Learn About The Chapter 13 Relief Plan For Debt Consolidation
Lawrenceville Chapter 13 Bankruptcy Petition Attorneys
A Chapter 13 bankruptcy is a commitment. In exchange for immediate protection from creditors and partial discharge of your debts, you will make monthly payments for 36 months (three years) to 60 months (five years).
It is important to work with an experienced bankruptcy lawyer who can stand up for your interests to ensure your Chapter 13 bankruptcy is properly prepared and that you can realistically afford the payments. Founding attorney Jerry Daniels brings 32 years of experience in helping individuals and families in Gwinnett County and Walton County, Georgia.
Funding Your Chapter 13 Plan
Chapter 13 provides relief to those who earn too much for a Chapter 7 discharge of debts, or who cannot file Chapter 7 because of mortgage arrears, nonexempt assets or other reasons.
The heart of a Chapter 13 bankruptcy is the funding of the plan. Simply put, the funding of the plan is paying money to the Chapter 13 trustee and he in turn pays those creditors designated in the plan to receive that money. The plan is in a form required by the court and it contains important information on how you are going pay certain creditors and whether or not you intend to surrender or keep certain secured debts. The plan also sets out in detail the way in which your attorney is to be paid.
The plan must be funded (payment made to the trustee) within 30 days of filing of your Chapter 13 petition with the court and each 30 days thereafter. There are basically two ways in which the plan will be funded. You pay the trustee directly from your earnings or your employer withholds the money from your paycheck and sends it to the trustee. Direct payment to the trustee is very seldom approved by the courts in the Middle and Northern Districts of Georgia; therefore, the most probable method of trustee payment is by employee deduction order (EDO).
More than likely, your first plan payment will become due (payment due within 30 days of the filing of the bankruptcy petition) before the EDO can be served on your employer and money withheld from your paycheck; therefore, you will be required to make the payments directly to the trustee until your employer starts withholding the plan payment funds. It is very strongly suggested you make a partial payment each payday in order that you may budget your money easily. You may pay the trustee by personal check, money order, bank check or postal money order. Be warned: If you pay by personal check and the check bounces, the trustee will no longer accept personal checks from you, and you will be required to make payment by one of the other methods. Additionally, if a payment check bounces, your plan may no longer be workable, causing serious problems that may lead to dismissal of your case.
We suggest you do not purchase those cheap money orders from the convenience stores as it is very difficult to have the money order traced in the event the trustee claims he or she has not received your payment. It is important to remember to keep copies of all documents relating to any plan payment.
You may stop making payments to the trustee when your employer starts taking money from your paycheck to fund the plan. You should inspect your pay stub carefully each pay period to determine whether or not your employer has started taking out the plan payment. If your employer has not started taking out your plan payment after the EDO is served on them, you should contact the payroll department to find out why they are not withholding the money. If your employer refuses to withhold the money for the Chapter 13 plan, you must continue to pay the trustee directly. In any event, you need to inform your attorney immediately upon determining your employer is not going to withhold the plan payment from your paycheck. Be prepared to provide your attorney with the name and phone number of the contact person in your employer's payroll department. In order to eliminate communication errors, we very much prefer you provide the employer contact information in writing, either by e-mail, letter of fax.
The Length of a Chapter 13 Plan
If you plan on paying all of your creditors all of the money you owe them, the plan length will be determined by the amount you owe them, plus your attorney's fees to be paid in the plan and the trustee's fees, divided by your monthly plan payment. If you propose to pay any of your creditors less than you owe, your plan must be no shorter than 36 months. In either event, your plan can last no longer than 60 months. Our bankruptcy attorney will go over your plan thoroughly before filing it. We work to ensure that your payment is realistic and that you have some leeway for unforeseen expenses. It is important to keep in mind the length of your plan is subject to a number of things including the amounts of the creditor's claims; therefore, it may become necessary to recalculate the number of months required to complete your plan once all claims have been filed with the court.
Lawrenceville Consumer Bankruptcy Lawyers
From our office in Lawrenceville, our lawyers represent clients in communities throughout Gwinnett County and Walton County, Georgia. Call us toll free at 866-464-2980 or contact us by email to arrange a free consultation with one of our experienced Lawrenceville Chapter 13 relief lawyers today. At your first meeting, we will determine if you should file for bankruptcy and what information you will need to get started.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
By Tony Taylor