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While Chapter 13 bankruptcy can be a great way to handle unmanageable debt, many people are confused by the process and the roles of their bankruptcy lawyers. If you file for Chapter 13 in San Jose, your bankruptcy attorney will do multiple things to help you with the process and prepare you for both the repayment plan and your life after receiving your discharge. Your attorney will advise you throughout the process and help you complete the necessary paperwork.
Here are 12 ways a bankruptcy attorney assists with a chapter 13 case:
1. Assessing the best strategy to address financial difficulties
When you meet with your bankruptcy attorney at the Shulman Law Office, he will want you to bring in a list of all of your debts and assets. Your lawyer can then analyze the types of debts you owe and their total amounts so that he can determine the most appropriate strategy to address your financial circumstances. The nature of your debts will help to determine whether Chapter 13 is the best option or if you should instead consider filing Chapter 7 bankruptcy.
2. Help you to create a workable budget
If you and your lawyer determine that Chapter 13 bankruptcy is the best option, you will be proposing a repayment plan that will last for three to five years. During this period, you will pay your priority debts and some of your unsecured debts. Having a budget in place can help you make your payments to the bankruptcy court while also meeting your living expenses. Learning to live on a budget can also help you in the future after you have successfully completed your repayment plan and have received a discharge of your remaining debts.
3. Evaluate the validity of secured debts and value them
Secured creditors have security interests in the property secured by their liens. For your secured debts, your attorney will examine them to determine their validity and whether they are avoidable. Your lawyer will also evaluate their value and take any necessary steps to protect your interest. Some liens might be avoidable in Chapter 13 bankruptcy through lien cramdowns or lien stripping.
If you have any secured interests that might be eligible for a cramdown or lien stripping, your attorney might file a motion with the bankruptcy court. For example, if you have owned your vehicle for a long enough period before filing for bankruptcy, your lawyer might be able to secure a lien cramdown in which what you owe is reduced to your car’s value in exchange for you paying the reduced amount in a lump sum. Junior mortgages and liens against your home might also be stripped if you are underwater in your home, rendering them unsecured.
4. Help you create a workable and acceptable repayment plan
Creating a repayment plan for your debts is a central task of Chapter 13 in San Jose. Your attorney will help you draft a Chapter 13 plan that will meet your needs while also being acceptable to the court. In your repayment plan, you must plan to repay your priority debts and demonstrate to the court that you are making your best effort to repay your non-priority unsecured debts. Your attorney can help you understand what must be repaid and how to propose a plan for your non-priority unsecured debts that is more likely to be accepted by the court.
5. Prepare the pleadings and Chapter 13 bankruptcy forms
Filing for Chapter 13 bankruptcy will require you to file multiple forms and pleadings. Your bankruptcy attorney can help by properly drafting all of the required pleadings and forms. This is crucial for helping you to avoid critical errors that could result in problems in your case once your paperwork is filed.
6. Filing the pleadings and Chapter 13 forms with the bankruptcy court
Once you have completed the required pre-filing credit counseling course, and your attorney has drafted all of the relevant forms and pleadings, he will then file them for you with the U.S. Bankruptcy Court together with your certificate of completion of the credit counseling course, your required schedules, and your proposed repayment plan. Filing the petition and supporting documents with the court will then trigger the automatic stay, preventing your creditors from engaging in further collection activities while your bankruptcy case is pending. The automatic stay can offer immediate financial relief by stopping collection lawsuits, garnishments, and other types of collection activities.
7. Attending the required hearings
Several weeks after you file your Chapter 13 bankruptcy case, you and your attorney will be required to attend the 341 meeting of creditors. During this meeting, you will meet with the trustee assigned to your case. Creditors can attend if they choose and question you, but they frequently do not. At the 341 meeting, the trustee will look over your forms, identification, supporting documents, and proposed repayment plan and will ask you questions about them. Your attorney will appear with you at this meeting and help you with answering any questions you might be asked.
Creditors can file objections to your proposed plan by filing an opposition with the bankruptcy court. If a creditor files an opposition with the court, a hearing will be scheduled. At this hearing, your attorney can present arguments about why the court should reject the opposition and confirm your plan.
If no objections are filed, the court will schedule a confirmation hearing. At this hearing, the judge will decide whether or not your plan should be approved. If your plan is confirmed, you will then continue making your payments as called for by your plan for the requisite period.
In addition to the 341 meeting and confirmation hearing, there might be other court hearings scheduled in your case, depending on its complexity. If any other hearings are necessary, your attorney will attend them with you and fight to protect your interests.
8. Help you to secure the court’s approval of your Chapter 13 plan
Your repayment plan is key to your Chapter 13 case. Through your repayment plan, you can make affordable payments to the bankruptcy trustee in your case. If your plan is approved, the trustee will then distribute the payments you make to your creditors. Your plan must provide for full repayment of your priority debts unless a creditor agrees to treat the priority debt differently or you plan to use all of your disposable income to repay your domestic child or spousal support obligations over five years. For your secured debts, your plan must either provide for you to continue making your payments, or you can surrender your secured property. Finally, your plan must show that you are making your best effort to repay your unsecured debts by planning to devote any disposable income you have left after paying for your family’s living expenses. Your attorney can help you create a plan that should both meet your needs while also being acceptable to the court.
9. Review all creditor claims and object to improper claims
After your attorney files your Chapter 13 petition, all of the creditors listed in your schedules will be notified by the bankruptcy court and can file claims. Other creditors might also submit claims in your case. For any claims that are filed, your attorney will carefully review them and file objections to any improper claims that might be filed. He will then attend any hearings scheduled by the court for objections.
10. Make modifications to your plan if needed to deal with changed circumstances
After your plan has been approved, and you have been making your payments as agreed, events might occur that change your circumstances. For example, if you get divorced, have a major vehicle repair, or lose your job, you might have trouble making your Chapter 13 repayment plan payments. In these types of situations, your attorney might suggest that you file a motion asking the court to modify your plan. If your circumstances change before your plan is confirmed, your attorney can file an amended plan with the court to reflect your changed circumstances. If your circumstances change after your plan has been confirmed, your attorney will file a motion to modify your plan to a more affordable payment.
11. Help you overcome legal obstacles during your case
A variety of different legal obstacles might arise during your Chapter 13 case. Whenever you encounter obstacles in your case, your attorney will work hard to help you overcome them so that your Chapter 13 case can be successful.
12. Help you secure a discharge
Once you complete your Chapter 13 repayment plan, your attorney will help you secure a discharge of any remaining unsecured debts. You will then be free of the burdens you previously faced from unmanageable debt and can then move forward with your life with a fresh financial start.
Contact a Chapter 13 attorney in San Jose
If you are struggling under the weight of overwhelming debt and are unsure of what to do, bankruptcy might be the right option. At the Shulman Law Office, our experienced and knowledgeable bankruptcy lawyer can help you to decide the best approach to managing your debt and whether Chapter 13 or Chapter 7 might be a good option. Call us today to schedule a free consultation at 408-297-3333.