| Bankruptcy Chapter 13: What to Expect |
|
How you came to the decision to file bankruptcy always involves trauma and a great deal of soul searching. The average bankruptcy client never expected to need to resort to the bankruptcy courts to resolve their financial problems. Most families manage their bills well in the best of times. It is during the worst of times that the need to resort to bankruptcy arises. The most frequently cited reason for using the bankruptcy option is financial distress caused because of medical necessities. While many people can expect to file a chapter 7 bankruptcy case, increasingly frequently, families are finding themselves bound to the court for at least 3 and perhaps up to 5 years. The reason behind this is the change in the bankruptcy law which happened a few years ago. These laws, suggested by the lending community to congress, have the intent of diverting more cases into a repayment plan than was formerly the case. There are many disclosure requirements you must meet when you file a bankruptcy case. You are best served by having the information for these disclosures immediately available for you attorney to inspect and evaluate. The attorney's job is to make sure that your case makes sense to your creditors, the trustee and the court. But he can not simply make up numbers out of thin air. He is under an obligation to conduct an investigation as to the truthfulness of the claims you will make to the court. Your case will hinge on the accuracy of the information you provide. Have your taxes for the last 3 years as well as bank statements, insurance cash values, retirement account statements and payroll stubs ready for your lawyer. Your chapter 13 plan will be constructed based on your unique circumstances. Guidelines established within the code will rule how and what may be contained and adjusted within the plan, but your finances are based on your needs and lifestyle. Your medical considerations and other necessary expenditures are taken into account in the plan. Please make sure you have included everything required by your attorney and review your petition for accuracy. Errors cause delays which are expensive in terms of money and time. The court takes a dim view of delays and your creditors or the trustee may claim that delays were intentional on your part. You will have to prove that any delays were not structured to prevent your creditors from collecting their pound of flesh. If your property is in foreclosure at the time of filing your attorney has other considerations to take into account. Your arrears can be rescheduled on your primary residence, but you need to be aware that your plan payments must be current at all times after you have filed. If for some reason you fall behind, you can expect your lender or the trustee to take immediate action to either bring you back to current status or to dismiss your case. Be very sure to discuss with your attorney all consequences of your case and actions which may ensue due to various circumstances that happen in the course your chapter 13. Do not risk foreclosure by using the services of an unqualified party to process a chapter 13 case. This process may not be rocket science but they don't award doctorate degrees to lawyers for nothing. The use of unlicensed persons to file a successful chapter 13 case could well prove financially fatal. JUST SAY NO! Now comes the question everyone wants answered. How does this impact my credit? Well, think about it. If you had problems leading to a bankruptcy filing, you more than likely already have negative remarks on your credit file. Bankruptcy is not likely to have a worse impact than that. But in some cases, especially in a chapter 7 bankruptcy, some creditors see you as an enhanced credit risk. After all, they reason, you have eliminated most if not all of your payments to other creditors and having been discharged, those former creditors have no way to collect what you owed them. Your income is, or should be about the same as before, so they my be inclined to take the risk. Chapter 13 however is a different matter. All of your disposable income is devoted to your plan, so the prospect of new credit being extended is dim for at least the time you are bound to the court making payments to your chapter 13 trustee. Space limitations restrict me from giving a complete treatment to this subject, so there will be at least 3 companion articles to be written in the future. The future articles may be accessed at http://www.usa-lawyer-finder.com/artsupp.php . Bruce, Frank and I hope your case proceeds as smooth as glass. Dustin and Frank work with Bruce Nickel, attorney at law in Fresno, California. The firm's practice includes bankruptcy, family law, probate, trusts, wills and other aeas. They may be reached through the firm's website at http://www.usa-lawyer-finder.com/ Read more at: http://www.ArticlePros.com/legal/Bankruptcy/article-279315.html. |
| < Prev | Next > |
|---|