Bankruptcy, Who is Getting Paid, and Urgent Sheet Information

July 29, 2010 - PRLog -- When a Chapter 13 bankruptcy is filed, the Debtor’s first payment is due 30 days after filing. However, the case is not confirmed for at least 3-6 months. The Trustee cannot start paying most of the creditors until the case is confirmed. There are a few exceptions. First, your attorney will get most of his fees before confirmation. Second, a car creditor will get paid a small portion (adequate protection) to compensate for the decline in the value of the car. Mortgage companies do not get paid until after confirmation.

Furthermore, car creditors are usually the first creditor (besides attorney) to get paid off. Again, this is due to the decline in value. This becomes important in a couple of instances. First, if the stay is lifted on the house a Debtor needs to know how much he still owes on the house if he wants to try and work something out with the mortgage company. Another instance, if the case is dismissed and the Debtor wants to re-file his case he needs to know how much he owes from his previous bankruptcy. The amount from the previous bankruptcy not paid plus any amount that has not been paid since filing will need to be listed in the new case. This information will help the attorney give the Debtor good advice and a more accurate Trustee payment.

It is also important to know that the unsecured creditors get paid last in a bankruptcy, if the get paid anything. If a Debtor is making his Trustee payments, but has had a decrease in income and can not longer make the payments it could be important to know who has gotten paid. If all secured debts are paid or almost paid and only unsecured debts will be left, it might be good advice to convert to a Chapter 7 or do a modification to reduce Trustee payment or close the case (if the Debtor has been in the case long enough).

There are many instances when it is important for a Debtor to know who has been paid in order to make fully educated decisions and for the attorney to know who has been paid in order to give good advice.

It comes to a lot of people’s attention that in the bankruptcy areas there is certain information that is just required. I met with a client that’s house is going to be repossessed April 3rd, and when I was going through his information it was not complete. I mean, I know it is only the fourteenth of the month but for a client to pay us the before filing fee, look for the usual information that we asked for. It is not hard if the clients are somewhat organized, but there are a few individuals that throw everything away, and to request all the information from the different places would take a week or so. That is time that our client may not be able to risk. It puts a lot on the shoulders of the people making the urgent calls when no information is provide. My client from earlier may not be able to get me the correct information due to throwing it out all the time, and in speaking with him father I realized that not only are there two places for the mortgage, and one for the vehicle, but another one never mentioned before of an attorneys office for the foreclosure. All contact information is desperately needed for the resolution of contacting and notifying of the bankruptcy. Hopefully he can get it to me sooner than later. I am always willing to go above and beyond with clients just to help them out.

For more information visit http://www.bankrupcy-alternative.com/chapter-13.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10822860-bankruptcy-trustee-payments... and here is another http://www.prlog.org/10822850-bankruptcy-financial-record... for your reading enjoyment.

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