Prior to filing your case with the Court, you will be required to take a Credit Counseling class and receive a Certificate certifying that the course has been completed. Without this Certificate, your case cannot be filed. This course can be completed online or by telephone at your convenience. The Law Office of Susan E. Rizos, refers all of our clients to the Institute for Financial Literacy which is an approved credit counseling agency. However, you are not obligated to use this company.  You may use any company - as long as they are approved.  As the date for filing your case approaches, we will contact you about completing this necessary step.

Before your case is filed, attorney Susan E. Rizos will calculate the amount of money, called your Plan payment, which you will need to pay each month during your Chapter 13 case. A Plan can continue for as long as sixty months depending on the amount of debt to be repaid as well as other factors. The formula for determining your Plan payment and the amount of debt you must repay revolves around the Means Test calculations, your budget, the value of your assets and several other factors. This formula is complex and is case specific.

In general, however, you must pay all of your secured debts if you are retaining the collateral pledged to get the loan, all priority debts and a portion of your unsecured debts equal to either your disposable income as determined by the Means Test or the unexempt amount of your assets - which ever is greater. In any event, however, your unsecured creditors (i.e. credit cards) will be paid off without interest, late fees, finance charges or over the limit fees.  Your bankruptcy attorney will go into more detail about how your Plan payment is determined.

Your Plan payment will be paid to your case Trustee who will then distribute the money to your creditors on a monthly basis. In addition to making your monthly Plan payment, you must resume (or continue if you are not behind) making payments on secured loans such as mortgages, car loans and leases upon the filing of your case. In addition, you must make all of your real estate tax payments, water bill payments, utility bill payments and other living expense payments each month just as you would have prior to the case filing.

It is possible to have an income deduction so that your Plan payment will be made automatically for you thus ensuring your case will never be dismissed for non payment. Most debtors, however, simply make the payment by check or money order directly to the Trustee.

Approximately a month after your case is filed, your first Court appearance, known as the Meeting of Creditors will take place. If you reside in Brooklyn, Queens or Staten Island, this appearance will be held in downtown Brooklyn. If you reside in the Bronx or in Manhattan, this appearance will be in lower Manhattan.

At that appearance, the Trustee (an experienced bankruptcy attorney appointed by the Department of Justice), assigned by the Court to your case will question you under oath about the information contained in your bankruptcy papers. He or she will review your Means Test and budget along with your pay stubs and tax returns very carefully. The Trustee will want to make sure that your creditors are being paid enough and that your Plan is viable. Creditors have the right to appear and ask questions, but usually do not. By the date of this hearing, you should have made your first payment to the Trustee and your first post-petition regular payment on each of your mortgages.

About three months after your case is filed, the second hearing, called a Confirmation Hearing, is held where you will appear before the Judge. If you have made all of the necessary payments to that point and followed the other requirements, the Trustee will recommend confirmation of the Plan we proposed when your case was filed. After confirmation, you will not be required to appear in Court again. You will continue making payments as provided for in your Plan until you have made your final payment.

During this period of time, you will need to complete a second credit course called Debtor Education or Financial Management. Again, this course must be given by an accredited agency and the Certificate must be received and filed with the Court in order for you to receive your discharge. The Institute for Financial Literacy offers this course to our clients online and by telephone for your convenience.

After all of your Plan payments are made and your Debtor Education Certificate is filed, you will receive in the mail a document entitled "Discharge of Debtor." The Discharge means that any debts which were not scheduled to be paid in the Plan as well as any claims of creditors who were listed but who did not file with the Court to receive a payment, will be discharged - you will no longer be obligated to pay these debts.

The key to a successful Chapter 13 is that you make all payments to the Trustee and to your secured creditors on time. If you don't make scheduled payments to the Trustee, he will ask the Court to dismiss your case. If you don't make payments to secured creditors, they will ask the Court for permission to continue foreclosure or other collection actions to take your property away. Any of these actions will also cause you to incur additional legal fees as well.

The legal fee you pay to the Law Office of Susan E. Rizos, includes all meetings and calls with you to obtain the necessary information to file your case, the filing of your papers with the Court, appearing with you at the first Meeting of Creditors and at the Confirmation Hearing, notifying you of any Motions filed in your case, reminding you of Court appearances, reminding you to do your credit counseling, arranging for the credit counseling and debtor education and advising you of your Discharge. As long as you make all scheduled payments to the Trustee and your secured creditors, provide our office will all requested information and truthfully answer all questions and submit accurate documentation, the Law Office of Susan E. Rizos will make sure your bankruptcy is successfully completed.  Also, you can pay a portion of your legal fee through your Plan.

A Chapter 13 bankruptcy stays on your credit report for six years. From the moment your case is filed, you will be able to start rebuilding your credit. With Court approval, you can get a mortgage for a new home, under certain lending programs, after only one year, if you are making your plan payments on time. If you decide to sell your home, you may do so, with the Trustee's cooperation, provided you pay off the balance due under your Plan, at the closing.

Legal fees for a Chapter 13 vary depending on the complexity of the case.  However, a significant portion of the fee can be paid through your Chapter 13 Plan.  In addition to legal fees, you will incur a Court filing fee of $274.00 as well as the fee for the two credit classes which is $50.00 per household per class. 

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