Chapter 13 Bankruptcy in Massachusetts
The Bankruptcy Law Office of Brian R. Lewis has successfully represented individuals in many different types of Chapter 13 Bankruptcy proceedings. If you are thinking about filing Chapter 13 Bankruptcy, then please contact us to see how we can help you resolve your financial difficulties. The following are answer to some general questions regarding bankruptcy.
What is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is frequently referred to as a 'wage earner' plan, although it actually applies to individuals with income from any source, not just wages. It is used by people employed by others or self-employed individuals in their own business to re-pay their debt over a reasonable period of time, typically 3-5 years. Chapter 13 permits a debtor to pay a percentage of their unsecured debt back based on the debtor's ability.
Some of the major advantages that may be available to an individual include:
Chapter 13 Trustee
Upon filing the petition for Chapter 13 Bankruptcy, an impartial trustee is appointed by the court to administer the case. A primary role of the Chapter 13 Bankruptcy trustees is to serve as a disbursing agent, collecting payments from debtors and making distributions to creditors.
Automatic Stay
Once you file the petition under Chapter 13, it 'automatically stays' most actions against the individual or their property. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishment, or even telephone calls demanding payments. This is the first sign of real debt relief you feel from this process. Creditors receive notice of the filing of the Chapter 13 bankruptcy filing from the clerk or trustee. By virtue of the automatic stay, an individual debtor faced with a threatened foreclosure of the mortgage on his/her principal residence can prevent an immediate foreclosure by filing a Chapter 13 petition. Chapter 13 Bankruptcy then affords the debtor a right to cure defaults on long-term home mortgage debts by bringing the payments current over a reasonable period of time.
Plan of Repayment
The individual must file a plan of repayment with the petition or shortly thereafter. Plans provide for payments of fixed amounts to the trustee on a regular basis, typically monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which may offer creditors less than full payment on their claims. Within 30 days after the filing of the plan, even if the plan has not yet been approved by the court, the debtor must start making payments to the trustee.
Meeting of Creditors
A 341(a) Meeting of Creditors is held in every case, during which the debtor is examined under oath. It is usually held 20-50 days after the Chapter 13 petition is filed. The debtor must attend this meeting, at which creditors may appear to ask questions regarding the debtor's financial affairs and the proposed terms of the plan. If a husband and wife have filed one joint petition, they must both attend the creditor's meeting. The trustee will also attend the meeting and question the debtor on the same matters.
If there are problems or questions regarding the repayment plan, they are typically resolved at the time of the meeting, or shortly thereafter. Generally, problems may be avoided if the petition and repayment plan are complete and accurate, and the trustee has been consulted prior to the meeting.
After the Meeting of Creditors is concluded, the bankruptcy judge must determine whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. If the plan is confirmed by the bankruptcy judge, the Chapter 13 trustee commences distribution of the funds received in accordance with the plan as soon as practicable.
If the plan is not confirmed, the debtor has a right to file a modified plan. The debtor also has a right to convert the case to a Chapter 7. If the plan or modified plan is not confirmed and the case is dismissed, the court may authorize the trustee to retain a specified amount for costs, but all other funds paid to the trustee are returned to the debtor.
On occasion, changed circumstances will affect a debtor's ability to make a repayment plan, a creditor may object or threaten to object to a plan, or a debtor may inadvertently have failed to list all creditors. In such instances, the plan may be modified either before or after confirmation. Modification after confirmation is not limited to an initiative by the debtor, but may be at the request of the trustee or an unsecured creditor.
Making the Plan
Once the court confirms the plan, it is the responsibility of the individual to make the plan succeed. Regular payments to the trustee must be made, which will require adjustment to living on a fixed budge for a long period. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor may not incur any significant new credit obligations without permission of the court while the plan in ongoing. Failure to make the payments may result in dismissal of the case or its conversion to a liquidation case under Chapter 7 Bankruptcy.
The Chapter 13 Discharge
The bankruptcy law regarding the scope of the Chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult a Bankruptcy Attorney prior to filing regarding the scope of the Chapter 13 discharge. The Chapter 13 debtor is entitled to a discharge upon successful completion of all payments under the Chapter 13 plan. The discharge has the effect of releasing the debtor from all debts that are dischargeable and provided for by the plan and allowed, with limited exceptions.
We Can File Today!
That's right - we can file your bankruptcy today in order to stop a foreclosure or garnishment if you need us to. The United States Bankruptcy Court accepts electronic filings, which means that if you come to our office, we can literally file the paperwork with the Court from the office by e-mail and stop the foreclosure.
Making the decision to file bankruptcy can be confusing and difficult. Contact the Law Office of Brian R. Lewis today for your free initial consultation today!
The Bankruptcy Law Office of Brian R. Lewis has successfully represented individuals in many different types of Chapter 13 Bankruptcy proceedings. If you are thinking about filing Chapter 13 Bankruptcy, then please contact us to see how we can help you resolve your financial difficulties. The following are answer to some general questions regarding bankruptcy.
What is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is frequently referred to as a 'wage earner' plan, although it actually applies to individuals with income from any source, not just wages. It is used by people employed by others or self-employed individuals in their own business to re-pay their debt over a reasonable period of time, typically 3-5 years. Chapter 13 permits a debtor to pay a percentage of their unsecured debt back based on the debtor's ability.
Some of the major advantages that may be available to an individual include:
- Having up to 5 years to catch up on delinquent mortgage or auto payments.
- Eliminating a second or subsequent junior mortgage from the home.
- Eliminating judgment liens from the home.
- Cramming down auto loans to the current value of the automobile.
- Stopping wage garnishments.
- Stopping collection efforts of the IRS and state tax authorities.
Chapter 13 Trustee
Upon filing the petition for Chapter 13 Bankruptcy, an impartial trustee is appointed by the court to administer the case. A primary role of the Chapter 13 Bankruptcy trustees is to serve as a disbursing agent, collecting payments from debtors and making distributions to creditors.
Automatic Stay
Once you file the petition under Chapter 13, it 'automatically stays' most actions against the individual or their property. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishment, or even telephone calls demanding payments. This is the first sign of real debt relief you feel from this process. Creditors receive notice of the filing of the Chapter 13 bankruptcy filing from the clerk or trustee. By virtue of the automatic stay, an individual debtor faced with a threatened foreclosure of the mortgage on his/her principal residence can prevent an immediate foreclosure by filing a Chapter 13 petition. Chapter 13 Bankruptcy then affords the debtor a right to cure defaults on long-term home mortgage debts by bringing the payments current over a reasonable period of time.
Plan of Repayment
The individual must file a plan of repayment with the petition or shortly thereafter. Plans provide for payments of fixed amounts to the trustee on a regular basis, typically monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which may offer creditors less than full payment on their claims. Within 30 days after the filing of the plan, even if the plan has not yet been approved by the court, the debtor must start making payments to the trustee.
Meeting of Creditors
A 341(a) Meeting of Creditors is held in every case, during which the debtor is examined under oath. It is usually held 20-50 days after the Chapter 13 petition is filed. The debtor must attend this meeting, at which creditors may appear to ask questions regarding the debtor's financial affairs and the proposed terms of the plan. If a husband and wife have filed one joint petition, they must both attend the creditor's meeting. The trustee will also attend the meeting and question the debtor on the same matters.
If there are problems or questions regarding the repayment plan, they are typically resolved at the time of the meeting, or shortly thereafter. Generally, problems may be avoided if the petition and repayment plan are complete and accurate, and the trustee has been consulted prior to the meeting.
After the Meeting of Creditors is concluded, the bankruptcy judge must determine whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. If the plan is confirmed by the bankruptcy judge, the Chapter 13 trustee commences distribution of the funds received in accordance with the plan as soon as practicable.
If the plan is not confirmed, the debtor has a right to file a modified plan. The debtor also has a right to convert the case to a Chapter 7. If the plan or modified plan is not confirmed and the case is dismissed, the court may authorize the trustee to retain a specified amount for costs, but all other funds paid to the trustee are returned to the debtor.
On occasion, changed circumstances will affect a debtor's ability to make a repayment plan, a creditor may object or threaten to object to a plan, or a debtor may inadvertently have failed to list all creditors. In such instances, the plan may be modified either before or after confirmation. Modification after confirmation is not limited to an initiative by the debtor, but may be at the request of the trustee or an unsecured creditor.
Making the Plan
Once the court confirms the plan, it is the responsibility of the individual to make the plan succeed. Regular payments to the trustee must be made, which will require adjustment to living on a fixed budge for a long period. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor may not incur any significant new credit obligations without permission of the court while the plan in ongoing. Failure to make the payments may result in dismissal of the case or its conversion to a liquidation case under Chapter 7 Bankruptcy.
The Chapter 13 Discharge
The bankruptcy law regarding the scope of the Chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult a Bankruptcy Attorney prior to filing regarding the scope of the Chapter 13 discharge. The Chapter 13 debtor is entitled to a discharge upon successful completion of all payments under the Chapter 13 plan. The discharge has the effect of releasing the debtor from all debts that are dischargeable and provided for by the plan and allowed, with limited exceptions.
We Can File Today!
That's right - we can file your bankruptcy today in order to stop a foreclosure or garnishment if you need us to. The United States Bankruptcy Court accepts electronic filings, which means that if you come to our office, we can literally file the paperwork with the Court from the office by e-mail and stop the foreclosure.
Making the decision to file bankruptcy can be confusing and difficult. Contact the Law Office of Brian R. Lewis today for your free initial consultation today!