The Oakland County Clerk/Register of Deeds Office welcomed Southfield attorney Altinia Latinis (pictured) of Latinis Fakhouri PLC on Tuesday, Feb. 21, as the first attorney to volunteer for Ask the Lawyer Day.

“People come into our office all day long with basic legal questions,” Clerk/Register of Deeds Bill Bullard explained.

“But though many times our staff knows the answers, they are prohibited from giving legal advice, no matter how mundane or simple it may be.”

Ask the Lawyer Day is the result of a conversation between Bullard and Latinis during her visit to the Register of Deeds office on business.

(Read More @ Legal News Oakland)

ADVANTAGES

Chapter 13 bankruptcy offers individuals a number of advantages over liquidation under Chapter 7 bankruptcy. Perhaps most significantly, Chapter 13 Bankruptcy offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Another advantage of chapter 13 bankruptcy is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the Chapter 13 plan. Doing this may lower payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts.” This provision may protect co-signors.

ELIGIBILITY

An individual cannot file under Chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. In addition, no individual may be a debtor under Chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.

THE PROCESS

A Chapter 13 case begins by filing a petition with the bankruptcy court. The debtor must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; a statement of monthly net income and any anticipated increase in income or expenses after filing. The debtor must provide the Chapter 13 case trustee with a copy of the tax return or transcripts for the last two tax years.
Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. IN a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household’s financial position.
When an individual files a Chapter 13 bankruptcy petition, an impartial trustee is appointed to administer the case. The Chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.
Filing the petition under Chapter 13 places the debtor in an “automatic stay.” This “stay” automatically stops most collection actions against the debtor or the debtor’s property. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names are provided by the debtor.
Chapter 13 bankruptcy also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a “consumer debt” from any individual who is also liable with the filing debtor. Individuals may use a Chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the Chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home of the mortgage company completes the foreclosure sale under state law before the debtor files the Chapter 13 petition.
Approximately 30 to 45 days after the debtor files the Chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer the questions regarding his or her financial affairs and the proposed terms of the plan. If a husband and wife file a joint Chapter 13 petition, they must both attend the creditor’s meeting and answer questions.
After the meeting of creditors, the debtor, the Chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor’s Chapter 13 repayment plan.

THE CHAPTER 13 PLAN AND CONFIRMATION HEARING

Unless the court grants an extension, the debtor must file a repayment plan with the petition or within 14 days after the petition is filed. A plan must be submitted to court approval and must provide for payments to the trustee on a regular basis. The trustee then distributes the funds to creditors according to the terms of the plan.
The plan need not pay unsecured claims in full as long as it provides that the debtor will pay all projected “disposable income” over an applicable commitment period, and as long as unsecured creditors receive at least as much under the plan as they would receive if the debtor’s assets were liquidated under Chapter 7 bankruptcy.
Within 30 days after filing the bankruptcy case, even if the plan has not yet been approved by the court, the debtor must start making plan payments to the trustee.
No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. Creditors will receive 25 days’ notice of the hearing and may object to the confirmation of the plan.
If the court confirms the plan, the Chapter 13 trustee will distribute funds received under the plan as soon as practicable.

MAKING THE CHAPTER 13 PLAN WORK

The provisions of a confirmed plan bind the debtor and each creditor. Once the court confirms the plan, the debtor must make the plan succeed. The debtor must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budged for a prolonged period of time. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor may not incur new debt without permission of the court.
A debtor may make plan payments through payroll deductions. This practice increases the likelihood that payments will be made on time and that the debtor will complete the plan. In any event, if the debtor fails to make the payments due under the confirmed plan, the court may dismiss the case or convert it to a liquidation case under Chapter 7 of the Bankruptcy Code. The court may also dismiss or convert the debtor’s case if the debtor fails to pay any post-filing domestic support obligations (i.e. child support, alimony), or fails to make required tax filings during the case.

DISCHARGE

The discharge releases the debtor from all debts provided by the Chapter 13 plan or disallowed (under section 502), with limited exceptions. Creditors provided for in full or in part under the Chapter 13 plan may no longer initiate or continue any legal or other action against the debtor to collect the discharged obligations.

As a general rule, the discharge releases the debtor from all debts provided for by the plan or disallowed, with the exception of certain debts referenced in 11 U.S.C. §1328. Debts not discharged in Chapter 13 include certain long-term obligations (such as a home mortgage), debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. To the extent that they are not fully paid under the Chapter 13 plan, the debtor will still be responsible for these debts after the bankruptcy case has concluded. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for restitution or damages awarded in a civil case for willful or malicious actions by the debtor that cause personal injury or death to a person will be discharged unless a creditor timely files and prevails in an action to have such debts declared non-dischargeable.