Guiding Clients through
Chapter 13 Bankruptcy

Stopping home foreclosures
Stripping off second mortgages

Each year in the United States, many individuals are overcome by debt. Despite their best efforts, bankruptcy protection becomes a legitimate option for many. At the law office of Riley & Dever, our bankruptcy lawyers work closely with our clients to help them look to the future. Often, we help people with Chapter 13 bankruptcy relief.

A Chapter 13 Bankruptcy is usually filed if you:

(1) Are in default on your mortgage and you want to save your residence and get the mortgage reinstated

(2) Have certain non-exempt property (i.e. house with significant equity) that would be liquidated by a trustee in Chapter 7.

(3) Have certain debts that might not be discharged in Chapter 7 Bankruptcy
(although the former Chapter 13 Bankruptcy “super discharge” was significantly eroded by BAPCPA).

(4) Are not eligible for a Chapter 7 discharge, usually because of a prior Chapter 7 discharge within the past eight years.

(5) A Chapter 7 filing would be presumptively abusive according to the Means Test Formula.

(6) Have an underwater 2nd or 3rd mortgage or home equity loan that you want to avoid or “strip-off” your home.

The underlying premise of Chapter 13 Bankruptcy is that you have sufficient income to not only meet all of their cost of living expenses but also have money left over to pay down your debts. The excess income (“disposable income”) gets paid by you to your Chapter 13 Trustee once a month for the life of your Plan (3 to 5 years depending on medium income requirements).

One advantage to Chapter 13 bankruptcy is that it gives individual debtors the opportunity to save their homes from foreclosure by allowing them to create a payment plan for catching up on missed payments.

Let our experienced bankruptcy attorneys explain how Chapter 13 bankruptcy can help “Strip-Off” a second mortgage OR HOME EQUITY LOAN from your home, and allow you to make past due payments on delinquent first mortgages over a 3-5 year payment plan based on your budget.

Bankruptcy for Debtors
with Regular Income

Many people who are not eligible for Chapter 7 bankruptcy are still eligible for Chapter 13 relief. Chapter 13 bankruptcy provides for the adjustment of debts of an individual with regular income. It allows you to create a repayment plan to repay all or part of your debts over three to five years. During that repayment time, the law prohibits creditors from starting or continuing their collection efforts.

Monthly RE-payment Plans

In Chapter 13 Bankruptcy you get to retain all of your property, but must make monthly payments to a Chapter 13 Trustee for the life of their Plan (3-5 years) .  From these payments the Trustee must pay in full:

  • Past due amounts on defaulted secured debt (mortgages, car loans, etc.)
  • Priority debts (recent taxes, past due child support, etc.)

What is left of the payment goes to your unsecured creditors (credit cards, medical debt, etc.) often for a fraction or percentage of their outstanding debt.

For your proposed monthly payment to be accepted by the court, the total payout must equal to what the liquidation value of your estate would have been if a Chapter 7 had been filed. You must also pay to the Trustee all of his disposable income each month.

The guidance of a skilled attorney is a tremendous asset to people seeking Chapter 13 bankruptcy relief. At Riley & Dever, we talk with you about your specific needs, explain the bankruptcy process, and work together to create a payment plan that meets your needs and is likely to get approved by the court. When working with clients, we think about the long-term.