Anthony Landolfi, Esq., P.C.

Your bankruptcy attorney in South Jersey!

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Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is the reorganization chapter of the bankruptcy code typically used for the individual consumer. To be eligible for a Chapter 13 Bankruptcy the individual must have some sort of income and must not exceed debt limits of $1,081,400 in secured debt and $360,475 in unsecured debt. It is also known as the non-liquidation bankruptcy because the Trustee does not sell the Debtor's assets for the benefit of the creditors. However, over the life of the plan, the Debtor will have to pay back some amount of money to some of his or her creditors. The amount paid is typically equal to the amount the creditors would have received had the Debtor filed a Chapter 7 bankruptcy. This is known as liquidation analysis.

A Chapter 13 bankruptcy is very useful for people who:
  • Are behind in their mortgage or rent payments;
  • Have certain taxes or similar type of debts that can't be discharged in Chapter 7;
  • Are behind in their car payments or have an interest rate and/or payment that is too high;
  • Have a suspended drivers license due to insurance surcharges;
  • Have assets that cannot be protected in a Chapter 7 Bankruptcy.
Chapter 13 Process

The process itself is very similar to the Chapter 7 process. The biggest difference is that the debtor, with the help of his or her attorney, proposes a plan to repay certain debts. The entire process starts after extensive information gathering is completed. A document called a Bankruptcy Petition is completed containing detailed information relating to the debtor's income, assets and debts. The debtor eventually reviews and approves of his or her petition by signing it, and immediately thereafter it is electronically filed by the debtor's attorney. 

In the Chapter 13 process, a trustee is designated by the bankruptcy court to review the assets of the debtor.  The trustee determines if all of debtor's disposable income is being applied to creditors. The trustee also determines which assets are exempt or nonexempt property. Exemption of property is restricted to debtor equity in a possession such as a car, home, or life insurance.

Once Chapter 13 bankruptcy protection has been filed by a debtor, all creditor collection activities must cease immediately.  This includes harassing collection letters, phone calls, garnished wages and repossessions. 

The process requires the debtor to provide documentation of the value of all assets as well as a list of all creditors, income and expenses.  This documentation must be completed prior to filing.  The required documentation includes the following items:

  • Pay stubs for the debtor and all household members for the previous six months
  • Copies of all bills and notices
  • Credit report
  • Valuation of all assets
  • Any Child or Spousal Support orders
  • Federal Tax returns for the three years prior to the filing

Credit Counseling

The Bankruptcy Code requires that all debtors (with certain exceptions) complete a credit counseling course prior to filing his or her petition.  Credit counseling is generally simple and fast and typically costs $15 per person or couple. Counseling sessions take about an hour and  the sessions may be done in person or via telephone or internet.  The objective is to assist the debtor in understanding the cause of the financial issues and to develop recommendations for resolution.  As such, the counselor will require income, expense, assets and creditor information.

The credit counseling must be completed prior to filing the petition and a Certificate evidencing same must accompany debtor's petition.

The 341(a) Creditors Meeting

After the debtor's petition is filed with the Court the Court then schedules a 341(a) Creditors Meeting. This hearing is typically scheduled about one month after the filing. The court is responsible to notify all creditors and the debtor of the scheduled meeting. It is unusual for any creditor to appear at the hearing, but they are allowed to attend to ask the debtor questions.

In addition to the documentation for the trustee outlined above, further documentation is required at this meeting:

  • Proof of identification such as a driver's license, passport
  • Proof social security number 
  • Other documentation may include the value of assets and payoff of liens on same 

The meeting itself is generally under a half hour and consists mainly of the trustee reviewing the information previously supplied by the debtor. In the Chapter 13 process an emphasis is placed on the debtors income and monthly budget. Ultimately, the Chapter 13 Trustee makes a determination that debtor's household income, after reasonable expenses, is sufficient to fund the proposed repayment plan. This is also referred to as "feasibility".  By the time the creditor's hearing is held, the debtor should have made at least one payment per his or her plan. If the plan appears feasible, no further documentation is required and there are no objections, the petition proceeds to confirmation.

The Confirmation Hearing 

The confirmation hearing will generally be scheduled approximately 90 days after the petition is filed. While the 341(a) Creditors Meeting will typically take place in a hearing room at the Trustee's office, the Confirmation Hearing will be held in a court room at the Federal Court House. Debtors are not required to attend this hearing. We attend the hearing on behalf of our clients.

Generally, the confirmation hearing consists of the Trustee ascertaining:

    •whether all requested documentation has been supplied
    •whether any/all concerns or objections from the Trustee or creditors have been resolved
    •whether all plan payments have been made by debtor.

If the Trustee is satisfied, she will recommend the debtor's plan be confirmed ("or approved").  Often times the debtor's proposed plan payment, with input from debtor's attorney, will be adjusted up or down. Thereafter, the Court will issue a Confirmation Order


Personal Financial Management Course

The debtor is required to complete a Personal Financial Management Course and file a certification of completion with the court within 45 days after the 341(a), Creditors’ Meeting.

As with the credit-counseling requirement, the debtor must use a court approved counseling agency.  These counseling sessions may also be done in person or via telephone or internet.  This course, like the Credit Counseling, will last approximately one hour.  The objective is to assist the debtor in developing money management skills.

Start the Process Today With Only the Filing Fee 

Bankruptcy protection can be a complicated process. We are here to help. Our experienced team can assist you in navigating the options available to help you resolve your financial issues.

A huge advantage to using our firm is that you can file for bankruptcy protection with only having to pay the filing fee of $310.00. Our legal fee of $3,500.00 can be paid in small payments over the life of your 3 to 5 year plan.  That is, after your bankruptcy is filed, the Trustee will send a portion of your plan payment to my office to be applied toward your legal fee.

Stop creditor harassment and get a fresh start!

Anthony Landolfi, Esq.
295 Bridgeton Pike,
Mantua, New Jersey, 08051
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