Bankruptcy Mandatory Wage Order Directives and Conversion

As of today I have an excessive amount of Chapter 13 plan modifications to prepare and submit for Attorney review & approval. ‘Tis the season for Agreed Orders for mortgage arrears and failure to make timely auto payments.
By: Bankruptcy After Divorce
 
June 28, 2010 - PRLog -- As of today I have an excessive amount of Chapter 13 plan modifications to prepare and submit for Attorney review & approval. ‘Tis the season for Agreed Orders for mortgage arrears and failure to make timely auto payments. Hence, the increase of plan modifications.

There has also been an increased volume of Pre reform law Chapter 13 debtor calls that are upset at the fact that they are required to enter into wage order due the plan modification. Taking the option of “pay or not to pay” away from the debtor leaves them displeased. Chapter 13 debtors must understand that the Wage order directive is in their best interest so they have better chances of completing successful Chapter 13 Discharges.

Chapter 13 debtor’s may feel like they are financially strapped due to the monthly plan payment. They need to understand that this monthly payment is just a small portion of what they were originally responsible for prior to filing bankruptcy. The Chapter 13 bankruptcy filing will only help you if you are willing to help yourself. Breaking the cycle of poor spending habits is difficult for many debtors.

In converting to a Chapter 7, no secured debt can be paid through the plan. The debtor would need to get caught up on their vehicle and house payments, and risk loss of these items if not caught up prior to the discharge of the Chapter 7. This includes the amounts that were to be paid through the Chapter 13 plan. Sometimes vehicles paid within a Chapter 13 Plan can become contractually delinquent due to the way the Trustee disburses funds on these assets. Also, the debtor does not make monthly payments to the Trustee, and the unsecured debt is discharged in a short amount of time – usually three to five months. This means the debtor would be completely out of bankruptcy within three to five months. A Chapter 7 Bankruptcy does not encumber secured assets such as a Debtor’s home and vehicles. This is why it is necessary for the debtor to become current on them, or the creditors are likely to repossess or foreclose on these assets. Also, the debtor would be able to add any additional unsecured debt they may have incurred since their Chapter 13 case was originally filed. The Chapter 7 would also NOT pay for any IRS taxes, Child Support, or Student Loans. The debtor would have to make payment arrangements on these debts should they choose to convert.

For more information visit http://www.bankrupcy-alternative.com/after-divorce.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10764124-bankruptcy-common-mistakes-... for your reading enjoyment.

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