Chapter 13 Bankruptcy Attorney Seattle

Chapter 13 Plan & Confirmation Hearing

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Law Offices of Mark McClure
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Chapter 13 Plan & Confirmation Hearing

The debtor is required to file a repayment arrangement with the completed petition or no later than 14 days after the petition is filed. An arrangement must allow for fixed amount payments to the trustee on a consistent basis and submitted for court approval. Arrangements typically divide payment schedules into biweekly or monthly installments. Trustees will then disperse funds to creditors as stated in the arrangement. The terms of the arrangement may call for offering creditors less than payment in its entirety claims.

The three types of claims are as followed: secured, unsecured and priority. Secured claims are claims that allow the creditor the right to take back outlined property, such as collateral, if the debtor will not pay underlying debt. Unsecured claims, however, are those that do not allow the creditor special rights to collect against certain property belonging to the debtor. Priority claims are claims that bankruptcy law grants special status. The cost of bankruptcy proceedings and most taxes fall under this category.

With the exception that a certain priority creditor approves of different claim treatment or is objecting to the case of a domestic support obligation, the arrangement is required to pay priority claims in its entirety. The exception is if the debtor agrees to move all "disposable income" to a five-year arrangement. This situation is discussed below.

In the case where the debtor would like to keep the collateral to secure a certain claim, the arrangement will require that the secured claim holding collect at least the collateral value. Underlying obligations used to buy the collateral such as a car loan will require the arrangement to provide payment in its entirety of the debt instead of solely the value of the collateral granted that the debt was created within a particular frame of time prior to bankruptcy filings. This amount may be less due to depreciation. Certain secured creditors such as the home mortgage lender may allow payments to be made during the original loan repayment schedule as long as any arrearage is created during the formation of the arrangement. This payment schedule may turn out to be longer than the arrangement. The debtor is strongly suggested to seek advice from an attorney in order to assess the right treatment of the arrangement's secured claims.

The arrangement does not need to pay for unsecured claims in entirety grated that it allows the debtor to pay all estimated "disposable income" over an "applicable commitment period,". Another requirement is that the unsecured creditors are granted at least the amount under the proposed arrangement as the creditors would be granted if the debtor's assets had liquidated under chapter 7 bankruptcy. Chapter 13's "disposable income" is defined as income less amounts generally required for the continuation or sustenance of the debtor or dependents along with up to 15% of the debtor's gross income of charitable incomes. The exception is child support payments accepted by the debtor. In the case the debtor manages a business, disposable income will exclude amounts required for commonplace operating expenses. "Applicable commitment period" is dependent on the debtor's present income per month. If the current monthly income is a smaller amount than the state median amount for the same family size, the applicable commitment period will be three years. The applicable commitment period will be five years if the present income per month is a larger amount than that retaining to a family of the same size. The total span of the arrangement might be less than the applicable commitment period of three or five years only if unsecured debt is paid in its entirety during a shorter length of time.

The debtor is required to start paying arrangement installments to the trustee within 30 days subsequent to filing the bankruptcy case. This requirement applies even in the case the arrangement has not been approved by court. In the case that lease payments or secured loan payments are due before the debtor's arrangement is established, the debtor is required to pay sufficient protection payments to the lesser or secured lender directly. This process would deduct the sum paid from the sum that would have been compensated to the trustee. Such payments include those regarding home and automobile.

The bankruptcy judge will host a confirmation hearing and come to a decision on whether the proposed arrangement is sufficient and aligns with the standards for verification advised in the Bankruptcy Code within 45 days after the meeting of creditors. Creditors receive 28 days' notice of the hearing from the court and have the ability to disagree to confirmation. Keeping in mind that a assortment of protests may be voiced, the most reoccurring objections criticize that the arrangement payments are of a lesser amount than creditors would be granted should the debtor's assets have liquidated. Another reoccurring objection is that all of the debtor's projected disposable income for the applicable commitment period has not been reflected in the proposed arrangement.

Chapter 13 trustee will disperse funds as outlined the arrangement "as soon as is practicable." should the court confirms said arrangement. If the court refused to validate the arrangement, the debtor is allowed to file a revised arrangement. The debtor is also permitted to alter the case to be a categorized under liquidation case described in chapter 7. In the case the court refuses to authorize the arrangement or the revised arrangement in favor of dismissing the case, the court may choose to approve the funds for costs to be kept by the trustee with the condition that the trustee is required to return the remaining funds to the debtor The trustee is not required to return the funds that had already been disbursed or payable to creditors.

Seldom, a variance in circumstances may have the ability to compromise the debtor's capability to pay arrangement installments. There are instances where a creditor will dismiss a arrangement, threaten to protest a arrangement, or the debtor failed to list all creditors for one reason or another. As a result, the arrangement might have to be modified regardless of whether the modification occurs before or after confirmation. Alteration subsequent to confirmation is not solely limited to a proposal by the debtor, but may be at the appeal of an unsecured creditor or a trustee.

Chapter 13 Background Chapter 13 Background
A Chapter 13 bankruptcy enables individuals to develop a plan to repay all or part of their debts
Advantages of Chapter 13 Advantages of a Chapter 13 Bankruptcy
A Chapter 13 bankruptcy can help you save your homes. Stop foreclosure proceedings and keep your home.
Chapter 13 Eligibility Chapter 13 Eligibility
Any individual is eligible width unsecured debts less than $383,175 and/or secured debt up to $1,149,525
How Chapter 13 Works How a Chapter 13 Bankruptcy Works
We start with making a list of all your assets and liabilities. Your income and expenses
Making the Plan Work Making the Plan Work
Simply make regular payments, adjust your lifestyle to live with a lowered income.
Chapter 13 Discharge Chapter 13 Discharge
When you complet of all payments of plan and completed an approved course in financial management...
Chapter 13 Hardship Discharge Chapter 13 Hardship Discharge
If circumstances arise that prevent you from completing the plan. You may ask the court to grant a "hardship discharge."


© 2014 Law Office of Mark McClure ★ info@chapter13seattle.comChapter 13 Seattle
1200 Westlake Ave N #1006, Seattle, WA 98109 ★ Phone: (206) 789-8751