9 Tips For A Successful Chapter 13

Over the past year or so, Florida has seen a glut of foreclosure filings, many times involving mortgagees that are simply not willing to bend to do what really needs to be done to keep you in your house. This has funneled homeowners either into surrendering their house and filing a Chapter 7 bankruptcy, or for those with regular income wanting to keep their house, into a Chapter 13 bankruptcy. Also, those with regular incomes, two or more mortgages, with house values that are less than the principle balance of their first mortgage, Chapter 13 may allow one or more mortgages to be eligible for a cram-down.

Recently, bankruptcy filings have fallen off. Maybe the economy is starting to do better. Maybe its just the time of the year, as bankruptcies typically fall off during certain months of the year anyway. There is talk of a second dip in the economy, which may lead to more reductions in pay to the employed, and more businesses closing, leaving more people out of work.

For those wishing to try to keep their home by filing a Chapter 13 bankruptcy, this blog is for you. Hopefully the following tips you will find useful, and lead to a successful completion of your bankruptcy.

1. Preparation. Success with a Chapter 13 takes planning, as they are not cookie cutter events. Every Chapter 13 bankruptcy is unique. There is a lot of information on the internet about not only Chapter 13 bankruptcies, but debt relief in general. An excellent source of information about Chapter 13 bankruptcies can be found at the www.uscourts.gov. Doing your homework before proceeding to an attorney's office can greatly enhance your chances of making correct decisions towards the planning and implementation of your bankruptcy. These decisions can have a direct impact on your chances of successfully completing the bankruptcy, and your quality of life during your bankruptcy, which typically last from 3 to 5 years.
2. Budget. Budget. Budget. Your bankruptcy is centered around your living expenses, and your living expenses may help determine whether a Chapter 13 bankruptcy is feasible. One of the problems people run into when filing bankruptcy is having not properly accounted for all necessary living expenses at the outset. This will determine how much money you will be able to repay, and your realistic expectations of success in the bankruptcy.
   

   
3. Payroll Deductions. During your Chapter 13 bankruptcy, depending on the jurisdiction you are filing in, you may need to turn over your tax refund money to the Trustee. If you plan ahead of time, you can hopefully minimize any tax refund, thereby putting more money into your pay check. One major change you will experience is that you will not have the advantage of being able to depend on receiving a tax refund during the bankruptcy.
4. Organize Documents. Your attorney will be asking for a lot of documents. Some attorneys place this list on their website, while others have the list in their office. A typical list will include deeds, mortgages, vehicle titles or registration, pay advices for 7 months, financial accounts for 7 months, 12 months evidence of any cash advances, and 4 years of tax returns. Should you not have your tax returns, you should be able to order a transcript by filing out Form 4506-T. You will also need payoff figures for all secured debts, together with how many payments you have left if less than 5 years.
5. Don't Hide Anything. As long as your attorney knows of everything about your assets, transactions, debts, income, and expenses, he or she should be able to plan accordingly. I have run into horror stories that have ended up costing my clients a lot of money because of either hiding things or misstating the truth. If your attorney doesn't know the truth, he or she may not be able to help you when things start heading South.
6. Arrange Filing Date With Your Finances. There is a 14 day window in which to file your Plan after the filing of the bankruptcy. The Plan is a document, after approved by the Court through a process called Confirmation, that outlines what moneys will be paid to the Trustee, and how the Trustee will distribute the funds. The initial payment is due 30 days after filing.
7. Pay Without Receiving Bill. When you file bankruptcy, because of something called an Automatic Stay, you will probably stop receiving bills for things you are accustom to paying only after receiving a bill. For example, if you normally receive a statement on leased property, and then send in your payment, you should contact the leasing company and find out where to send the payment while in bankruptcy, and mail it in. Why does the company stop sending statements? They are afraid this could be construed as a collection effort, which has consequences while in bankruptcy with the automatic stay in place. Also, according to your plan, there are some payments that you may be making directly to a creditor. Make sure the payments are timely made.
8. Miss Work!. OK, that's a little strong. But you will have to attend a meeting with your attorney and the trustee after filing. It typically takes about 5 minutes, and is assigned to a 30 minute time slot, along with some other bankruptcy filers. You will receive the date and time of this meeting shortly after filing, and is referred to as a 341 Meeting or Meeting of Creditors. I really don't like the name Meeting of Creditors because, while creditors can attend, it is unusual. A more descriptive name would be something like Meeting With Trustee. Along with the notice containing the date and time of the 341 Meeting will be a time and date for a Confirmation Hearing. Check with your attorney to see if you.
9. Discipline. That's right, now for the hard stuff, unless you are disciplined to stick with the Plan, and a budget according to the papers filed with the Court. The more disciplined you are, the easier it will be. Few people find it easy to successfully complete a Chapter 13 Plan and receive a Discharge. Should things not go as planned, get with your attorney right away, as there may be things he or she can do through the Trustee or the Court to increase your chances of success considering your new circumstances.

Middle District of Florida Chapter 7 Trustees

Florida Chapter 7 Trustees

Note: The individuals listed are private parties, not government employees.  Last updated 8/1/2020

This color = Jacksonville Division

TRUSTEES COVERING THE MIDDLE DISTRICT OF FLORIDA

Doreen R. Abbott

P.O. Box 56257

Jacksonville, FL 32241 -6257

E-mail: dabbott@epiqtrustee.com

Phone: (904)886-9459   
 

Robert Altman

P.O. Box 922

Palatka, FL 32178 -0922

E-mail: robertaltman@bellsouth.net

Phone: (386)325-4691

Fax: (386)325-9765   
 

Gregory L. Atwater

P.O. Box 1815

Orange Park, FL 32073

E-mail: ath20@netmail.att.net

Phone: (904)264-2273   
 

Aaron R. Cohen

P.O. Box 4218

Jacksonville, FL 32202

E-mail: acohen60@bellsouth.net

Phone: 904-389-7277   
 

Gregory K. Crews

8584 Arlington Expressway

Jacksonville, FL 32211

Phone: (904)354-1750   
 

Gordon P. Jones

P.O. Box 600459

Jacksonville, FL 32260 -0459

E-mail: gjones@epitrustee.com

Phone: (904)262-7373   
 

Alexander G. Smith

2601 University Blvd., West

Jacksonville, FL 32217 -2212

Phone: (904)733-2000

Nicole Marie Cameron 235 Apollo Beach Blvd., #231 Apollo Beach, FL 33572 E-mail: trustee@tampabay.rr.com Phone: (813) 645-8787

Dawn A. Carapella P.O. Box 67 Valrico, FL 33595 -0067 E-mail: dcarapellatrustee@gmail.com Phone: (813) 685-8694

Gene T. Chambers P.O. Box 533987 Orlando, FL 32853 -3987 E-mail: gchamberspa@cfl.rr.com Phone: (407)872-7575

Carolyn R. Chaney P.O. Box 530248 St. Petersburg, FL 33747 -0248 E-mail: carolyn.chaney@earthlink.net Phone: (727)864-9851

Richard Michael Dauval P.O. Box 13607 St. Petersburg, FL 33733 -3607 E-mail: rdauval@leavenlaw.com Phone: (727) 362-9003 Fax: (727) 327-3305

Marie E. Henkel 3560 S. Magnolia Avenue Orlando, FL 32806 Phone: (407)438-6738

Christine L. Herendeen P.O. Box 152348 Tampa, FL 33684 E-mail: clherendeen@herendeenlaw.com Phone: (813) 438-3833

Larry S. Hyman P.O. Box 18614 Tampa, FL 33679 E-mail: larry@larryhymancpa.com Phone: (813)875-2701

Dennis D. Kennedy P.O. Box 541848 Merritt Island, FL 32954 E-mail: dan@ddkennedy.com Phone: (321) 455-9744 Fax: (321) 445-9888

Arvind Mahendru 5703 Red Bug Lake Rd. #284 Winter Springs, FL 32708 Phone: (407) 504-2462

Stephen L. Meininger 707 North Franklin Street Suite 850 Tampa, FL 33602 E-mail: slmeininger@earthlink.net Phone: (813)301-1025 Fax: (813)307-0879

Douglas N. Menchise 2963 Gulf to Bay Blvd, STE. 300 Clearwater, FL 33759 E-mail: dmenchise@verizon.net Phone: (727) 797-8384 Fax: (727) 797-8019

Carla P. Musselman 1619 Druid Road Maitland, FL 32751 Phone: (407)657-4951 Fax: (407)644-4306

Emerson C. Noble P.O. Box 622798 Oviedo, FL 32762 -2798 E-mail: trusteenoble@outlook.com Phone: (407) 628-9300

Lori Patton P.O. Box 520547 Longwood, FL 32752 E-mail: trustee@trusteepatton.com Phone: (407) 937-0936

Luis E. Rivera, II P.O. Box 1026 Fort Myers, FL 33902 -0280 E-mail: trustee.rivera@gray-robinson.com Phone: (239) 254-8466 Fax: (239) 321-5334

Beth Ann Scharrer P.O. Box 4550 Seminole, FL 33775 E-mail: BScharrerTrustee@gmail.com Phone: (727)392-8031

Traci K. Stevenson P.O. Box 86690 Madeira Beach, FL 33738 E-mail: tracikstevenson@gmail.com Phone: (727)397-4838

Robert E. Tardif, Jr. P.O. Box 2140 Fort Myers, FL 33902 E-mail: rtardif@comcast.net Phone: (239)362-2755 Fax: (239)362-2756

Robert E. Thomas P.O. 5075 Winter Park, FL 32793 E-mail: rthomastrustee@gmail.com Phone: (407)677-5651

Richard B. Webber, II P.O. Box 3000 Orlando, FL 32802 E-mail: rwebber@zkslawfirm.com Phone: (407) 425-7010

Angela Welch 12157 W. Linebaugh Avenue #401 PMB 401 Tampa, FL 33626 E-mail: welchtrustee@gmail.com Phone: (813)814-0836

Will I Lose My Rental Property If I File Bankruptcy?

The real answer is, it depends. Many factors have to be considered, including whether you file a Chapter 7 or Chapter 13 bankruptcy, how much money you owe on the property, and what is the property worth.

I recently spoke with a client that was told by another attorney, during a 15 minute consultation, that he would lose his rental property if he filed bankruptcy. After all, people assume they will lose everything when they file bankruptcy anyway.  If the property is turned over to the bankruptcy estate and liquidated, then it is expected. But what if the attorney is wrong, and the debtor is able to keep the house. Well, maybe the attorney is then viewed as a hero. My point is, during a consult, it is always easy, and safe, for an attorney to simply say you will lose the property.  But such is not necessarily always the case.

CHAPTER 7

First, lets take a look at a Chapter 7 bankruptcy. When you file a Chapter 7 in Florida, there a federal and state exemptions that determine what you can keep, and what will become property of the bankruptcy estate and liquidated. This will vary from state to state. For example, in Florida, one gets an unlimited homestead exemption, whereas most states limit their homestead exemption; this refers to the amount of equity you can have in your home that is exempt from being able to be administered by the Trustee. Unfortunately, this does not apply to rental property. There may be some statutory exemptions that can cover some of the equity in the rental property to make it feasible for the debtor to keep the property. Of course, if there is no equity in the property, it would be highly unusual that the trustee would want the property. The trustee will only sell property if the trustee can obtain a net gain, thereby allowing for a distribution of funds to unsecured creditors.

For example, if a rental house with a market value of $100,000 had a mortgage with a principal balance of $97,500, and it would cost the trustee $3,000 to sell the property, the net after sale would be $97,000. This is not enough to cover the mortgage. The trustee would only sell the property if there is going to be money left over to send to creditors. So, in practice, there needs to be more than just minimal equity in the proeprty.

CHAPTER 13

Now lets look at a Chapter 13. Usually, its you can keep your property in a Chapter 13, including rental property. However, there are other considerations we must look at. For example, the property could be eligible for a cramdown. That is, the mortgage could be modified, bringing the balance owed down to the value of the property, and interest modified to be something above prime, with the acceptable interest rate often either determined by agreement of the parties, or determined by the Court. This could have the effect of lowering the monthly mortgage payment, which could have an impact on whether it is feasible to keep the property. One can do a cramdown on many types of secured property, including rental property, but not your homestead.

But, this is far from the only consideration as to whether you will be able to keep the property in a Chapter 13. The trustee will most likely look at whether you will receive a net profit from the property. If not, then the Trustee will probably take the position that the property is not necessary for the debtor to complete the Chapter 13, and ask for the property to be liquidated. The trustee doesn't want the debtor to keep the property if it is shown it will have a net negative cash flow, as this diminish the debtor's disposable income, thereby diminishing the amount of money the debtor could send to the Trustee.

Determining whether or not rental property can be kept when filing bankruptcy has to be determined on a case by case basis. If you have any questions about your particular situation involving rental property, you should consult with a local bankruptcy attorney that will give you the time to properly advise you as to your options.

Countrywide Financial May Be Considering Bankruptcy

Bloomberg recently reported Bank of America Corp (BAC) insiders have leaked the bank might consider filing bankruptcy for its Countrywide Financial Corp. unit should the litigation cost threaten to cripple the parent organization, BAC.

BAC is based in Charlotte, North Carolina, and after acquiring Countrywide Financial Corp., has maintained the acquisition as a separate entity. Apparently, Countrywide has sold faulty loans, for which they have been sued. An analyst with Credit Agricole Securities USA has booked at least $30 billion of cost for faulty home loans, most of which were sold by Countrywide.

Back in 2007, Countrywide was the largest mortgage originator in the United States, with 17 percent of the market. It is questioned as to whether Bank of America has enough reserves to pay claims. One of the claims were filed by the Federal Housing Finance Agency, which sued BAC and 16 other banks to recover $200 billion in mortgage-backed securities sold to Fannie Mae and Freddie Mac (the article list as Freddie Mae).

Countrywide has $11 billion in assets that could be depleted through demands to repurchase defective mortgages.

You can find the entire article at http://www.bloomberg.com/news/2011-09-16/bofa-said-to-keep-bankruptcy-as-option-for-countrywide-unit.html?cmpid=bit