Chapter 13 is a very effective type of bankruptcy case and is used by individuals in various situations to reorganize and reduce debt. A Chapter 13 bankruptcy case is often used by persons whose mortgages are in distress to save their homes from being lost to the foreclosure process. A Chapter 13 filing would immediately stop the foreclosure process, including foreclosure sales, and allow the property owner filing the case to cure, or “catch-up” on mortgage arrears and other debt over a five (5) year Chapter 13 plan. Alternatively, the Chapter 13 filer can try to resolve their mortgage issues by seeking a mortgage modification under a “loss mitigation” Chapter 13 plan, which incorporates the mortgage modification effort into the Chapter 13 case with the goal of obtaining a mortgage modification agreement and seeking to confirm the Chapter 13 plan based on such potential modification agreement. Chapter 13 is also used by individuals who do not qualify for Chapter 7 relief because they have incomes that exceed the means test based on their household size. Chapter 13 is also used by individuals who have filed for Chapter 7 less than eight years ago and therefore cannot file again in Chapter 7, but could file under Chapter 13, which does not have the same kind of bar to repeat filings. Finally, Chapter 13 is used by debtors who have potential assets that would be potentially sold in Chapter 7, but would not cause the same issues in Chapter 13, where such assets would not be liquidated. Debt besides mortgage arrears, such as credit card debt, can also be cured under a Chapter 13 plan, often without interest and often according to a “percentage plan” which pays unsecured debt a reduced pro rata percentage of the principal.
Because under a Chapter 13 case, monthly payments under a plan are intended to cure and reorganize all of the client’s debts, a client’s income and expenses must be carefully calculated for a monthly budget that must allow for payments to satisfy the monthly amount required under the Chapter 13 plan. Documentation for such income in terms of pay stubs, bank statements, and affidavits of contribution need to be obtained to demonstrate that the client can potentially sustain the payments required in the case. If the case is not the client’s first Chapter 13 bankruptcy case, the client may need to file an affidavit of changed circumstances and potentially file a motion to extend the stay past the initial 30 days of the case. The plan must account for the curing of a client’s mortgage arrears, car loan arrears, credit cards, taxes and student loans over a five (5) year plan that is binding on the client’s creditors. The filing of a Chapter 13 case will instantly cause an “automatic stay” to go into effect which will stop all creditor activity including imminent foreclosure sales or repossessions. However, while the Chapter 13 case allows a 5 year or 60 month period of time to catch-up on pre-petition mortgage arrears under a “traditional” plan (see below), the debtor is required to remain current with post-petition payments for secured debt such as mortgages and car loans. A secured creditor not getting regular post-petition payments, such as mortgage payments or car loan payments, can move for relief from the automatic stay, which in a Chapter 13 case would usually be contested, with the debtor seeking to quickly cure the post-petition amount in arrears.
To qualify for Chapter 13 Bankruptcy relief the debtor needs to be an individual or a married couple with regular income. The debtor cannot be a corporation or a legal entity other than an actual, living individual residing in the jurisdiction where the Chapter 13 case is filed. While there is no income limit in Chapter 13, as with Chapter 7, ideally the income to file in Chapter 13 should at least be sufficient to form a positive disposable income in the monthly budget to enable the Chapter 13 debtor to pay the monthly anticipated payment under the proposed Chapter 13 plan to the Chapter 13 Trustee and if the plan is a “traditional” plan, the monthly post-petition mortgage payment to the mortgage holder. There is however a debt limit in a Chapter 13 case with a debt limit, as of April 1, 2022, on secured debt of less than $1,395,875. and on unsecured debt of less than $465,275., for liquidated and non-contingent debt. Other qualifications are that the real property in distress, that the debtor seeks to protect, needs to owned by the debtor or the debtor needs to have some sort of ownership interest in the property to consider the property part of the debtor’s estate and entitled to protection. In addition, if the proposed Chapter 13 plan is a “loss mitigation” plan where the Debtor will try to modify the mortgage while being protected by the Chapter 13 case, the Debtor needs to be liable on the note for the mortgage loan.
The Chapter 13 case is initiated by the filing of a bankruptcy petition and related documents with the Bankruptcy Court. Within two weeks, unless extended by motion, the bankruptcy schedules and Chapter 13 plan need to be filed. Within a month the debtor needs to start monthly payments to the trustee under the plan and pay post-petition secured payments to the mortgage holder (if the plan is a “traditional” plan as defined below). Within 6-8 weeks the Court schedules a creditors meeting where the debtor and their attorney conference the case with the Chapter 13 Trustee and where creditors are given notice and allowed to attend and ask questions. Within 30 days the debtor needs to make a motion for an extension of the stay (if applicable in a repeat case discussed below ) and approximately at the same time the debtor needs to move for permission to engage in “loss mitigation” (as defined below). In a “loss mitigation” case there are regular conferences before the Court to assess the progress of the mortgage modification efforts. Usually there is pressure to get a plan confirmed within several months after filing the case, although the loss mitigation process can substantially delay the confirmation of the plan. If the plan can be confirmed and the debtor makes all required payments for five (5) years under the plan, the debtor will get a discharge for their debts. However, if the plan cannot be confirmed and runs into feasibility issues or the inability of the debtor to make payments required under the plan to the Trustee or outside of the plan to the mortgage holder, the case can be dismissed by motion of the Trustee, or the automatic stay can be lifted by the mortgage holder’s attorney so that they can continue their foreclosure or collection efforts despite the bankruptcy case.
Motions to dismiss, made by the Chapter 13 Trustee (but can in less broad circumstances be made by a creditor or by the Court, on its own), are frequent in the early pre-confirmation part of a Chapter 13 case, where a Chapter 13 Trustee can make such motions to dismiss based on any administrative, procedural, financial or documentary deficiency in the case. The following can be reasons for a motion to dismiss: a) Payment arrears on plan payments to the Trustee; b) Lack of feasibility of the Chapter 13 plan given the proofs of claim by creditors filed in the case; c) Lack of compliance with the production of financial documents requested by the Trustee; d) Problems/delays with the filing of the bankruptcy schedules, Chapter 13 plan or credit counseling certificate etc.; e) non-attendance at critical court meeting hearing dates, such as the creditors meeting; f) unreasonable delays or impossibility in getting a modified loan in a loss mitigation case. Essentially any problem in the early part of a Chapter 13 case gives reason for a motion to dismiss. Once the Chapter 13 plan is confirmed, there are less reasons for a motion to dismiss, except for payment arrears on Chapter 13 plan payments and other critical payment matters. If a motion to dismiss is granted, the case is over and to overcome such order one would need to vacate the dismissal order or start a new Chapter 13 case where possible.
Motions for relief from the automatic stay (or to lift or to modify or to vacate the automatic stay) are made by secured creditors where the debtor has fallen into arrears with post-petition mortgage payments in a “traditional” or “catch-up” Chapter 13 plan. Any secured creditor expecting regular monthly post-petition, mortgage, HELOC, vehicle, tax or other post-petition secured payment, can make a motion for relief from the automatic stay if such payments are not being made timely and motion practice becomes necessary to protect the rights of the secured creditors.
The “traditional” or “catch-up” chapter 13 plan, that has been available since the enactment of the modern Bankruptcy Code in 1978, is a plan where the client will on a monthly basis go back to making post-petition mortgage payments and, in addition, the client will make monthly Chapter 13 plan payments on pre-petition mortgager arrears and debt to a court-appointed trustee. The combination of such payments will allow the client not to fall further behind in mortgage arrears, while at the same time catching up and curing the pre-petition arrears that existed before the filing of the case. A budget, a Chapter 13 plan and bankruptcy schedules, as well as significant other documentation, need to be submitted to the Chapter 13 trustee and Bankruptcy Court as part of the process necessary to confirm the Chapter 13 plan. While secured debt, such as mortgage arrears, and priority debt, such as taxes, need to be paid in full over the plan, unsecured credit card debt could be paid at a percentage on the dollar. Plans that pay unsecured creditors in full, do not necessarily have to offer interest, and are more easily confirmed as “100% plans”, while plans that do not pay unsecured creditors in full are considered to be “percentage plans” and are usually more difficult to confirm.
In a Chapter 13 cases, often the debt that requires reorganization is a mortgage that is in arrears. One way of dealing with mortgage arrears is to offer a plan where the debtor will “catch up” or cure mortgage arrears under a traditional five (5) year plan. A “traditional” or “catch-up” plan works well where the mortgage arrears are moderate, allowing a reasonable plan payment over the 60 month plan. However, because in many foreclosures there are mortgage arrears of many years, which can be high in amount, a “catch up” plan would not always work well, since it may be too expensive on a monthly basis for many debtors to pay both the post-petition monthly mortgage payment, directly to the Lender, and a separate “catch-up” payment, designed to cure all debts and secured debt arrears, to a Chapter 13 Trustee. Therefore, in recent years seeking a mortgage loan modification, through Loss Mitigation programs adopted by most Bankruptcy Courts and Judges, has become a standard way to proceed for individual debtors in Chapter 13. Loss Mitigation is the pursuit of a mortgage modification by the debtor overseen and encouraged by the Bankruptcy Court so that the Court is able to pressure both the debtor’s and lender’s attorneys to coordinate over documents and information in order to determine if the debtor qualifies and should get a modification of their mortgage.
The sequence, in terms of seeking Loss Mitigation, is that the debtor in the initial part of the Chapter 13 case makes a motion in front of the Bankruptcy Court for Loss Mitigation where it tries to show that it has the financial ability to sustain a potential modification of the the defaulted mortgage loan, if a hypothetical modification was offered. The Lender’s attorneys have the right to oppose that motion and to try to show that the debtor would not be able to sustain a modification economically or that the Lender has otherwise already decided to deny the debtor for other factors. Assuming that the motion for Loss Mitigation is granted, the debtor and the lenders attorney’s are required to attend regular Loss Mitigation conferences to determine if the the efforts to obtain a modification are still viable. During this time, while applying for Loss Mitigation, the Chapter 13 debtor pays the hypothetical modification payment under the Chapter 13 plan to the Chapter 13 trustee to demonstrate an ability to pay the monthly estimated amount if the modification was approved.
If the the Loss Mitigation efforts are still viable, and have hope of a modification agreement being ultimately realized, the Bankruptcy Court will keep adjourning the Loss Mitigation conferences. But if the Loss Mitigation efforts look like they are failing, and if reapplication or appeal options on the modification are not realistic, the Bankruptcy Court will end Loss Mitigation and eventually ask the Chapter 13 Trustee overseeing the case to move for dismissal of the Chapter 13 case. On the other hand, if the opposite happens and the Loss Mitigation efforts result in a trial modification that the debtor accepts and pays regularly directly to the Lender, from anywhere from three (3) months to a year, the Lender will eventually offer the debtor a permanent modification agreement. Assuming the debtor wishes to accept the permanent modification agreement, it is subject to Bankruptcy Court approval, after a motion to the Court. Once the permanent modification agreement is approved by the Court, the loan modification may be part of an overall Chapter 13 Plan under which the debtor can now seek to reorganize all of their debts and needs to be confirmed by the Court. Although the confirmed Chapter 13 plan only lasts five (5) years, and mortgage modifications are usually from thirty (30) to forty (40) years in duration, the modification will continue past the five (5) year Chapter 13 plan, with the majority of the modification continuing past the end of the Chapter 13 plan.
In addition to the “traditional”/”catch-up” plan that has always been part of Chapter 13 practice, more recently Bankruptcy Courts through local bankruptcy court rules and specific bankruptcy judge’s rules have allowed “loss mitigation” Chapter 13 plans where the debtor is seeking to modify their mortgage. These “loss mitigation” plans became necessary because many Chapter 13 filers had mortgage arrears that accumulated over many years and were now too high to be practically cured over a 5 year plan. A much longer, 40 year modification, was necessary to save such a distressed mortgages and a “loss mitigation” Chapter 13 plan which allowed for the debtor to resolve their mortgage arrears by seeking a mortgage loan modification became a new practice that most bankruptcy courts would now allow. The differences between the “traditional” plan and the “loss mitigation” plan are stark in that the traditional plan is more expensive but generally safer in that it requires two (2) payments: the catch-up payment to the trustee, which cures mortgage arrears and debts over a maximum of 5 years or 60 months and the regular monthly post-petition mortgage payment to the lender. The combination of the two payments if made over the 5 year life of the plan is more expensive in a traditional plan but also gives the debtor more assurance of being able to resolve their mortgage issues, since the success of such a plan depends on payments and not approval of a modification. By contrast, the “loss mitigation” plan is less expensive in terms of regular payments but also not “guaranteed” in that it depends on the lender approving the debtor’s modification application. During a loss mitigation case the debtor’s attorney has to first make a “loss mitigation” motion which is served on the lender and trustee and heard by the court, to first determine if the debtor should be given the opportunity, based on their finances, to seek a modification. The debtor needs to make only one (1) monthly payment in a “loss mitigation” plan (as opposed to two (2) monthly payments in the “traditional” plan) which is calculated to approximate the ultimate payment that a 40 year loan modification would require. The “approximated potential mortgage modification monthly payment” for the purposes of a proposed loss mitigation plan is calculated by amortizing the payoff amount owed to the lender over a new 40 year amortization loan schedule at the low prevailing floor interest rate for modifications and adding in other non-mortgage debts owed by the debtor, as well as the administrative costs of the case. The debtor’s counsel needs to attend regular status conferences on the loss mitigation effort where the court determines whether to allow continued modification efforts or whether to terminate such efforts if they appear to be futile. The advantage of the loss mitigation hearings before the bankruptcy court is that the lender usually is more amenable to a modification given that it needs to justify its decisions to a bankruptcy judge and is therefore is generally more responsive to the modification effort.
A Chapter 13 case does not usually expose the debtor to the same risks, in terms of potential asset or income issues, as in a Chapter 7 case. A Chapter 13 requires some level of repayment or cure over a 5 year plan, while Chapter 7 simply eliminates the debt. Chapter 7 is not available to many debtors based on income restrictions in the “median income test” and the “budget test’ (see discussion in the sub-section on Chapter 7) which need to be satisfied for a Chapter 7 case to properly proceed. Also if there is excess equity in the debtor’s assets they may want to avoid Chapter 7 as a solution. If a debtor potentially has income that exceeds the means test, or assets or transfers that may be potentially be pursued by a Chapter 7 trustee, the client may often need to or prefer to file under Chapter 13. While a Chapter 13 case, if successful, usually lasts 5 years; a Chapter 7 case is quicker (it takes 3 1/2 months to complete most cases). Besides being quicker, a Chapter 7 case if successful handles most debts in a more efficient, more final and less costly manner by simply eliminating debt. However, Chapter 7 case has more risks in terms of eligibility and potential problems. Chapter 13’s main risk is whether the debtor can sustain the plan payments in order to pay their debt in 5 years. Also a Chapter 7 only deals well with debt that the filer wants to eliminate; a Chapter 7 case, unlike a Chapter 13 case has no reorganization abilities, whether they be through a cure or modification of secured debt arrears. Generally, Chapter 7 cases are mostly used for debts that are primarily unsecured debts, like credit cards, which can be simply discharged, whereas Chapter 13 is used primarily for secured debts that require a more subtle approach like mortgage arrears. In cases where the client can potentially qualify for both Chapter 7 and Chapter 13 cases, and has a need for both, a Chapter 7 case can be filed first to discharge unsecured debt, followed by a Chapter 13 case to deal with mortgage arrears. This kind of sequential filing is descriptively nicknamed a “Chapter 20” (although no such Chapter exists in the Bankruptcy Code) and requires careful pivoting as to financial budgetary abilities. Most of the time, if the unsecured debt is low, or at least reasonable in amount, we deal with it in the Chapter 13 case, by itself, which can, especially in a percentage plan, also deal well with unsecured debt.
A mortgage modification negotiation seeks to lower a client’s monthly payment, restructure the mortgage, and spread mortgage arrears over the term of a restructured, longer mortgage loan, with advantageous terms: a longer term (often up to 40 years) and a lower interest and a possible deferment of some arrears. A “traditional” Chapter 13, by contrast, is much simpler in that it does not change the mortgage terms or the mortgage principal, and only addresses the mortgage arrears which are cured over a 5 year (or 60 month) plan. While a mortgage modification seeks goals, that if obtained exceed the goals in a “traditional” Chapter 13 case, modifications are not always obtainable because they are mostly at the discretion of the mortgage holder who gets to decide when, how and if to grant a modification. Some mortgage holders are difficult to negotiate with and some repeatedly deny a homeowner a modification or take a positions that make it much more difficult to engage in modification negotiations. Although there is an appeals process for modification denials, some government oversight in extreme situations and court oversight in foreclosure and bankruptcy cases, the mortgage holder has a great deal of discretion over modifications. By contrast the 5 year “traditional” Chapter 13 plan is imposed on the mortgage holder, who has no choice with accepting regular post-petition mortgage payments, as long as the debtor continues to stay current in Chapter 13 by paying both the lender, with post-petition mortgage payments, and the Chapter 13 trustee, with monthly payments due under the Chapter 13 plan that are calculated to cure all arrears over the 60 month plan.
A “loss mitigation” chapter 13 plan is similar to a mortgage modification negotiation in that both seek a modification, but the “loss mitigation” chapter 13 plan does it inside a chapter 13 case, where there are some advantages and disadvantages for the debtor. The advantages in a Chapter 13 “loss mitigation” case is the protection of the bankruptcy automatic stay, “loss mitigation” hearings, the oversight by the bankruptcy court and the opportunity by the debtor to demonstrate its ability to sustain a modification with its regular monthly trustee payments. These advantages add formality, process, verification, safety and supervision to the modification process which can be helpful in advanced foreclosure matters on the edge of a foreclosure sale where the debtor has tried and failed to get a modification. However, in simpler or less risky situations, where the foreclosure case is not so advanced, and where direct modification negotiations appear to be feasible and sustainable, the direct modification negotiation effort without the super-structure of a Chapter 13 case with its additional administrative requirements and payment requirements, can be preferable.
It is not not uncommon for a person determined to save their home to try to proceed in Chapter 13 again, after an initial case did not succeed, if they believe that that they potentially could succeed in a new case, especially if they are better situated in terms of income, funds, and/or other issues that may have hindered a previous case. There are statutory obstacles in place to prevent an abuse of repeat bankruptcy filings where they cases may be filed without regard to feasibility and merely to gain time for the bankruptcy filer by repeatedly staying foreclosure proceedings and/or foreclosure auction sales.
a) A Previous Case Terminated Over a Year Ago –
A previous case terminated over a year ago does not statutorily inhibit a new bankruptcy case from being filed. However if the debtor has in the past over-used the bankruptcy system, even if the debtor is not statutorily barred from refiling, a creditor or a trustee will usually be aware of the previous filings which need to be reported by the debtor on the bankruptcy petition for any related cases filed in the last eight years. If the creditor or trustee can cast the debtor as an abuser of the bankruptcy system, who is filing cases merely for delay, it can ask for in rem relief from the automatic bankruptcy stay and/or dismissal of the case with prejudice to refiling another bankruptcy case for a period of time, usually from 180 days to two (2) years.
b) A Previous Chapter 7 Case Discharged Within the Last Year –
A discharged Chapter 7 case, unlike a dismissed Chapter 7 or 13 case, does not inhibit a further filing in Chapter 13 on a statutory basis. As a matter of fact the sequence of first filing in Chapter 7, to discharge unsecured debt, and later filing again in Chapter 13, to address mortgage arrears, is strategy that can help debtors with varied unsecured and secured debt issues. However, here the non-statutory challenge is to be qualified for both the Chapter 7 case, where there needs to be negative disposable income to qualify and shortly there after to qualify for Chapter 13, where there needs to be positive disposable income. Essentially the debtor needs to show a significant income or spending change to qualify for both.
c) A Previous Chapter 13 Case (or Chapter 7 Case) Dismissed Within the Last Year –
If the debtor had only one (1) chapter 13 case pending and dismissed within the last year, or a pending and dismissed chapter 7 case, within the last year, it is possible to file another chapter 13 case, as long as the debtor can verify by motion a “change in circumstances” or an increase in income (or reduction in expenses) necessary to sustain the case. The motion proving the change in circumstances must be both made and granted within 30 days after the bankruptcy filing to extend the stay. If the motion to extend the stay is not made and granted, the initial 30 day automatic bankruptcy stay is terminated and after initial 30 days, creditors can proceed against the debtor as if there was no stay.
d) Two or More Chapter 13 Cases (or a Chapter 13 and a Chapter 7 Case) Dismissed Within the Last Year –
If the debtor had two (2) or more chapter 13 cases pending before the Bankruptcy Court in the last year, that were dismissed, a Chapter 13 case may not be able to stay a foreclosure sale against the debtor’s property. Here, because of the multiple filings within one year, the automatic stay would not go into effect upon the debtor’s filing of the case. To obtain a non-automatic, judicial bankruptcy stay in such situation (of two or more pending and dismissed bankruptcies in the last year) the debtor will need to retain a bankruptcy attorney to quickly move by Emergency Order to Show Cause in front of the Bankruptcy Court and demonstrate strong financial “changes in circumstances” that positively affect the debtor’s chances of success in another Chapter 13 case.
Secondary loan “cram downs” (which are also called “strip downs” or “pond motions”) are a possibility in Chapter 13 for the debtor’s principal residence. If you have a secondary mortgage or home equity loan which is totally unsecured, in a Chapter 13 case it can be deemed to be an unsecured debt (rather than a secured debt) and paid at a vastly reduced amount. To accomplish this we need to file a “pond motion” in the Chapter 13 case to show the Court the complete lack of equity in the property to support the secondary mortgage. Assuming the motion is granted, the client will be treating the second mortgage as an unsecured debt in the Chapter 13 case, and if the client can justify based on the median income test, the budget test and lack of equity in assets, a percentage plan, the entire second mortgage can be paid at a percentage on the dollar and discharged at the end of the five year plan. To succeed in doing so, the client needs to stay in Chapter 13 for the full duration of the plan for this form of relief to have permanent effect. If you believe you quality for such a motion and believe that you can stay long term in your Chapter 13 case until it’s completion, then a secondary loan cram down is potentially a powerful method of reorganization and should be discussed with us.
Amounts listed in a Chapter 13 plan need to be based on the proofs of claim filed by the debtor’s creditors which attach documentary proof and/or calculations to support their claim and its amount. To the extent that a creditor files a proof of claim that significantly exceeds the amount scheduled by the debtor, and the debtor disagrees with such amount and has proof that such amount is incorrect, an objection to the claim can be filed, which if successful would reduce or completely expunge the claim. The debtor can not only object to the amount of the claim, but also to the asserted treatment of the claim (if the treatment claimed is administrative, priority or secured rather than the lower unsecured status) and even the existence of the claim if there is no documentary support for the claim.
In Chapter 13 cases where the median income, the budget and the amount of unprotected equity in the debtor’ s assets allow a “percentage plan”, a Chapter 13 case can potentially allow a client to pay only a relatively small percentage of their unsecured debt. Student loans are unsecured debts but they are also not dischargeable in bankruptcy. This combination means that student loans are unique in that they can at least have relief in the form of a reduced percentage payment for the five (5) years of the plan. Although this debt, unlike virtually all other debts, would still be owed in terms of the remaining portion of the debt that was not paid under the 5 year plan, the client if they can not negotiate a better deal, can refile another Chapter 13 case after concluding the initial case. Thus, a client, through successive Chapter 13 cases, may potentially obtain a long term ability to stretch out and slowly pay down an overwhelmingly large student loan. While this approach may not be necessary for federally backed student loans which generally offer reasonable income based repayment programs, it is the private student loans that are often far less compromising and may need this kind of approach where negotiations do not secure a better deal.
The Coronavirus Aid, Relief and Economic Security (“CARES”) Act which was passed in by the United States Congress in the early part of the 2020 Coronavirus pandemic and signed into law by the President, on March 27, 2020, included not only emergency assistance to families and businesses affected by the pandemic but also some substantive changes to the Bankruptcy Laws, including the Covid-19 hardship extension to the Chapter 13 plan period discussed below. One year later on March 27, 2021, the Covid-19 Bankruptcy Relief Extension Act of 2021 (the “Extension Act”) was passed which enlarged the time covered by the Covid-19 Chapter 13 extensions for another year. The Chapter 13 plan extensions based on Covid-19 hardship operate as follows:
The CARES Act and the Extension Act have allowed a confirmed chapter 13 plan to be potentially extended by up to 2 years based on Covid-19 related hardships. Effectively the extension of a chapter 13 plan from 5 years (or 60 months) to up to 7 years (or 84 months) allows a debtor’s payments to be effectively lowered on a monthly basis and greater flexibility during periods of increased financial hardship for the debtor if the debtor had lapses with plan payments due to Covid-19 related hardship. To obtain this kind of relief the Chapter 13 plan needed to be confirmed prior to March 26, 2021 and the debtor needed to experience a Covid-19 related hardship afterwards. The plan needs to be modified by a motion returnable before the Court and served on the Chapter 13 trustee which shows that the plan was confirmed prior to March 26, 2021 and that the arrears that developed afterward were Covid-19 hardship related.
At the end of the Chapter 13 plan which is usually five (5) years or sixty months (60) in duration, but can be paid earlier, the client’s debt is usually “discharged” or legally forgiven. Prior to the issuance of the discharge order the Chapter 13 trustee needs to acknowledge that the debt was paid in full pursuant to the terms of the plan and that all recognized claims in the case were paid. The client needs to do the 2nd round of credit counseling, which needs to be filed prior to obtaining a discharge order. Most Chapter 13 cases are highly effective in giving clients an opportunity to reorganize and reduce debt over a protracted time while being protected from their creditors.
The Law Office of Ronald D. Weiss, P.C. regularly represents its clients before the United States Bankruptcy Court in Chapter 13 cases, including in the filing and amending of numerous documents and the plan needed to proceed in Chapter 13. The Law Office of Ronald D. Weiss, P.C. represents Chapter 13 bankruptcy clients in the Eastern District of New York (which has jurisdiction over Suffolk County, Nassau County, Queens County, Brooklyn (Kings County), and Staten Island (Richmond County) NY) and in the Southern District of New York (which has jurisdiction over Manhattan, Bronx and Westchester County, NY).
Chapter 13 cases, like other types of bankruptcy cases can effectively help a client deal with its debt, however, a Chapter 13 case can be complex, and to effectively proceed in a Chapter 13 case an individual should be represented by an experienced bankruptcy attorney. The Law Office of Ronald D. Weiss, P.C. can discuss and advise you about Chapter 13 bankruptcy and how and whether it can help your particular circumstances.
A Chapter 13 reorganization is an involved and potentially lengthy bankruptcy case and requires special knowledge and expertise. The Law Office of Ronald D. Weiss, P.C. regularly represents its Long Island and New York clients in Chapter 13 cases before the United States Bankruptcy Court and can review with you issues relevant to a potential Chapter 13 case.
Our consultations are free, the advice may be invaluable.
Please call us at (631) 271-3737, or e-mail us at firstname.lastname@example.org for a free consultation with an attorney, at our Melville, Long Island law office to discuss Chapter 13 bankruptcy options in greater detail.
“I had filed a Chapter 13 case due to real estate tax in arrears. Ronald Weiss and his staff were terrific in helping me move forward with my case and resolve my debt.”