Aurora Bankruptcy Lawyer Talks Chapter 13

Once your case is confirmed and you’re making your payment plan, everything proceeds according to schedule until, of course, you do something that is not proper under the Bankruptcy Code.  

First, you might decide that you are not going to make your Chapter 13 trustee payment anymore.  If that were to be the case, then the trustee will bring a motion to dismiss and your case can be dismissed for failure to make payments.  

In addition to the trustee bringing a motion, the mortgage company or other creditor can bring a motion for a modification of the automatic stay or dismissal of your bankruptcy case for failure to make payments pursuant to the plan or failure to make post-petition mortgage payments.  

In the event that one of these motions is brought, you will get a notice, your attorney will get a notice and the case will come before the court for a hearing.  If you can resolve the problem prior to the hearing date, the motion will be withdrawn. If you can come up with a partial payment to cure the default, the mortgage company or the trustee will likely put the case over for two to four weeks in an effort to see if you can cure the default.  If you are not able to cure the default at all on the first court date, then the trustee or the mortgage company will get the relief that they’re looking for because you’re simply not making your payments. 

If you are successful at the end of the three to five year period, you will receive a discharge in Chapter 13 bankruptcy.  At that time, your mortgage arrears will be reinstated, your auto vehicle will be paid in full, and your other creditors will be paid either all or a portion of the debt that was owed.  If you complete your Chapter 13 and pay less than 100 percent back to your unsecured creditors, those creditors are prohibited from seeking any additional dollar amount from you.  You have essentially completed your Chapter 13 case and the creditors got what they were going to get under the Chapter 13 plan and nothing else.  

Your bankruptcy attorney can help you determine approximately how much you’re going to pay back in terms of a percentage to your creditors.  However, don’t be alarmed if the amount you actually pay back to your creditors is more than what you attorney suggested.  In many cases, many creditors do not submit to the court and are not part of the payout.  Thus, the ones that actually do submit to the court and file a proof of claim in the bankruptcy case will get paid a higher percentage.  However, if you look at it in total between the ones that filed a claim and the ones that didn’t file a claim, that’s where you need to look and see what your actual payment was in terms of a percentage.  The key, though, is to get a discharge to save your house and to repay your debts over time.  That is what a successful Chapter 13 bankruptcy allows you to do.