1) What is
the purpose of Chapter 13?
CHAPTER 13
is a bankruptcy designed for
individual debtors who have some regular flow of income
seeking an adjustment of debt. Chapter 13 is used
primarily for people with mortgage and maintenance debt
or other secured debt who wish to keep their
assets, yet need time to stretch out these arrears or
back payments in a Plan to deal with their creditors.
The time frame is generally 36 to 60 months. Chapter 13
will stop a foreclosure up until the day and time of a
sale. Depending upon your equity in the house, some
payments to unsecured creditors, credit card and
personal loan debt, may also be necessary. Chapter 13
may also be utilized to handle debts which are not
dischargeable in a Chapter 7. This may include back
taxes, student loans, child support, and debts that
involve some type of fraud or misrepresentation on the
debtor's part, assuming there is good faith on the
debtor's part. Chapter 13 may also be used to handle
situations in which individuals may wish to retain their
assets, yet pay back their creditors in a more favorable
treatment than allowed by their creditors. Also, Chapter
13 may be used by individuals having a cash flow
problem, whereby there is some disposable income
available to pay back creditors in whole or in part, but
not a sufficient amount to satisfy creditors outside of
the bankruptcy process. The debt ceiling for unsecured
debt in a Chapter 13 is $336,900.00 and for secured debt
is $1,010,650.00 (as adjusted for cost of living in April
2007).
A Chapter 13 is now
available for those individuals whose income is too high
to pass the means test and may still wish to file for
bankruptcy that will provide some debt relief. However,
some or all of the debt may be required to be paid back
in this situation. A complete office consultation by
competent legal counsel will be necessary to make that
determination.
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Questions
2) What documents are generally
needed and what are the fees to file a Chapter 13?
DOCUMENTATION & FEE STRUCTURE:
You will
need to bring in six months of current pay stubs, if
working; tax returns or tax transcripts for the past
four years, if available; your bills, (one for each
credit card, store card, personal loan, medical bill,
car loan, mortgage loan, student loan, IRS & NYS
Department of Tax bill(s), and other assorted bills);
your driver’s license or non-driver’s photo
identification; your social security card; your bank
statements for the past sixty days, a copy of all deeds,
and all mortgage payoff statements; and a $100.00
retainer. It is required for you to sort and organize
your bills by eliminating for us all envelopes and
attachments, and duplicates. We do want to see any
collection letters, attorney letters, and legal notices.
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It would be quite helpful
if you are able to sort and organize your bills by
eliminating for us all envelopes and attachments. If you
do not have a complete list of creditor, see information
below for generating a free credit report. The fee for a
Chapter 13 varies depending on the complexity of the
case. The fee is payable over a five (5) month period.
However, the petition cannot be filed until payment is
made in full. However, we will deal with your creditors
during this period (see next paragraph). You will
receive four bills, providing a payment schedule so that
full payment may be made by the due date. If you have
been making good faith payments and run into a problem,
call our office.
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Questions
3) Is there creditor relief if
you retain our office?
CREDITOR RELIEF:
After you have retained our
office, you may direct creditors who call you to contact
our office to confirm or verify that we have been
retained to file a Chapter 13 bankruptcy on your
behalf. Please provide to your creditors your own
personalized office file number for easy identification.
You are only required to give our name and telephone
number and pursuant to the Fair Debt Collection &
Practices Act creditors are prohibited from calling you
at home or work after you have retained an attorney.
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Questions
4) What
responsibilities do I have?
LISTING OF CREDITORS:
The first major task after
meeting with you and explaining to you your alternatives
is the filing of a Chapter 13 Petition. All creditors
must be listed in your Petition. Failure to list a
creditor will result in the inability or litigation with
regard to receiving a discharge from that debt. The
unlisted creditor will eventually seek to collect on
that debt. Consequently, it is vital that all creditors
with their proper correspondence addresses be
ascertained and listed. Failure to list a creditor can
also be a double whammy. You not only will have to fight
off that creditor, but you will have your credit card
privileges canceled.
OBTAINING A CREDIT REPORT:
The fastest and
easiest way to get a free credit report is to go to
www.annualcreditreport.com.
Once you're there, select your state,
and click on “Request Report”.
Fill out the form with the required information then
click on "Continue".
You should choose the "Experian"
and "Equifax" credit
reports. You are entitled to one free
credit report from each of the three reporting agencies.
You must go to this site to obtain the free report.
In the alternative, print the application form by
clicking on the following link and mail to the directed
address.
Click here for your
Free Credit Report by Mail or Phone.
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Questions
5) What hearings do I have to attend?
HEARING:
Within approximately thirty days from
the date that our office has filed your Chapter 13
Petition, you will be required to attend a hearing
concerning your Petition. The hearing is conducted by a
Trustee. The Trustee is not a judge but an attorney
whose job it is among other things to review your
Petition for its truth and accuracy. The Trustee will
recommend to the Bankruptcy Judge handling your case
whether you have complied with the bankruptcy law and
are ready for confirmation. An attorney from our office
or representing our office will be there to assist you
with the hearing process which is generally
non-confrontational.
CONFIRMATION:
Approximately 1 month after this
hearing, you will be required to attend a Chapter 13
confirmation hearing in front of a judge or a Trustee.
This hearing date is on the original Notice sent to you
by the court. Once again, call our office three (3) days
prior to the Hearing. In order for your Plan to be
confirmed, pay careful attention to the following:
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Questions
6) What are my payment obligations and
responsibilities?
MORTGAGE PAYMENTS:
Once a Chapter 13 Bankruptcy
Petition is filed on your behalf, you are required to
make your next regularly scheduled monthly mortgage
and/or maintenance (if you own a co-op or condo)
payment(s). For example, if we file your petition on the
20th of January, then you will have to resume your
mortgage and/or maintenance payments that would be due
on the first of February, assuming your payment
obligation falls on the first of the month. If you are
delinquent with what we now call the post-petition
payments (those payments due after we have filed your
petition), then your secured creditor(s), the bank and
or co-op/condo board, will through its attorneys request
from the Court to Lift the Automatic Stay which is
protecting you from legal action, to commence or resume
a foreclosure action. If you want to have a successful
reorganization of your debts through a Chapter 13 Plan,
post- petition payments to secured creditors must
continue or resume and must be made on time. If you are
having difficulty with those payments, you must contact
our office immediately.
TRUSTEE PAYMENTS:
Additionally, (this paragraph
applies to all Chapter 13 petitioners), in order to
demonstrate your good faith and the feasibility of the
Chapter 13 Plan, starting no later than 30 days after
your Plan has been filed (generally the same date your
petition has been filed), you need to make monthly
payments to the Trustee. This payment is in addition to
any payments you may be making for your mortgage or
maintenance post-petition. These payments must be made
by MONEY ORDER or CERTIFIED CHECK only. The Case Number
and/or File Number must be on all payments. Payments
should be made out to Jeffrey Sapir, Trustee and mailed
to 399 Knollwood Road, Suite 102, White Plains, New York
10603. Until Confirmation and only until Confirmation,
copies of all payments made to the Trustee must be made
to our office. Do not send actual payments to our
office. We only want to see a copy of the payments. This
is the only way our office can adequately monitor your
progress. Thus, for a four (4) month period, every time
you make out your money order or certified check, you
will send a copy of it to our office. Your cooperation
is greatly appreciated. When a payment is due right near
the time of the Confirmation, call our office for
further instructions.
You need to make the payments
to the Trustee each month. For example, if you file on
January 10th, your next regular payment is due no later than
February 10th and the 10th day of every month thereafter
until your Plan payments have been completed which is
usually 36 or 60 payments, that is 3 years or 5 years. Your
Plan cannot be confirmed unless you are current with your
payments to the Trustee. Failure to make these payments will
result in a Motion by the Trustee to dismiss your case and
which if granted would place you out of the legal protection
of the Bankruptcy Court and subject you once again to your
creditors foreclosing if you own a house, condo or co-op or
the commencement or the resumption by your creditors of any other
legal action that they were previously taking against you.
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Questions
7)
What are the expected outcomes?
EXPECTED OUTCOMES:
Assuming no special circumstances,
if you are making your post-petition payments for your
mortgage or maintenance, if any are required, and your are
making your regularly scheduled monthly payments to the
Trustee pursuant to your Plan, and you have provided our
office with all requested documents, you will be ready for
Confirmation and you will be on your own to make payments to
the Trustee for the generally 3 or 5 year period of your
Plan. Once the Plan is confirmed, you will still get no
monthly bills from the Trustee. It is your responsibility to
make those monthly payments. Once a year you will receive a
printout indicating how your payments were made to your
creditors. You will also be obligated to provide the Trustee
with a copy of your tax returns, each year that you are
still within the Plan. If you get substantially delinquent,
the Trustee will petition the Court to dismiss your case and
no payments made post-confirmation shall be returned to you
and you will be back where you started with respect to your
creditors, less a credit for any distributions made. At the
conclusion of your Plan period, generally 36 or 60 months,
you will receive a legal discharge of your listed debts.
CREDIT REPAIR:
If you would like to assist in
repairing your credit history, one (1) way is to obtain
secured credit cards. You generally place a minimum of
$100.00-$300.00 in a savings account and receive a credit
line up to the value of the account, or even 150% of the
value of the account, in some cases. Timely payments of
minimums or timely paying off the entire balance each month
will demonstrate a new history that will enable you to
better obtain future credit. If, and only if, secured
credit cards are used wisely, they may be of great benefit
to you. Remember, while in a Chapter 13, utilizing credit
for more than $600.00 requires the approval of the Trustee.
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Questions
8)
What are the directions to your office?
DIRECTIONS:
2525 Eastchester Road, private house,
white brick with white awning, diagonally opposite Met Food
near Eastchester Road & Mace Avenue. TRAIN: #5 to Gunhill
Road: Seven blocks from station; BUS: #26 bus to Allerton
Avenue, walk south (towards Pelham Parkway direction) but go
only on long block. #31 to Eastchester Road & Mace Avenue;
CAR: Bronx River Parkway, take Pelham Parkway to Eastchester
Road, left on Eastchester Road, go three blocks and proceed
slowly past Mace Avenue, 8th private house on
left hand. If coming from Hutchinson River Parkway, exit on
Pelham Parkway West. Right on Eastchester Road, go slowly
past Mace Avenue.
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Questions
Do
you have any questions based on this informational packet?
Please feel free to
contact our office for a free follow-up
telephone consultation or call to schedule an appointment.
THANK YOU FOR YOUR INQUIRY. I LOOK
FORWARD WORKING WITH YOU!
