How You Can Improve Your Chances for Success When You File Chapter 13

Because Chapter 13 cases last a minimum of 3 years, my clients and I must have a solid working relationship and a clear understanding of each other’s responsibilities if our Chapter 13 debt reorganization plan is to be successful and result in a Order discharging all debts.

As the attorney, my responsibilities are well known to me - including the careful and thorough collection of all relevant financial information, preparation and filing of the petition and plan, timely response to trustee and creditor objections and communication to keep my client informed as to documents and information needed to get the plan confirmed.

But what of the client’s duties to his/her lawyer and the mindset that you should bring to your case?

• If you want a successful Chapter 13 case you must be proactive and remain involved in your case the entire time it is pending.
• You should recognize that your Chapter 13 provides you a great opportunity to pay back your debt based on a realistic budget that you and your lawyer have created.
• You should recognize in your Chapter 13 case, you have an awesome and powerful ally - a bankruptcy law that empowers you to modify the rights of your creditors, while protecting you from almost all adverse legal action.
• You should recognize that since Chapter 13 creates a payment plan, you have to make payments. Making trustee payments is your primary responsibility. If you do not make payments, your case will fail, and there is nothing your lawyer can do to help you.
• If your plan calls for you to make mortgage payments directly, you have to make those payments. If you do not, the mortgage company will file a Motion for Relief from Stay and take your house away from you.
• You must maintain insurance on your house and car. If you let the insurance lapse, the secured lender will file a Motion for Relief from Stay because its interest is not adequately protected.
• If you sense that you are going to fall behind or you have an emergency, call your lawyer as soon as you can. You cannot ignore problems in Chapter 13 - your creditors and the trustee have systems set up to automatically notify them if a payment is missed or if insurance lapses.
• Your lawyer is not a miracle worker - he will not make trustee or mortgage payments for you. Your lawyer’s job is to create a payment plan that should work. You are the one who has to make it work.
• Your lawyer needs to be able to find you - keep him updated if you change your phone number or if you get a new email or postal address.
• Consumer bankruptcy is a paper intensive business. You will get copies of everything. If something shows up in your mailbox and you don’t understand what it is, call or email your lawyer - immediately.
• If you lose your job or if your budget changes, let your lawyer know immediately. You may have limited options, but fast action on your part may save your case.
• Bankruptcy should be seen as a last resort. Don’t think about what you want, think about what you need. Many Chapter 13 cases last five years so the budget you create for your plan must be a realistic budget. A family of five can get by with $200 a month for food - for a month or two.
• Do not go into Chapter 13 with overly optimistic assumptions - you may not get a bonus this year, gas prices will likely go up, overtime may be cut, your children will cost you more every year, insurance, food and medicine costs will go up.

Finally, use your Chapter 13 case as a learning experience. Once your case is over, you do not want to file again. Examine your spending patterns and think about what got you into trouble and how to spot the warning signs.

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