Chapter 13 Bankruptcy

We handle many complex and simple chapter 13 bankruptcy cases from initial filing through plan administration and eventual discharge, including chapter 13 bankruptcy litigation. The attorneys at The Christine Thea Rubinstein Law Firm devotes a significant part of their firm to the area of Bankruptcy. They provides a wide range of financial services representing individuals, property owners, and businesses.

New York Chapter 13 Bankruptcy Attorneys

Chapter 13 Bankruptcy, known as the "Working man, Wage Earner Bankruptcy," is designed for those individuals who are able to repay a portion of their debts over a three-to-five year period of time. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During this time the law forbids creditors from starting or continuing collection efforts.

Common reason to file Chapter 13 bankruptcy are:

  • Chapter 13 bankruptcy help when you own property not be considered exempt under chapter 13.
  • Chapter 13 bankruptcy legal help from an attorney, to Save your Home without fear of foreclosure.
  • Chapter 13 bankruptcy legal help from a lawyer, to save your Car without fear of repossession.
  • Chapter 13 bankruptcy legal help from an attorney, to have debts worked out, such as student loans.
  • Chapter 13 bankruptcy legal help if you earn too much to qualify for Chapter 7 bankruptcy.

You stand a much better chance of success at acquiring true debt relief by aligning yourself with, skilled New York, bankruptcy lawyers at The Christine Thea Rubinstein Law Firm. Our attorneys are not only trained in handling simple chapter 13 bankruptcy matters, we take care of complex chapter 13 bankruptcy litigation in Nassau County, New York, Suffolk County New York, Brooklyn, Kings and Queens Counties New York and, on Long Island and all New York City boroughs including Bronx, Westchester, Richmond County, and Manhattan New York.

During the course of your Chapter 13 bankruptcy, you will not be permitted to save any money, including putting money into a pension plan or repaying a pension loan. This is because, by filing a Chapter 13 bankruptcy and by seeking the protection of this portion of the law, you are agreeing to pay to the trustee all money not being spent on necessities each month. If you were to put money away for the future, that would break the terms of your agreement with the court. On the other hand, however, you will be able to be secure in the knowledge that you are paying your debts and will emerge from your bankruptcy owing no money to anyone else.

Chapter 13 bankruptcy offers individuals a number of advantages over liquidation under chapter 7 bankruptcy. Perhaps most significantly, chapter 13 bankruptcy offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 bankruptcy plan on time. Another advantage of chapter 13 bankruptcy is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 bankruptcy plan. Doing this may lower the payments. Chapter 13 bankruptcy also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, chapter 13 bankruptcy acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 bankruptcy trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 bankruptcy protection.

An individual cannot file under chapter 13 bankruptcy or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.  In addition, no individual may be a debtor under chapter 13 bankruptcy or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

A chapter 13 bankruptcy case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence.

Unless the court orders otherwise, the debtor must also file with the court:

  1. Schedules of assets and liabilities.
  2. A schedule of current income and expenditures.
  3. A schedule of executory contracts and unexpired leases.
  4. A statement of financial affairs. The debtor must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. The debtor must provide the chapter 13 bankruptcy case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began.
Individual Debt Adjustment

The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)

Advantages of Chapter 13

A Chapter 13 bankruptcy offers individuals a number of advantages over liquidation under a chapter 7 bankruptcy. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under chapter 13 bankruptcy, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all of their mortgage payments that come due during the chapter 13 bankruptcy plan on time. Another advantage of chapter 13 bankruptcy is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 bankruptcy plan. Doing this may lower the payments. Chapter 13 bankruptcy also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, chapter 13 bankruptcy acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 bankruptcy trustee who then distributes payments to creditors. Individuals are protected by the court and will have no direct contact with creditors while under chapter 13 bankruptcy protection.

Chapter 13 Bankruptcy Eligibility

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 bankruptcy relief as long as the individual's unsecured debts are less than $383,175 and secured debts are less than $1,149,525. These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 bankruptcy.

An individual cannot file under chapter 13 bankruptcy or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. In addition, no individual may be a debtor under chapter 13 bankruptcy or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

How Chapter 13 Bankruptcy Works

A chapter 13 bankruptcy case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence.

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

A list of all creditors and the amounts and nature of their claims.

The source, amount, and frequency of the debtor's income.

A list of all of the debtor's property.

A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

When an individual files a chapter 13 bankruptcy petition, an impartial trustee is appointed to administer the case. In some districts, the U.S. trustee or bankruptcy administrator appoints a standing trustee to serve in all chapter 13 bankruptcy cases. The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

Filing the petition under chapter 13 bankruptcy "automatically stays" (stops) most collection actions against the debtor or the debtor's property. Filing the petition does not, however, stay certain types of actions listed under 11 U.S.C. § 362, and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Chapter 13 bankruptcy also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any individual who is liable along with the debtor. Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose.

Individuals may use a chapter 13 bankruptcy proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 bankruptcy petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 bankruptcy filing.

Making the Plan Work

The provisions of a confirmed plan bind the debtor and each creditor. Once the court confirms the plan, the debtor must make the plan succeed. The debtor must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budget for a prolonged period. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor may not incur new debt without consulting the trustee, because additional debt may compromise the debtor's ability to complete the plan.

A debtor may make plan payments through payroll deductions. This practice increases the likelihood that payments will be made on time and that the debtor will complete the plan. In any event, if the debtor fails to make the payments due under the confirmed plan, the court may dismiss the case or convert it to a liquidation case under chapter 7 bankruptcy of the Bankruptcy Code. The court may also dismiss or convert the debtor's case if the debtor fails to pay any post-filing domestic support obligations (i.e., child support, alimony), or fails to make required tax filings during the case.

The Chapter 13 Bankruptcy Discharge

The bankruptcy law regarding the scope of the chapter 13 bankruptcy discharge is complex and has recently undergone major changes. Therefore, debtors should consult competent legal counsel prior to filing regarding the scope of the chapter 13 bankruptcy discharge.

A chapter 13 bankruptcy debtor is entitled to a discharge upon completion of all payments under the chapter 13 bankruptcy plan so long as the debtor:
  1. Certifies (if applicable) that all domestic support obligations that came due prior to making such certification have been paid;
  2. Has not received a discharge in a prior case filed within a certain time frame (two years for prior chapter 13 bankruptcy cases and four years for prior chapter 7 bankruptcy, chapter 11 bankruptcy and chapter 12 bankruptcy cases).
  3. Has completed an approved course in financial management (if the U.S. trustee or bankruptcy administrator for the debtor's district has determined that such courses are available to the debtor. The court will not enter the discharge, however, until it determines, after notice and a hearing, that there is no reason to believe there is any pending proceeding that might give rise to a limitation on the debtor's homestead exemption.
The Chapter 13 Hardship Discharge

After confirmation of a plan, circumstances may arise that prevent the debtor from completing the plan. In such situations, the debtor may ask the court to grant a "hardship discharge. Generally, such a discharge is available only if the debtor's failure to complete plan payments is due to circumstances beyond the debtor's control and through no fault of the debtor or the creditors have received at least as much as they would have received in a chapter 7 bankruptcy liquidation case and or modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge is more limited than the discharge described above and does not apply to any debts that are non-dischargeable in a chapter 7 bankruptcy case.

At The Christine Thea Rubinstein Law Firm, we know that while every bankruptcy remedy and proceeding is unique, most people feel intimidated when filing. The paperwork involved in bankruptcy cases can be quite confusing and, more often than not, your creditors will have teams of lawyers behind them. We work hard to deliver a personal touch and full-service approach that takes the fear out of the process for you, and removes the stigma of a bankruptcy filing. We will even work with you to help you rebuild your credit after chapter 13 bankruptcy through our credit repair division.

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We are dedicated to your success — so contact us. Speak with one of our knowledgeable Long Island chapter 13 bankruptcy attorneys, personal bankruptcy litigation attorneys today from wherever you are in New York in Nassau and Suffolk, Brooklyn, Kings and Queens Counties, on Long Island and all New York City boroughs including Bronx, Westchester, Richmond County, and Manhattan.

Call 1-800-200-1529 today.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Get help with a Chapter 13 Bankruptcy plan now be prepared before creditors freeze your bank account or garnish your pay.

You should know you have certain legal rights and must be very selective of the Lawyer or Law Firm that you chose to represent you. Have an Attorney council you on the Right Decision for You.

You should know you have certain legal rights and must be very selective of the lawyer or law firm that you chose to represent you. Have an attorney council you on the right decision for you and your family.

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