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Chapter 13 Information

Everything about Chapter 13 Bankruptcy on Todd Murphy Law

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Making Chapter 13 Plan Payments

Chapter 13 Plan Payments Are Due

It’s the first of the month immediately following the day your chapter 13 case was filed and it’s time to start making chapter 13 plan payments. Your chapter 13 plan payments are due to the trustee AND your monthly mortgage payment is due to your mortgage servicer. It is very important to make both the mortgage payment and the chapter 13 plan payments on time every month for the life of your chapter 13 bankruptcy case.

If for some reason, and it happens from time-to-time, you are unable to make either or both payments this month, please call me to discuss before you make any decisions. There are certain things to consider if you find yourself in a situation where you have a temporary loss of, or reduction in, income or if you had an unexpected expense recently.

Missing payments can have serious long-term effects on your chapter 13 plan so please avoid this if at all possible. Again, call me to discuss if this comes up for you.

The difference between missing payments before your case is confirmed and after your case is confirmed.

When your case is first filed, the chapter 13 plan that we submit is a “proposed” plan and will be reviewed by your creditors and the trustee before it is accepted and confirmed. During that process, there may be some back and forth between we as your lawyers and the trustee and creditors before the plan is in its final form for confirmation. This back and forth is usually done at confirmation hearings in court. There may be a number of confirmation hearings before the case is confirmed which can take place over a period of three to six months or sometimes more.

Before the case is confirmed and a few days prior to each confirmation hearing, the trustee checks to see that you are up-to-date on your chapter 13 plan payments. If you have not made one or more payments as of the day of the confirmation hearing, the trustee will move to dismiss your case right then and there. There is no separate motion – the case will just be dismissed. This differs significantly from the procedure for a missed payment after confirmation.

What Happens If You Have To Miss A Chapter 13 Plan Payment or a Mortgage Payment Once Your Case is Confirmed?

A missed payment to either the mortgage company or the chapter 13 trustee can have significant negative impacts. If a trustee payment is missed, the trustee may file a motion to dismiss the case. If a mortgage payment is missed, the lender’s counsel may file a motion to lift the automatic stay (which prevents the lender from proceeding with foreclosure) and could lead to a sheriff sale of your home,

In both cases, a formal written response must be filed by us on your behalf and a court appearance is required (lawyers only). The matter is usually resolved at the court appearance where an arrangement is agreed to by the trustee or lender to catch up on payments. Such an arrangement can take many forms but always involves you coming up with some lump sum of money to bring the default current. Adding missed payments to the remaining chapter 13 plan payments is sometimes possible at the discretion of the trustee or lender (or both) and sometimes requires updated documentation on your income and expenses.

Resolution of missed payments often, if not always, includes a 30-day default clause which gives the trustee or lender a great deal of power the next time you miss a payment.

Also, you will be required to pay attorney fees for the lender’s counsel as well as fees to us to file the written response and appear in court on your behalf so this tends to be an expensive event.

Links to Chapter 13 Trustee Websites

Below are links to the bankruptcy trustee website. Each website contains instructions and information for setting up and making monthly trustee payments as well as other important information.

Newark – Marie-Ann Greenberg

Trenton – Albert Russo

Camden – Isabel Balboa

Making Chapter 13 Plan Payments and Mortgage Payments is the Single Most Important Thing During the Chapter 13 Bankruptcy Case.

Both the trustee and the mortgage lender monitor your payments every month and are quick to take action if payments are missed. Sometimes the trustee or counsel for the lender will reach out to me before filing a formal motion, and sometimes they will not. Sometimes, they will overlook one missed payment and sometimes, they will not.

The best strategy for you, of course, is to avoid missing payments but sometimes, we know, it just isn’t possible.

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New laws to address New Jersey Foreclosure Crisis

Governor Phil Murphy signed on April 29, 2019 new laws to address New Jersey foreclosure Crisis. These new laws will help New Jerseyans struggling with the state’s highest-in-the-nation foreclosure rate. The new laws will assist homeowners facing the prospect of foreclosure and pave the way for community revival by addressing blight. Many of the measures were recommended in a September 2018 report by the Special Committee on Residential Foreclosures, which was created by Chief Justice Stuart Rabner.

“The foreclosure crisis has hurt our economy and jeopardized economic security of too many New Jersey families,” said Governor Murphy. “Our communities cannot succeed while vacant or foreclosed homes sit empty or while families live in limbo. I am proud to sign these bills into law today and get New Jersey closer to ending the foreclosure crisis.”

Among the new laws, Governor Murphy signed A664, which codifies the Judiciary’s Foreclosure Mediation Program into law, creating a long-term, permanent program that will not only increase the number of people entering mediation, but also ensure that homeowners receive housing counseling assistance to help provide them with the best possible outcomes in the foreclosure process.

“The foreclosure crisis hit the families of Atlantic County harder than almost any county in the nation. These bills offer a better path for the region and hope for families in despair,” said Special Counsel Jim Johnson. “It’s a vital and important step forward.”

Another important law is S3464 which requires the sheriff to conduct a foreclosure sale within 120 days of the sheriff’s receipt of a writ of execution, instead of scheduling a closing sale within that time frame, as currently provided by the act. The bill also allows the Office of Foreclosure within the Administrative Office of the Courts to issue an order to appoint a Special Master to hold foreclosure sales for one or more properties within a vicinage. The bill also clarifies that, to convey the foreclosed property to the purchaser from the sheriff’s sale, the plaintiff’s attorney is required to prepare, and the sheriff’s office is required to use, the standard form of deed that is set forth in the “Fair Foreclosure Act.”

Perhaps most important, the bill also revises the statute that governs the process for adjournments in connection with sales of real estate by virtue of an execution. The bill provides that a sheriff or other officer conducting the sale may make up to four adjournments, two at the request of the lender and two at the request of the debtor, instead of the total of two adjournments that the statute currently allows. The bill provides that these adjournments shall not exceed 30 calendar days each, instead of the 14 calendar days currently provided for in the statute. As currently provided in the statute, a court of competent jurisdiction may, for cause, make further adjournments.

The Governor signed the following nine bills into law:

  • A664 – Codifies the Judiciary’s Foreclosure Mediation Program; dedicates monies from foreclosure filing fees and fines.
  • A4997 – “Mortgage Servicers Licensing Act.”
  • A4999 – Requires filing of certain creditor contact information with residential mortgage foreclosure complaint and lis pendens.
  • A5001 – Revises statute of limitations for residential mortgage foreclosures.
  • A5002 – Permits certain planned real estate developments to file certain liens; concerns limited priority of certain liens.
  • S3411 – Requires receivership appointment application prior to certain foreclosure actions; requires notice of intention to foreclosure on residential mortgage to be filed within 180 days prior to commencing foreclosure; limits reinstatements of dismissed mortgage foreclosure actions.
  • S3413 – Makes certain changes to summary action foreclosure process under “Fair Foreclosure Act.”
  • S3416 – Clarifies that “New Jersey Residential Mortgage Lending Act” applies to certain out-of-state persons and involved in residential mortgage lending in the State.
  • S3464 – Revises certain procedures for real estate foreclosure sales; alters adjournment of sale process.

The change in the adjournment time from 14 to 30 for each of the two adjournments available to homeowners provides for additional time often vital to helping save their homes at the last minute prior to a sheriff sale.

For more information on adjourning a sheriff sale, see my article How to Stop or Adjourn A Sheriff Sale in New Jersey and for more information and other articles in my sheriff sale series see Sheriff Sale Help.

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How Much Does It Cost To File Bankruptcy?

How much does it cost to file bankruptcy? That’s an important question I get every day.

 Our Fees Are Very Affordable.

Click Here For Our Current Pricing for Chapter 7 and Chapter 13 Bankruptcy.

 What Do We Charge For Chapter 7 Bankruptcy?

We charge a fixed fee for Chapter 7 Bankruptcy which includes all Court costs and expenses. We include the cost of taking the on-line counseling courses and the costs to run a credit report. The fee has to be paid (or all of your payments must be made) before filing your case.  Click Here For Chapter 7 Bankruptcy Cost.

What Do We Charge For Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is quite a bit more work which can go on for months or even years.  But, the good news is—you don’t have to pay the fee in advance. Click Here For Chapter 13  Bankruptcy Cost.

Do you Offer Payment Plans?

Yes we do.  That’s the most common question we get when we are talking to someone about filing bankruptcy.  We understand finding the money to file is one of the biggest problems for most people.  We help by offering payment plans starting for as little as $100.

Where Do I Find The Money?

Most people simply don’t have the money when they need it.  Many times people are still making credit card payments or other payments to accounts that are going to be discharged in bankruptcy.  Once you decide you are going to file, any further money you pay a creditor is wasted money.  You are better off paying that amount toward your payment plan for our fees and put yourself in a position to file as soon as possible.  If you are already not making any payments,  a common approach is to borrow from friends and family at least some of the money to file.

 Recent Changes to the Bankruptcy Laws Made it More Expensive.

Since the Bankruptcy laws were amended in 2005, it has become more expensive to file bankruptcy.  The laws were designed (through extensive lobbying by credit card companies) to make it harder for many to discharge their debts through bankruptcy.

What’s the Average Cost To File Bankruptcy Nationwide?

The average cost to file for Chapter 7 bankruptcy protection, the most common form of consumer bankruptcy, is more than $1,500, according to recent research submitted to the National Bureau of Economic Research.

 How Do I Come Up With The Money To Pay For Bankruptcy?

Many people can stop paying their credit cards once they have made the decision to file bankruptcy.  This often frees up enough money to make payments for the attorney fee and Court costs.  Other people have to rely on friends or family to give them the money.  Still others wait until they receive their tax refund as a way to fund the cost.

The research submitted to the National Bureau of Economic Research, conducted by a group of professors from Columbia University, the University of Chicago and Washington University in St. Louis, examined how bankruptcy filings spiked after people received their tax rebates from previous years.They estimate that another 200,000 consumers, who would otherwise not have enough money to file, will use their tax refunds to pay for bankruptcy this year.

 Too Broke To File Bankruptcy?

In an article on CNNMoney, Jialan Wang, co-author of the report said: “For lots of people, bankruptcy has been taken off the table as an option because of the severe fees involved.”

Among those fees is a charge of about $300 just for filing the paperwork with the federal court, while the rest typically goes to bankruptcy lawyers, said Wang.

And there are other expenses on top of that, including fees for mandatory pre-bankruptcy credit counseling and a pre-discharge debtor education course. These average about $85 altogether, according to a recent study sponsored by the American Bankruptcy Institute.

That means many of the Americans who have seen their debt snowball out of control due to events like job loss, foreclosure or a medical emergency during the economic downturn are now left without their last financial lifeline, she said.

Todd Murphy is a bankruptcy lawyer with offices in Bedminster, NJ.  Call now! 862-217-2361

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Chapter 13

Avoid Foreclosure and protect other assets

If you own a home, condo, automobile, or other valuable property, you may want to file for Chapter 13 bankruptcy to protect your assets.

At Todd Murphy Law, we will help you find the right debt solution.

Contact an experienced Chapter 13 Bankruptcy Lawyer if:

  • you want to eliminate taxes owed to the IRS or the state of New Jersey and/or repay taxes without further penalties or interest
  • you want to protect your home from foreclosure
  • you want to recover from debt but want to protect your home
  • you have valuable assets you do not want to liquidate to pay off your debts
  • you want debt consolidation and reduction of your monthly payments
  • you want to prevent repossession or regain possession of your automobile that was recently repossessed
  • you want to eliminate a second or third mortgage
  • you cannot qualify to file a Chapter 7 Bankruptcy

Under a Chapter 13 bankruptcy, you can file a debt reorganization plan to pay back your debt with reasonable payments over the course of three to five years. In this way, you can protect your assets, including your car and home, while repaying your debt, because your assets are not liquidated to pay the debt. Under certain circumstances you may be able to eliminate second or third mortgages.

Restore Your Credit Through Chapter 13 Bankruptcy

Many people think that if they file for bankruptcy, they will be unable to buy a home. Once your debt is removed and you have the opportunity to rebuild your credit score, you will be eligible for several loan types. However, if you do not file, your debt will continue to accumulate, and it is unlikely you will be able to obtain a loan. Work with Todd Murphy Law to file for bankruptcy today! Start fresh so that you can start to rebuild your credit!

call 800-285-1925 for more information and to schedule a free consultation today.