Reorganization of Debts
Filing for bankruptcy is never an easy decision. Rest assured that our San Jose Chapter 13 bankruptcy attorneys will explain the process in detail and make sure you get the personal service you deserve for a reasonable fee. Call us toll free at 1-877-963-9543 to schedule your free consultation with attorneys only. Find out if bankruptcy is right for you circumstances.
There are a number of reasons why reorganizing your debts in a plan of reorganization could put you in the best financial position. Below are links to a few of the most commons reason:
- Get Rid of Underwater Second Mortgage or Equity Line of Credit
- Save Your House From Foreclosure
- Lower Your Car Payment
- Discharge or Payoff Taxes Without Interest or Penalties
- Unsecured Debts With No Interest
Most plans of reorganization for individuals and small business with less than $360,475 in unsecured debts and $1,081,400 in secured debts last between 36 or 60 months. The length of the plan mainly depends upon your gross income and what debts you are reorganizing. Sometimes the most important factor can be the value of your assets as well. During your free consultation we will discuss your income, expenses and assets at length to determine what your best course of action is.
Normally the only appearance in your case you will have to make is at the meeting of the creditors. This meeting is administered by the trustee’s office and also allows your creditors an opportunity to ask questions about the bankruptcy petition filed on your behalf. It usually last around 5 minutes once your case is called. Your first plan payment will be due the month after your case is filed. For example, if your case is filed in June 2011, your first plan payment will be due the following month, July 2011. July 2011 would be the first month of the proposed plan of reorganization.
The plan of reorganization must meet the requirements of 11 U.S.C. Section 1325 to be approved or confirmed by the bankruptcy court. There are two paths to confirmation. Either the trustee’s office recommends confirmation of the plan or a hearing must be held and the court confirms the plan over the objections of the trustee’s or your creditors. Other hearings could take place as well if objections to claims or a hearing on a motion to value and avoid a second mortgage or equity line of credit is required. Your creditors receive notice of the case and then must file a proof of claim detailing the amount you owed the creditor at the time the case was filed. Sometimes there is a dispute as to the amount the creditor claims you owed them and what you believe is accurate. If no agreement can be reached with the creditor the judge assigned to your case will have to decide what is owed after evidence is presented. The same could be true if a motion to value and avoid an underwater second mortgage or equity line of credit is filed in your case. The mortgage holder could object or disagree with the value of your house. If this happens then a hearing would need to be held and the court decide what the value of your house is after evidence is presented.