Chapter 13 Q & A

What is a Chapter 13 bankruptcy?
--A Chapter 13 bankruptcy consolidates all of your bills into a monthly repayment plan. Each month you will make a payment to the assigned Trustee (known a “Trustee Payment.”)
How long does the Chapter 13 plan last?
--The length of the repayment plan generally runs between 3 and 5 years (“Plan Term.”)
--How much will I pay back?
During the plan term, you will pay your unsecured creditors anywhere between 10 and 100 percent of what you owe the unsecured creditors. We strive to make the percentage as low as possible.
--Why would I have to file a Chapter 13?
Most people file a Chapter 13 (rather than a Chapter 7) for one of four reasons:
1) They are behind on their mortgage payments & they want to save their house,
2) They are behind on their car payments & they want to save their car from repossession,
3) They have an asset that would be placed in jeopardy in a Chapter 7 case, or
4) Their income disqualifies them for filing a successful Chapter 7 case.
--What determines the percentage I pay to the unsecured creditors?
It is determined by a large number of factors – including: the household income, how many dependents you have, what kind of debt you have (secured/unsecured/priority). This is part of what the attorney will analyze during the free, confidential consultation.
--Stripping off the 2nd Mortgage:
This is commonly referred to “Lien Stripping” or “Stripping/Removing the Junior Lien.” If the market value of your residence is valued at LESS THAN the amount owed to your first mortgage holder, you may be a candidate to (a) remove the junior liens from the property and (b) have the lien paid through your monthly repayment/trustee payment (for example at 10 cents on each dollar).
--What if my situation changes during the life of my Chapter 13?
If things change during the course of your case, call us. We will evaluate whether or not you are still a good candidate for a Chapter 13 case or if we can safely convert your case to a Chapter 7 case. If possible and appropriate, we can petition the Bankruptcy Court to lower your monthly payments based on the change in circumstances.
--The Filing Process
Filing Chapter 13 is very simple. After your case is filed with the court, you will go with your attorney to the office of the trustee. This meeting takes place about six weeks after your case is filed and is very informal. The purpose of the meeting is for a trustee to go over your case to make sure the plan that we have filed on your behalf is workable. Assuming that the trustee recommends your plan-and he/she almost always does-your case will be set for confirmation in front of a judge. You do not need to be present in court for your confirmation hearing-we will be there for you. Then, all you need to do a make your monthly payment to your trustee

Please feel free to call if you have any questions. We're here to help.

Law Offices of Richard L. Leeds
18321 Ventura Blvd, Suite 900 (East West Bank Building)
Tarzana CA 91356
(818) 654-1900
Fax: (818) 654-1902
Email: Lawyer602@aol.com
website: Rleedslaw.com