to say, I cannot stress enough how important these documents are and how important it is to keep them updated for the data entry part of your case and to ensure the finalization of your bankruptcy. What’s the simplest part of going through bankruptcy? Answer: the signing of your paperwork.
This may seem counter-intuitive, but owing more on your home mortgage can actually be a godsend in wither a Chapter 7 or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy, the Chapter 7 trustee is an individual appointed by the U.S. Trustee to administer your case. This is a fancy way of saying this person is in charge of selling your non-exempt assets so he or she can distribute some funds to your unsecured creditors (medical bills, credit cards, etc.). You see, immediately upon filing your petition, all your property is now property of the newly created bankruptcy estate, except of course for the property you can exempt under Georgia state law. Exempt property is a dollar amount that you can shield from the grasp of creditors. For instance, in Georgia, an individual can exempt up to $21,500 in his homestead. This means that if the trustee were to sell your home for the benefit of your unsecured creditors, you would receive $21,500, if that much equity existed in your property.
So how does owing more to your mortgage lender help you? Because liens survive bankruptcy, and the mortgage lender is deemed to have a lien equal to the amount that you owe. For example, if you own a house that is worth $200,000 but only owe $100,000 to your mortgage lender, you will have $100,000 in equity. Because the trustee of the bankruptcy estate is now the new owner of this equity, he or she may sell it to recover the $100,000 to be distributed to your creditors. In reality, out of the $100,000, you would receive $21,500, and your creditors would receive whatever is left over after costs of sale and the trustee’s administrative fees are tacked on. If you were to owe $195,000 to your mortage lender, the trustee would not be interested in selling your home since the equity and amount owed to the lender would eat into all the sales proceeds.
In a Chapter 13, you would propose a plan to pay back your creditors over a 3 to 5 year period. One caveat is that you must pay back your creditors at least as much as they would receive if you had filed a Chapter 7. Using the above example, if you were to have $100,000 in equity in you home, you would have to pay back at least $70,000 ($100,000 minus $21,500 exemption minus administrative costs) to your unsecured creditors over a 5 year period. If you did not have any equity in your home, you could get by with only paying back a fraction of that to your creditors.
Posted by Atlanta Bankruptcy Attorney Will B. Geer.
Selecting a good and competent chapter 13 California bankruptcy attorney is not always easy. You have to find someone you trust, yet that attorney must also be competent at what he or she does. One characteristic without the other will not take you very far in terms of the chapter 13 process.
California Chapter 13 Bankruptcies are more involved than chapter 7 cases oftentimes because most clients are subject to Form22C which is the Chapter 13 equivalent of the means test. Furthermore, in chapter 13 cases, the trustee scrutinizes Form 22C much more so than the chapter 7 trustee in a chapter 7 case. That’s because a chapter 13 trustee gets paid administative fees based on how much you are paying into the plan, and oftentimes, Form22C comes into play for above median debtors (for example, a household of 1 person who earns more than around $48,000 gross annually will be subject to filling out all sections of Form22C to determine a baseline of disposable income to repay unsecured creditors).
When Form B22C comes into play, calculations of disposable income must be done by an attorney who has the experience, precision, and capabilities to calculate the numbers properly while applying and understanding applicable case law within the district in which your bankruptcy is filed. However, that is just the beginning of the chapter 13 process. Getting the plan confirmed requires other steps including having the chapter 13 trustee review and confirm the plan, and overcoming any objections by creditors. Also, liens on property may need to be stripped in many cases today in which underwater homes are at issue; taxes issues may need to be resolved all before or during the confirmation process to a chapter 13 case.
So ultimately what do you look for in a chapter 13 attorney? Here is a simple checklist:
1. Ask how many chapter 13 cases the attorney has filed.
2. Ask of those cases filed, how many chapter 13 cases were actually confirmed – meaning a plan was confirmed by the chapter 13 trustee. Understand, this is not the same as asking how many cases received a chapter 13 discharge. Getting a plan confirmed generally means the attorney did his/her job at least intiially, and got the plan, that the client had asked for, approved by the bankruptcy court. However, it is then up to the client/debtor to see the plan through by making plan payments. Failure to do so will result in the chapter 13 case being dismissed by the court for failure to make plan payments and therefore a chapter 13 discharge is never entered due to the client/debtor’s inability to see the plan through. (Sadly, some attorneys have been known to mislead potential clients about how many cases they confirm vs. the ones they file – thus use your judgment and common sense in picking the attorney. Trust your gut on this and consult at least 2 different attorneys, assuming you have the time/luxury to do so).
3. Ask the attorney if he has ever had a plan confirmed over the chapter 13 trustee’s objection. Usually that means the attorney knows how to push issues and understands the laws of chapter 13. A chapter 13 trustee will object where he/she feels the debtor is not paying out enough in the chapter 13 plan’s proposed monthly plan payments. When the trustee objects, a bankruptcy judge will hear the case, assuming the debtor’s attorney fights the issue. Where the attorney overcomes an objection by the trustee, that means legal issues are addressed in court whereby the court makes a ruling that the debtor’s attorney took a proper position in crafting the chapter 13 plan, and that the chapter 13 trustee is not entitled to push for a greater distribution of disposable income.
4. Ask how much the attorney charges up front - usually when an attorney offers to take your chapter 7 case for little or no money down, that is a good sign you have a chapter 13 case that is not legally complex and devoid of any overwhelming obstacles to confirmation of the chapter 13 plan. However, even if your case is straight-forward, don’t expect a good bankruptcy attorney to take your case for free if your foreclosure is scheduled for the next day. That simply will almost never happen.
5. Ask how much the attorney charges for the total chapter 13 case. Oftentimes, unless you really know the attorney is good, those who charge significantly less than the no-look fee of $4000.00 may not be fully competent chapter 13 attorneys. Most good and capable chapter 13 attorneys will not take a chapter 13 case for less or much less than the no-look fee since there is a lot of work to do in chapter 13 cases. To be clear, I am talking about the TOTAL attorney’s fees, not the upfront fees before filing. The total fees must be clearly and fully disclosed in the bankruptcy papers so that it is very clear to all parties. If you are being billed hourly, rather than based on the no-look fee, that should also be clearly disclosed in your bankruptcy paperwork. If you don’t see it, ask your attorney to show it to you before filing.
7. Ask the attorney if you ever have to pay them attorney’s fees directly after the filing of the case. Do not EVER go to an attorney who says you must pay them attorney’s fees directly AFTER the chapter 13 bankruptcy has been filed. An attorney’s chapter 13 post-petition fees are paid through the plan, meaning the chapter 13 trustee will pay the attorney any balance of chapter 13 fee’s owed. If you have filed a chapter 13 case and are asked to pay attorney’s fees directly in addition to making plan payments, contact the United States Trustee’s Office and let them know immediately.
A Guide to the Distressed Florida Homeowner Facing ForeclosurePrincipal Residence – The following applies generally to principal residences in chapter 13 bankruptcy. The rules as to modification of mortgages on non-principal residences in chapter 13 bankruptcy may actually be more liberal. Changes allowing the more liberal modification of principal residence mortgages in chapter 13 are now before Congress and may soon be enacted. Other more liberal rules for modification may also apply to those qualifying as “family farmers” under chapter 12 bankruptcy. Automatic Stay – With certain exceptions, the filing of a chapter 13 bankruptcy stays or stops most creditor collection actions, including mortgage foreclosure. The automatic stay provides a homeowner a “breathing spell” in order to allow him or her an opportunity to reorganize their debt while under the protection of the U.S. Bankruptcy Court.
Timing – Generally, a chapter 13 bankruptcy must be filed before a foreclosure sale if a person desires to attempt to save their home under a chapter 13 bankruptcy plan. A foreclosure sale is normally set by the Florida Circuit Court a number of weeks after the entry of the final judgment of foreclosure.
Chapter 13 Bankruptcy Prior to the Present Real Estate Crisis - Chapter 13 bankruptcy plans typically provided to reinstate first and second mortgages on a principal residence over a five year plan while at the same time paying the ongoing regular monthly mortgage payments. Mortgages secured only by a principal residence are generally not “modifiable” under present chapter 13 bankruptcy laws. Second mortgages that are wholly “underwater” are an exception to the rule against modification and may be avoided and deemed as “unsecured” claims and paid a dividend on the same basis as other unsecured claims such as credit cards. Unsecured claims are usually only paid a small percentage on the dollar under a chapter 13 plan.
Present Real Estate Crisis – Many homeowners owe more on their home mortgages than their present value (“underwater”) and many are unable to pay their monthly payments.
“Making Home Affordable Program” - last week the federal government announced updated information on its “Making Home Affordable Program.” http://www.financialstability.gov/makinghomeaffordable/. This program provides for the refinancing or modification of a mortgage under certain circumstances. More information is available from the federal government’s “Homeowner’s HOPE Hotline” at (888) 995-HOPE.
The Typical Present Distressed Homeowner’s Situation - the typical South Florida homeowner is in a situation where the amounts owed on the first and second mortgages substantially exceed the value of his or her home. Many of the comparable sales are sales of foreclosed homes. Many first mortgages may be adjustable rate mortgages. Property taxes may be high for recent purchasers. Condominium and association fees may have risen due to the default of other unit owner’s default. What is the Typical Homeowner in Crisis Presently to Do? Non-bankruptcy Refinancing or Modification – Most distressed homeowners should immediately contact their mortgage servicers or lenders to attempt refinancing or modifications. Patience may be required as the new provisions of the “Making Home Affordable Program” are now being implemented. Efforts should be made even if you were previously turned down. Participate in Florida Circuit Court Foreclosure Actions- A person who hasbeen served with a mortgage foreclosure action should normally participate in the foreclosure action. There may be opportunities to mediate a modification with the mortgage company. The participation should begin by “answering” the foreclosure complaint within the time period set forth in the summons attached to the foreclosure complaint. The answer may be made by the homeowner himself or through an attorney. Chapter 13 Bankruptcy Protection - If a homeowner is about to lose his or her home in a foreclosure sale, under appropriate circumstances, he or she may consider filing for chapter 13 bankruptcy relief before the foreclosure sale takes place. The Second Mortgage - Most second or junior mortgages are “underwater” and would be avoidable even under the present chapter 13 laws. A wholly underwater second mortgage holder will be avoided and receive a dividend on the same basis as unsecured credit cards. The First Mortgage - The homeowner will seek to refinance or modify his or her first mortgage under the non-bankruptcy “Making Home Affordable Program” or on such other basis as may be available. As the mortgage company will normally have special bankruptcy counsel, a direct line of communication for modification is available facilitating efforts to modify. The chapter 13 plan will typically provide for the first mortgage in the first phase of the plan (i.e. months 1-30) and a dividend to unsecured creditors during the second phase of the plan (i.e. months 31-36). Until a refinancing or modification is reached, the first mortgage company will receive its regular payment or such other lesser amount as may be appropriate. Jordan E. Bublick, Miami and Palm Beach, Florida, Attorney at Law, Practice Limited to Bankruptcy Law, Member of the Florida Bar since 1983
Bankruptcy Attorney Jordan E. Bublick practices Chapter 7 and Chapter 13 bankruptcy law in Ft. Lauderdale and all of Broward County, Florida. Jordan E. Bublick has been a member of the Florida Bar since 1983. Chapter 7 bankruptcy is generally used by people who desire to discharge unsecured debt and who have little non-exempt property. Chapter 13 bankruptcy is used to reorganize secured and unsecured debt as well as to discharge unsecured debt.
Chapter 13 bankruptcy is often used to stop a foreclosure action and proposed a plan of reorganization. Due to the decreased real estate values in South Florida, often a junior mortgage lien may be avoidable as an "unsecured debt."
Certain unsecured debt in not dischargeable in Chapter 7 and Chapter 13 such as certain taxes, student loans, fines, etc.Jordan E. Bublick, Miami and Palm Beach, Florida, Attorney at Law, Practice Limited to Bankruptcy Law, Member of the Florida Bar since 1983
If you are a San Gabriel Valley Homeowner in Southern California, Chapter 13 Bankruptcy may be an alternative you want to consider, particularly where you have 2 or more mortgage payments & your home is underwater in California.
It is important to understand that chapter 13 bankruptcy is a structured means to create a repayment plan for all your creditors. Oftentimes, you can cure arrearages on your home, including property tax. Also, chapter 13 cases allow for a lien strip of underwater mortgages for junior liens in certain situations. It is critical to explore these options as you consider all of your financial options.
Chapter 13 Bankruptcy is not a cure all, nor does it allow someone to walk away from debts. Repayment of debts is required in chapter 13 cases. The key is to select a capable California bankruptcy attorney to handle your chapter 13 case so your payment plan is properly calculated and crafted. An honest and capable attorney should tell you both the good and bad regarding the chapter 13 process. Living through a chapter 13 case is not a pleasant experience and anyone telling you otherwise is being disingenuous. However, in certain situations, chapter 13 bankruptcy can do wonders for individuals saddled with mortgage payments and other debts that are otherwise unmanageable.
Many people go to extreme measure to avoid filing for bankruptcy. There are a number of alternatives that people may consider that can actually be worse in the long run than filing for bankruptcy. Below are a few examples.1. Debt Consolidation Options. There are a number of companies that will offer to consolidate your credit cards and help to improve your credit. Be very cautious here and ask them to explain the entire process to you. Many of the places will tell you to stop making your payments to creditors and direct your payment amounts to the company instead. They will then hold onto this money until it reaches a certain amount and then will negotiate your debt down, sometimes only paying cents on the dollar of what you owe. This can have a number of negative implications. First, your credit will continue to worsen as your bills go unpaid for months. Second, the fees that some of these companies charge are exhorbitant. Third, the difference between what you owe and what they will pay your creditors will be considered taxable income to you. Finally, this is a service that you do not need to pay for. You could hold on to your own money and negotiate the debt down yourself.2. Charge Off of Accounts. Many times debtors are relieved when companies charge off an account or mark it as uncollectable. An important thing to note is that this does not mean that the creditor does not have a legal right to collect. Often times the original creditor will sell the account to another party and that third party may start to harass you about the debt. Also, as mentioned above, any amount charged off is considered "discharge of indebtedness" and is taxable income. For example, if you owe 10,000 to your credit card and they settle for 2,000 the 8,000 written off should be reported on your tax returns the following year. You will be taxed on this money as you are taxed on your income, which may mean that you owe taxes you didn't expect to owe. 3. Ignoring the problem. Creditors will not usually disappear and may even start contacting you at work or contacting your friends and family members. Ignoring the problem will not make it any better.If you have questions, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney Today.
Jordan E. Bublick is a Board Certified Consumer Bankruptcy lawyer (American Board of Certification). The law firm was established in 1985. Practice is limited to bankruptcy law.
Jordan E. Bublick is a graduate of New York University School of Law (LL.M., 1984), Ohio State University College of Law (J.D., 1983), and Brandeis University (B.A., 1979)
North Miami Office - 11645 Biscayne Blvd., Suite 208, Miami, Florida (305) 891-4055
Broward Telephone - (954) 424-6618
Chapter 7 personal bankruptcy is generally used to discharge your dischargeable debt including credit cards, medical bills, and unsecured loans.
Chapter 13 bankruptcy is generally used to reorganize your financial affairs while under the protection of the Bankruptcy Court. Chapter 13 bankruptcy is often used to stop a mortgage foreclosure and to catch the payments up-to-date.
Chapter 11 bankruptcy is also used to reorganize your financial affairs while under the protection of the Bankruptcy Court. Chapter 11 can be used by individuals or corporations.
Practicing in Miami-Dade, Broward, and Palm Beach Counties, including W. Palm Beach, Boca Raton, Ft. Lauderdale, Coral Springs, Miramar, Pembroke Pines, and Plantation.Jordan E. Bublick, Miami and Palm Beach, Florida, Attorney at Law, Practice Limited to Bankruptcy Law, Member of the Florida Bar since 1983
Unfortunately going through divorce is not just an emotional roller coaster but it's also a financial disaster. It has been my experience that most married couples rely heavily on two incomes. Losing an income makes it impossible to maintain their household when dealing with separation or divorce. Yes, Family Court will grant you some relief once the divorce decree has been entered and the debts have been divided, however, most individuals will not be able to pay the debts they have been ordered to pay. In order to relieve one from these debts and the legal liability that goes along with these debts many individuals opt to file bankruptcy (Chapter 7 or Chapter 13) either before or after they have filed for divorce. Bankruptcy and Divorce seem to go hand in hand when talking about a fresh start. Not only are these individuals starting a new chapter in their lives but are starting it debt free or at the very least with their debt under control. Filing for bankruptcy after a divorce may make it possible for you to save your home or keep your vehicle (Chapter 13). In order to get your new life headed in the right direction it's important that you reevaluate your finances and make the necessary adjustments. Bankruptcy may be your answer for a fresh start and a new outlook.
A Chapter 13 Bankruptcy generally lasts for a period of five years. As we all know a lot can change in a five year period. Over the course of five years debtors may marry, have children, need to purchase a vehicle, or even suffer damage to a home or vehicle already owned. If a debtor becomes entitled to insurance proceeds while in bankruptcy he should notify his attorney as soon as possible.
The general rule is that if a debtor becomes entitled to any sum of money it must be turned over to the bankruptcy trustee to be distributed to creditors. Common sources of money that need to be disclosed, and potentially turned over, include money or property from an inheritance, tax refunds, insurance proceeds and so on. As a rule of thumb, if you receive any money you should inform your attorney.
If you want to keep the money that you are entitled to you can file a motion to retain the proceeds. This will have to be submitted to the court and it is generally set on negative notice. This means that your attorney will submit your motion to retain and if no one objects to the motion within 21 days you will be able to keep the money received. Any number of people may object, including the trustee and/or one of your creditors.
It is important to note that if you receive insurance proceeds for property, i.e. a vehicle, and there is a total loss any existing loan balance has to be paid off before any funds would be released to you if your motion to retain is successful.
If you would like to retain insurance proceeds your attorney will need a number of things to prepare your motion to retain. Your attorney will need to know how much money you will be receiving for the property. If the property is not a total loss and just needs repairs your attorney will need to know the estimated cost of repairs. It is best if you can provide a written estimate from a qualified individual to your attorney to file with the motion. If the property is a total lose (i.e. a vehicle that you are not keeping) your attorney will need to know how you intend to spend the money received. Perhaps you need to replace your vehicle. Again, it is best to provide written figures for how you will spend the money. If you would like to purchase a new car with a loan your attorney will also need to submit a motion to incur debt.
Please keep in mind that this process will take time. The motion will be submitted and it will be at least 21 days before a decision is made. From there your attorney will have to submit an order and the judge will need to sign the motion.
If you have questions, or would like to set up a free consultation, contact a St. Louis Bankruptcy Attorney today.
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