California Bankruptcy Lawyer Blog

Fremont Bankruptcy Attorney Talks About Chapter 13 Plan Payments

Debtors in a Chapter 13 bankruptcy have agreed to a repayment plan to their creditors. Specifically, in the bankruptcy petition, the debtors propose a Chapter 13 payment plan. The plan will pay off certain secured and priority creditors in full and then, if feasible, unsecured creditors will get none, some or all of their claims paid off. The amount that unsecured creditors receive varies based on the debtors’ income and expenses. This amount is calculated by a formula that was created by the US Government which severely limits the type of expenses that debtors can claim.

Once a plan payment is proposed in the Chapter 13 Bankruptcy Petition, the US Trustee and court must approve it. There are a few levels of review but, ultimately, a plan is approved for a term of either 36 months or 60 months. Once approved, the Debtors are expected to pay this amount each month, on time, in either a cashier check or money order.

If Debtors cannot make the payments make the payments for any reason, it is much better to be proactive than reactive. The Debtors should contact the Trustee’s office by phone or letter to explain why the payment shall be late. Specifically, the Debtors should explicitly outline when the payment will be made or how the late payment will be repaid at a later date. For example, if the payment will be 1 week late, then a phone call and letter stating that it will be 1 week late is acceptable communication. However, if the Debtor needs to miss a month and wants to make up the payment over a series of payments, the US Trustee should contacted and the repayment plan approved. Finally, if the Debtors can no longer make the payments due to a change in circumstances, such as injury or loss of employment, the US Trustee needs to be contacted so that they can consider their options. The options include permanent modification of the plan, conversion to a chapter 7 bankruptcy, or dismissal of the chapter 13 plan all together.

If you have a question regarding your Chapter 13 Plan please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Chapter 13 Bankruptcy

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Sacramento Bankruptcy Attorney Talks About Finishing a Bankruptcy

When a debtor files a Petitioner for Bankruptcy, the US Trustee is now officially the owner of all of the debtor’s assets. The US Trustee is so intertwined with the debtor’s finances that the debtor may not even make a major purchase, such as a new car, without the US Trustee or Court’s permission. This raises the question, once the US Trustee is involved in a debtor’s business, how does one get the US Trustee out?

The real answer is that the US Trustee is involved until the end. The end, in a bankruptcy, is either when the debtor’s bankruptcy case is dismissed or discharged. A dismissal occurs when the debtor’s bankruptcy petition is not granted for various reasons. One reason could be that the debtor voluntarily dismissed because they no longer wanted the bankruptcy. Another reason could be due to noncompliance by the debtor in one shape or form which causes the Court to dismiss the petition. In either case, a dismissal usually means that debtor may refile their bankruptcy petition although a waiting period may be put in place. Once dismissed, the US Trustee no longer has any interest or control over the debtor’s assets.

In a discharge, the Bankruptcy Court makes a final ruling in favor of the debtor and has discharged all remaining debts. For a Chapter 7 bankruptcy, the discharge will occur relatively quickly and can happen within 90 days of the filing. For a Chapter 13 bankruptcy, the discharge is not complete until all the plan payments are done. In either case, once discharged, the US Trustee no longer has any interest or control over the debtor’s assets. That means the debtor is free to go shopping for a new car or sell whatever assets they walk away with.

If you have a question regarding discharge please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee

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San Jose Bankruptcy Attorney Talks About Dismissal

When a debtor files a petition for bankruptcy, the debtor may go for several weeks without hearing anything about their papers. This is typical because once filed, the US Trustee’s office must review the petition for accuracy and completeness and creditors get a chance to object, file proof of claims, or file adversary proceedings. During this time, the debtors can usually voluntarily dismiss their bankruptcy petition.

Why would a debtor dismiss their petition? There can be many reasons. The most common one is that their major creditor, who had previously refused to even to answer phone calls, suddenly has an interest in settling. For example, a mortgage lender who had declared that no relief could be given, may suddenly decide that the debtor’s do qualify for a drop in interest rates or are willing to extend the loan on more favorable terms. Alternatively, a credit card company may decide that they only want half of their bill paid. In those cases, the debtor may not be able to agree to such a deal without first dismissing the bankruptcy.

Another common reason is that the debtor’s situation has changed. For example, the debtors may have lost their job or just had a baby. The debtors may have come into money or found a new job. Either one of these situations may affect their bankruptcy and the debtor may be better served to dismiss their current case so that they may refile later.

Finally, the US Trustee may want the debtors to dismiss their case. The Trustee, upon review of the papers, may believe that the debtors do not qualify for bankruptcy and may file a motion to dismiss. To avoid a court hearing, the debtors may decide to dismiss their petition rather than have a judge decide the outcome.

If you are in the middle of bankruptcy and wish to dismiss so that you can refile, please consider contacting Sagaria Law for a consultation 1-800-941-6730 or www.sagarialaw.com.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Creditors and Debt

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San Jose Bankruptcy Attorney Discusses California’s East Bay, Efforts By Bankruptcy Trustee To Collect Money Angers Creditors

A number of investors who lost money when trusting East Bay investment executive Francis "Bill" Reimers to make investments for them are angered by the decision of a federal trustee to get money from them as part of the bankrupty proceedings involving Reimers and his companies. At least 20 individuals say they collectively lost $10 million dollars in investments because of Reimers. Yet bankrupty trustee John Kendall may have grounds to collect payment from them for the money that Reimers owes because these investors became creditors the moment Reimers filed for bankruptcy. The trustee has claimed in court records that the transfers of money up to one year prior to Reimers filing bankruptcy were "preferential" or "fraudulent."

Attorneys for Kendall have filed complaints asking for a combined total of $5 million from at least 36 parties. 30 of these parties are individual investors. Six of them are companies. The trustee is demanding about $828,000 from one local Benicia investor.The trustee is also demanding $693,000 from American Express Credit, $258,000 from First USA Bank, $58,000 from Bank of America, $16,000 from MBNA America, and $6,200 from Banc One Credit Card.

Reimers had filed for involuntary bankruptcy.

There are three types of trustees in bankruptcy cases.

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Posted In: Bankruptcy Trustee

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