chapter 13 bankruptcy

Chapter 13 Bankruptcy : 

Chapter 13 Bankruptcy American Advantage Law Group, Inc. Presents

How Chapter 13 Works : 

How Chapter 13 Works Overview Chapter 13 can be a good solution for people who need time to pay off certain debts and who have enough income to meet the Chapter 13 requirement. You get to keep all of your property regardless of the value; however, you will have to pay your unsecured debtors (ex. credit card debts, medical debts, and most court judgments) Good for those facing foreclosure on home. You get to keep your home by proposing a feasible repayment plan that includes your missed payments, as long as you stay

Which Debts are Discharged in Chapter 13 Bankruptcy : 

Which Debts are Discharged in Chapter 13 Bankruptcy Debts that are discharged: generally most credit card debts, medical bills, lawyer bills, court judgments and loans, debts you owe an ex-spouse Debts that are not discharged: Debts that you don’t list in your bankruptcy forms Court-imposed fines and restitution Back child support and alimony Student loans Recent back taxes Taxes for years in which you did not file a return Debts you owe bc of a civil judement arising out of your willful or malicious acts, or for personal injuries or death caused by your drunk driving

Is Chapter 13 Right for You? : 

Is Chapter 13 Right for You? If you don't have a steady income, your only bankruptcy choice is Chapter 7 Bankruptcy Upper Income filers must use Chapter 13 If your average monthly income during the 6 months before you file for bankruptcy is higher than the median income for your state, you may not be able to use Chapter

Reasons to Choose Chapter 13 : 

Reasons to Choose Chapter 13 Generally, Chapter 13 makes sense if you will have adequate, steady income to fund your plan for the appropriate period of time, and are in the following situations: Facing foreclosure on your home or your care is being repossessed, and you want to keep your property You owe more on real estate that you own as a vacation or investment property than that property is worth, and you can have your mortgage reducedthe value of the property You have more than one mortgage and are facing foreclosure bc you cant make all the payments . Your car is reliable and you want to keep it, but it’s worth far less than you owe. You have a codebtor who will be protected under Chapter 13 plan but who would not be protected if you used Chapter 7

Reasons to Choose Chapter 13 (…continued) : 

Reasons to Choose Chapter 13 (…continued) You have a tax obligation, student loan, or other debt that cannot be discharged in bankruptcy, but can be paid off over time in a Chapter 13 plans. You owe debts that can be discharged in a Chapter 13 bankruptcy but not in Chapter 7 bankruptcy You will to use Chapter 13 forum to sue one or more harassing creditors for violating state and federal anti-harassment laws. You have a retail business that you would have to close down in a Chapter 7 bankruptcy but can continue to operate in Chapter 13 You have valuable personal property that you would lose in a Chapter 7 case, but could keep if you file for Chapter 13. You have a sincere desire to repay your debts, but you need the protection of the bankruptcy court to do so.

The Automatic Stay : 

The Automatic Stay The Automatic Stay Actions Prohibited by the stay Its called “automatic” because you don't have to ask the court to issue the stay, and the court doesn't have to take any special action to make it effective Once you file, the stay is in place automatically What it does The stay prohibits creditors and collection agencies from taking any action to collect most kinds of debts you owe them, unless the law or bankruptcy court says they can

The Automatic Stay(…continued) : 

The Automatic Stay(…continued) What the Stay does… They cannot Collect credit card debts, medical debts, and attorney fees They cannot Cease public benefits, but you may become ineligible Stops the IRS from issuing a lien or seizing your property or income Foreclosures are stayed by your bankruptcy filing Companies providing you with utilities cannot cut you off Actions not stopped by the stay Divorce and child support Tax proceedings Pension loads

Are You Eligible to Use Chapter 13? : 

Are You Eligible to Use Chapter 13? Prior Bankruptcy Discharges May Preclude a Chapter 13 Discharge You can’t get a Chapter 13 discharge if you received a discharge in a previous Chapter 13 case in the last two years or a discharge in a Chapter 7 case filed within the last four years. Business Entities Can’t File for Chapter 13 Bankruptcy To file a Chapter 13 bankruptcy case, you must be an individual (or a husband and wife filing jointly) If you own your own business as a sole proprietor or partner, you can include all business debts on which you have personal liability. You have to file your case in your name, however, not in the name of the business, because a business entity cannot file for Chapter 13 Bankruptcy. Your Debts Must Not be too High You do not qualify for Chapter 13 Bankruptcy if your secured debts exceed $1,081, 400 or your unsecured debts are more than $360, 475. You have to include debts that are both liquidated and uncontingent. A debt is liquidated if you know the exact dollar amount you owe A debt is uncontingent if you owe it regardless of what happens in the future.

Are You Eligible to Use Chapter 13?(…continued) : 

Are You Eligible to Use Chapter 13?(…continued) You Must Stay Current on Your Income Tax Filing Within several months after you file for bankruptcy, you will have to prove that you filed federal and state income tax returns for the four prior tax years. You can prove this by submitting the returns themselves or transcripts of the returns obtained from the IRS. You have to give the returns or transcripts to the trustee no later than the date set for your first meeting of creditors (about a month after you file). In addition to getting current on your tax returns, you have to produce your most recent federal tax returns for the trustee no later than seven days before the first date set for the meeting of creditors. During the course of your plan, you must remain current on your tax filing and must provide the trustee with copies of your returns. You Must Keep Making Your Child Support and Alimony Payments You must meet your current support obligations during the course of your plan.

Are You Eligible to Use Chapter 13?(…continued) : 

Are You Eligible to Use Chapter 13?(…continued) You Must File Annual Income and Expense Reports You are required to file annual income and expense reports in order to keep our Chapter 13 case going. Your Proposed Repayment Plan Must Pay All Required Debts Certain debts must be paid in full in a Chapter 13 plan. If your current monthly income, less reasonable living expenses, won’t allow you to pay off those debts within the required plan period, then the court will not confirm your plan. In addition to your required debts, you must also pay a commission to the trustee, equal to about 10% of the total payments you make under your plan. Debts that must be paid: Priority debts: unsecured debts for which you haven’t pledged collateral and for which the creditor has not filed a lien against you, and that are considered sufficiently important to jump to the head of the bankruptcy repayment line. Secured debts that will outlive your plan: your plan must provide that you will keep current on secured debts that will last longer than your repayment plan. Other secured debts must be paid in full under the plan: tax liens on your property, promissory notes securing personal property collateral, and judgment liens that can’t be removed for one reason or another

Are You Eligible to Use Chapter 13?(…continued) : 

Are You Eligible to Use Chapter 13?(…continued) Your Unsecured Creditors Must Get at Least as Much as They Would have Received in a Chapter 7 Bankruptcy Although using Chapter 13 allows you to keep your property, it does not allow you to deprive these creditors of the money they would have received if you had used Chapter 7. Your plan must propose payments to your non-priority, unsecured creditors that are at least equal to what they would have received in a Chapter 7 case. You Must Participate in an Approved Personal Financial Management Course Although you don't have to take a personal financial management course prior to filing for Chapter 13, you must complete a program before the court will discharge your debts. Look on trustee’s website at www.justic.gov/ust for more information about the requirements for these agencies and how to find one.

Do You Have to Use Chapter 13? : 

Do You Have to Use Chapter 13? Can You Pass the Means Test? There are two income tests that determine whether you are eligible for Chapter 7 bankruptcy The Means Test: debtors whose average household income over the previous six months exceeds the median income in their state for a family of their size must take this test. These debtors must answer a series of questions about their income and expense to determine whether they have enough extra income to fund a Chapter 13 plan. If you fail the means test, you are presumed to be abusing the bankruptcy laws and will be forced into a Chapter 13 bankruptcy unless you can prove that the law shouldn't apply to you for some reason. The “abuse under all the “circumstance test”: This test compares your actual income to your actual expense to determine whether you have enough money coming in to repay some of your debts.s If you fail this test, the Office of US Trustee has the burden of proving your

Can You Propose a Plan the Judge Will Approve? : 

Can You Propose a Plan the Judge Will Approve? Before you are allowed to proceed with your Chapter 13 bankruptcy, the judge must approve your repayment plan. It will be approved only if your plan shows that you will have enough steady income to: Pay certain types of debts in full over the life of your plan, Pay your nonpriority, unsecured creditors at least what they would have received if you had filed under Chapter 7 The plan must also show that all of your “disposable income” will go toward paying your remaining debts for the duration of your plan How long your plan must last and how must money you must devote to it depends on whether your current monthly income is more or less than your state’s median income If you current monthly income is less than the median income for your state: you can propose a three-year plan, and may use your actual expenses to calculate your disposable income. If your current monthly income is more than the median income for your state: your plan must last five years, and you must use expense amounts set by the IRS

Complete Your Bankruptcy Forms : 

Complete Your Bankruptcy Forms Get Some Information from the Court Fees Total fee to file for Chapter 13 bankruptcy is $274 Verify the amount w the court Local Forms Besides official forms that every bankruptcy court uses, your local bankruptcy court may require you to file one or two additional forms Local Court Rules You can get your local rules from the bankruptcy court –in person or on its website- though these rules mainly govern hearings conducted by the bankruptcy judge and aren’t relevant in routine bankruptcy cases Number of Copies Find out how many copies your court requires Order of Papers and Other Details Visit court and examine court’s sample filing For Married Filers Should you file jointly? It will depend on which option allows you to discharge more of your debts and keep more of your property

Complete Your Bankruptcy Forms(…continued) : 

Complete Your Bankruptcy Forms(…continued) Required Forms and Documents Checklist of required bankruptcy forms Form 1- Voluntary Petition Form 3A (to pay your filing fee in installments) Form 3B (if you apply for a fee waiver) Form 6- Schedules Form 7- Statement of Financial Affairs Form 21- Statement of Social Security Number Form 22C- Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income Form 201A- Notice to Individual Consumer Debtors Under §342 of the Bankruptcy Code Mailing Matrix Local forms if any

Required Forms : 

Required Forms Form 1- Voluntary Petition Exhibit D- this exhibit is necessary, debtors filing for Chapter 7 bankruptcy are required to participate in debt counseling session within 180 days of their bankruptcy filing. Exhibit D tells court whether you’ve complied w the requirement Form 6- Schedules refers to a series of schedules that provides the trustee and court with a picture of your current financial situation. Schedule A-J- Real Property, Personal Property, Property Claimed as Exempt, Creditors Holding Secured Claims, Creditors Holding Unsecured Priority Claims, Creditors Holding Unsecured Nonpriority Claims, Executory Contracts and Unexpired Leases, Codebtors, Current Income of Individual Debtors, Current Expenditures of Individual Debtors Form 7- Statement of Financial Affairs this form gives info about your recent financial transactions, such as payments to creditors, sales, or other transfers of property and gifts.

Required Forms(…continued) : 

Required Forms(…continued) Form 21- Statement of Social Security Number  Form 22C- Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income If your current monthly income was more than your state’s median income, you fill this form to find out whether you could propose a plan that the court would likely confirm. Form 201A- Notice to Individual Consumer Debtors Under §342 of the Bankruptcy Code This form gives you some info about credit counseling and the various types of bankruptcy available.

Drafting Your Plan : 

Drafting Your Plan Your Chapter 13 plan is the cornerstone of your bankruptcy case. The plan tells the court and your creditors how you intend to repay your debts, including the total amount you will pay each month, how much creditor will receive under your plan, and how long your plan will last. Your repayment plan will control your financial life while your bankruptcy is pending. Chapter 13 Plan Formats General rules for drafting a repayment plan are the same everywhere, but many details are determined by individual bankruptcy districts and courts.

Drafting Your Plan : 

Drafting Your Plan What You Must Pay To propose a plan that the judge will confirm, you must show that you will have sufficient income, after deducting allowed expenses, to pay certain debts in full over the life of your plan. Some of these debts must be paid through your Chapter 13 plan, that is, you must pay the trustee, who will then pay the creditor.

Drafting Your Plan(…continued) : 

Drafting Your Plan(…continued) What you must pay through your plan: At a minimum, you must pay all of the following debts through your Chapter 13 Plan: All priority debts other than child support owed to a gov agency All secured debts that are contractually due to end within the life of your plan. If the debt is no longer secured when you file, you can strip off the lien and classify the debt as unsecured, then treat it just like your other unsecured debts All other secured debts that aren’t contractually due within the life of your plan Any rerearrage necessary to keep your home, car, or other secured property An amount equal to what your unsecured, nonpriority creditors would have received if you had used Chapter 7 All administrative expenses, including trustee and lawyer fees All of your remaining income

Drafting Your Plan : 

Drafting Your Plan Repayment of Unsecured Debts: Allowed Claims Payments of unsecured debts under your Chapter 13 plan will be based on “allowed claims” filed by your creditors. After receiving notice of your bankruptcy, unsecured creditors that want a share of the payments you make under your plan must file a Proof of Claim All unsecured creditors –whether you owe them priority or nonpriority debts- must file Proofs of Claim in order to be paid by trustee. The deadline for filing a Proof of Claim is 90 days after the date set for the first meeting of creditors.

Filing Your Bankruptcy Papers : 

Filing Your Bankruptcy Papers Gather the Necessary Documents Get Filing Info from the Court How to File Your Papers

How to File Your Papers : 

How to File Your Papers Basic Filing Procedures Step 1: Put all your bankruptcy forms in the proper order Step2: Check that you have signed and dated each form where required Step 3: Make the required # of copies, plus one for you to keep Step 4: Use a standard 2-hole punch to punch the top center of your original set of bankruptcy papers. Don't staple together Step 5: If you plan to mail your documents to the court, address a 9”x 12” envelope to yourself and affix adequate postage to handle one copy of all the paperwork Step 6: Clip or stable money order to petition, payable to the US Trustee Step 7: Mail it to the correct bankruptcy court

Thanks for your time! : 

Contact American Advantage Law Group, Inc Address: 3848 Campus Dr. Suite # 205 Newport Beach, CA 92660   Phone: (949) 863-1888 Fax: (949) 863-1888 Email: americanlawfirm411@gmail.com Website: www. AmericanAdvantageLawGroup.com Thanks for your time!