FAQ – Frequently Asked Questions

Below is a list of questions which our clients often ask. For your own education about bankruptcy as pertains to Chapter 13, please feel free to peruse questions from the list below with the corresponding answers further below on this page. If you have a question not answered here, please feel free to email us at info@syndicatelegal.com

1. What’s the difference between Chapter 7 and 13?
2. Can I pick which type of bankruptcy I file?
3. What is the court filing fee for Chapter 13 bankruptcy?
4. Do I have to go to court?
5. What’s the most I can discharge?
6. How does payment work with your law firm?
7. I have not paid my first mortgage in some time and have received a notice of default or foreclosure notice.
Can I still keep my house in a Chapter 13 if I am behind on these payments?
8. I have a second loan / equity line / mortgage on my house. I heard that you can get rid of the second
mortgage in Chapter 13 bankruptcy.
9. I filed a Chapter 7 bankruptcy several years ago, how soon can I file again?
10. Will filing bankruptcy ruin my credit? (Will my credit score go down?)
11. How long will bankruptcy stay on my record (credit reports)?
12. A paralegal / document preparation service made a mess of my paperwork and the trustee told me to make a variety
of changes to my bankruptcy. Can we hire you to fix it?
13. A paralegal / document preparation service prepared my petition but I really want an attorney to be with me
during my hearing. Can we hire you to go?
14. My case got dismissed because I did not take the second mandatory course on time. Do I have to start all over
again?

1. What’s the difference between Chapter 7 and 13?

The chief difference in a Chapter 13 versus a Chapter 7 is that you are setup on a payment plan in which you will be sending money to the Trustee every month which will be redistributed to your creditors.  This does not necessarily mean you will be paying all of your creditors back, but at least a small portion will go to some creditors.  California allows a 0% repayment plan.  Confused?  Give us a call and we can explain this a bit further.

2. Can I pick which type of bankruptcy I file?

Sometimes.  We tell our clients that bankruptcy chooses you, you don’t choose your bankruptcy.  Typically, when your household income is greater than your living expenses (ie. You have money left over each month), you can may be able to qualify for Chapter 13 in which the surplus money goes to your creditors.  Whether you qualify will also depend on your goals, if your have mortgage arrearages, tax debts and other factors too numerous to list.  We will be happy to analyze your case and go over your options with you.

3. What is the court filing fee for Chapter 13 bankruptcy?

The Federal government charges $281 to file a Chapter 13 bankruptcy.  This fee goes to help pay for the trustee assigned to your case, and general court costs.

4. Do I have to go to court?

You DO have to go to a 341A hearing (aka Meeting of Creditors)., and yes, we do go with you to that hearing.  This hearing is not the same as court.  It is an administrative hearing in which an interim trustee (typically another private attorney) interviews you and asks you questions about your paperwork.  Their primary job is to look for assets that can be liquidated for the benefit of creditors.  Our job is to properly exempt and protect your assets.  There are court hearings involved to confirm your case and strip second mortgages, however we handle those parts so you can focus on other things.

5. What’s the most I can discharge?

In a Chapter 13 there are limits to how much debt you can discharge, unlike a Chapter 7 which has no limit.  You can wipe out up to $360,475.00 in unsecured debt (things such as old credit card debt, balances from prior foreclosed properties, medical bills, personal loans etc.).  The limit on secured debts is $1,081,400.00 (secured debts include financed vehicles and real estate you currently own).

6. How does payment work with your law firm?

Unlike a Chapter 7 bankruptcy which requires payment in full prior to filing your case, Chapter 13 allows us to offer you more flexibility.  We can make arrangements for you to pay part of the attorneys fees upfront, and we can amortize receiving the balance of your payments through your Chapter 13 plan, thereby making it hassle free for you.

7. I have not paid my first mortgage in some time and have received a notice of default or foreclosure notice.  Can I still keep my house in a Chapter 13 if I am behind on these payments?

Yes, if you qualify!  Chapter 13 is one of the best legal tools available for people who are behind on their mortgage payments, but wish to keep their house.  By setting you up on a Chapter 13 plan you can continue living in the house and prevent the bank from foreclosing.  Chapter 13 will allow you to catch up on repaying your mortgage back-payments over a 3 to 5 year payment plan.  The lender cannot charge you those ridiculous penalties, legal fees and interest on that arrearage amount either.

8. I have a second loan / equity line / mortgage on my house.  I heard that you can get rid of the second mortgage in Chapter 13 bankruptcy.

Yes, in many cases we can strip the second mortgage off of your residence, however a few factors come into play including the value of your first mortgage, second mortgage/equity line, and current fair market value of your house.  Additionally, this option is available only for your principal residence!  One of the greatest benefits to Chapter 13 is that we can strip off the second mortgage and even third mortgage in many cases such that by the end of your 3 to 5 year plan, there will be gone.  The other great news is that you will also not be obligated to keep paying those additional second mortgage payments while you are in bankruptcy so in many ways it’s similar to a court forced loan modification in a manner of speaking.

Once your case is filed you will have your 341 hearing approximately a month later.  From date of filing to discharge can range from 4 to 6 months although recently our clients have been receiving their discharges closer to the 4 month mark if not even earlier.

9. I filed a Chapter 7 bankruptcy several years ago, how soon can I file again?

You may file a Chapter 7 once every eight years.  You may however file a Chapter 13 sooner if you are getting garnished or have issues with your home that you’d like to save.

10. Will filing bankruptcy ruin my credit? (Will my credit score go down?)

No – quite the opposite!  In most cases, our clients’ FICO scores increase significantly.  Often we by the time someone comes to us their score may be hurting.  We have seen people’s scores increase from as low as 480 all the way up to 620 in just one year BECAUSE they filed bankruptcy.  It may sound counter-intuitive, but in the vast majority of cases, bankruptcy actually improves your score.

11.   How long will bankruptcy stay on my record (credit reports)?

A bankruptcy will remain on your credit report for seven to ten years.  Do not let this scare you however as it will not hinder you from getting new cards, cars, and even home loans (home loans will have to wait for a couple of years).

12.   A paralegal / document preparation service made a mess of my paperwork and the trustee told me to make a variety of changes to my bankruptcy.  Can we hire you to fix it?

We do not fix other company’s work as in many instances it takes more time to fix other people’s mistakes than do it from the start.  If your case was dismissed we will be happy to prepare from scratch and re-file your paperwork properly.

13.   A paralegal / document preparation service prepared my petition but I really want an attorney to be with me during my hearing.  Can we hire you to go?

We can only represent the work that we do in order to maintain our reputation with the courts and trustees.

14.   My case got dismissed because I did not take the second mandatory course on time.  Do I have to start all over again?

Not necessarily (how do you like that for a standard lawyer answer?)  If much time has passed (perhaps several months), you may need to re-file the case again assuming no bar has been places on you.  Otherwise, there are measures we can take to attempt to have your case salvaged and your course filed.