FILING A CHAPTER 13 BANKRUPTCY ON LONG ISLAND
This article, for individuals considering filing a chapter 13 bankruptcy on Long Island, was
written by Long Island bankruptcy lawyer Alan Pressman. (631) 234-3883
Alan Pressman is a Long Island bankruptcy attorney located near Central Islip, Hauppauge,
Ronkonkoma, Bohemia, Brentwood, Bay Shore, Holbrook, Shirley, and Mastic.
Chapter 13 enables you to consolidate your unsecured debts (such as credit cards, medical
bills, bank loans, personal loans) into one monthly payment -- and in Chapter 13 you can
sometimes pay back as little as 10% of your unsecured debt -- over a five (5) year period --
with no interest.
If you have a high income, you may not be eligible for chapter 7. Yet, having a high income
does not prevent you from filing a Chapter 13. If your income is over, say, $100,00 per year,
you may want to consider filing Chapter 13 so as to consolidate your unsecured debts into one
payment per month. In Chapter 13, you can take 60 months to pay back your unsecured
debts, and your unsecured creditors are paid back with no interest. In a Chapter 13 100%
payback plan, you always keep all of your property, including any tax refunds which you
receive while the Chapter 13 is in effect. With a 100% payback plan, you can even keep time
shares, rental properties, and luxury vehicles. You get the benefit of the automatic stay by
filing a Chapter 13-- that is, once the Chapter 13 has been filed with the Bankruptcy Court,
creditors can't take any actions to collect (such as harassing phone calls, threatening letters,
lawsuits, garnishments, bank account freezes). And it looks better on your credit if you have
repaid your debt 100% (as opposed to discharging your debt).
With a 100% Chapter 13 in which you are paying back solely unsecured debts, you can pay as
little as $500 towards my legal fee, plus $350 to cover the filing fees and costs, to get the
Chapter 13 filed with the Bankruptcy Court. There will be additional legal fees owed to me in
connection with the Chapter 13, but you can pay those out over time within the Chapter 13
Chapter 13 is also often filed to stop a foreclosure or when you have too much equity in your
house to file a Chapter 7. Once a Chapter 13 is filed with the Bankruptcy Court, it
immediately stops a foreclosure. Usually, you can repay your mortgage arrears through the
Bankruptcy Court, over a five (5) year period.
Taxes, such as income taxes and property taxes can also be consolidated in with the monthly
Chapter 13 payment and usually can be paid back, through the Bankruptcy Court, over a
period of five (5) years.
In Chapter 13, you always keep all of your assets -- the Bankruptcy Court has no right to take
any of your property away from you -- even if you own a house with a lot of equity.
If you have too much equity in your house to file a Chapter 7 bankruptcy, you will want to file
a Chapter 13 bankruptcy instead. In Chapter 13, you will have no risk of losing your house.
Even if you have a lot of equity in the house, you will still definitely keep it. But if you have a
lot of equity in your house, you will be required to pay back a percentage of your unsecured
debt in the Chapter 13. How much you have to pay back to your creditors typically depends
on how much equity you have in your house (i.e. the more equity you have, the more you will
have to pay back to your creditors). Whatever amount you do have to pay back to your
creditors, you will normally be given five (5) years to do so -- you will most likely be making
monthly payments to a bankruptcy trustee.
If your house is in foreclosure, the Chapter 13 must be filed before the foreclosure sale date
in order to stop the foreclosure. Even if you have received a foreclosure summons from your
mortgagee, you still can file a Chapter 13 and stop the foreclosure and get five (5) years to
pay back your mortgage arrears through the Bankruptcy Court. From the time you receive
the foreclosure summons, it takes at least several months for the mortgagee to get to the
point of the foreclosure sale. (The total time it takes depends to a large extent on how
quickly the mortgagee moves in terms of proceeding with the foreclosure).
You can stop the foreclosure at any time prior to the date of the foreclosure sale by filing a
Chapter 13 bankruptcy.
Once the Chapter 13 petition has been filed with the Bankruptcy Court, starting with the
month after you filed the Chapter 13, you will resume making your regular monthly mortgage
payments (your bank will have to accept them since you are in a Chapter 13). And you will
have an additional payment to make each month (usually for a period of 60 months) to a
bankruptcy trustee. (This is a specific attorney appointed by the Bankruptcy Court to
administer the Chapter 13 case. In Suffolk County there are presently two different attorneys
who handle the Chapter 13 cases -- Marianne DeRosa and Michael Macco). Your first payment
to the bankruptcy trustee will be due thirty (30) days from when your Chapter 13 petition was
The "CHAPTER 20" Bankruptcy
If you have unsecured debts (such as credit cards, medical bills, personal loans, repossessed
car debts, etc.) as well as arrears on mortgage payments, it may save you the most money if
you file what is known, unofficially, as a "Chapter 20" bankruptcy. Chapter 20 bankruptcy
consists of filing a Chapter 7 bankruptcy to discharge your unsecured debts (you normally
receive your Chapter 7 discharge 3-4 months from the filing date of your Chapter 7) – - and
then, after the chapter 7 case is over, filing a Chapter 13 bankruptcy, ie.-- shortly after you
receive your Chapter 7 bankruptcy discharge. The Chapter 13 will be strictly helping you
repay your arrears on any mortgages you have. In the Chapter 13 bankruptcy, you can repay
your mortgage arrears over a 5-year period through the Bankruptcy Court. For a period of 60
months, you make a monthly payment to a Chapter 13 Trustee (which the Trustee forwards to
your mortgagees) in order to make up your mortgage arrears. During the 60-month period
that you are making Trustee payments, you also make your regular monthly mortgage
payments – - directly to the mortgagees. (Because you are in a Chapter 13 , your
mortgagees have to accept your monthly mortgage payments from you).
With a Chapter 20 bankruptcy, you are not repaying anything to unsecured creditors (such
as-- credit cards, medical bills, personal loans, repossessed car loan debt, etc.) because these
debts have already been discharged in the Chapter 7 bankruptcy case which you filed (and
received a discharge on) several months prior to when you filed your Chapter 13 bankruptcy.
Contrast this with the scenario wherein (instead of filing a Chapter 20 bankruptcy) you
merely file a Chapter 13 bankruptcy without first filing a Chapter 7 bankruptcy (and thereby
getting your unsecured debts discharged). Under this scenario, in your Chapter 13 you would
have to pay back at least 10% of your unsecured debt in the Chapter 13 case.
Important point to keep in mind:– If you have unsecured debts and you are repaying less
than 100% of your unsecured debts in your Chapter 13 plan, your Chapter 13 Trustee will
require a sentence in your Chapter 13 plan stating that any tax refunds you receive during
the 5 years of the Chapter 13 case must be turned over to the Chapter 13 Trustee for
distribution to your unsecured creditors – - this is in addition to your regular Trustee
payments (which are paying back your mortgage arrears as well as a percentage of your
unsecured debt). As such, filing a Chapter 20 bankruptcy can be very beneficial, (as opposed
to merely filing a Chapter 13) when you have unsecured debt as well as mortgage arrears.
If you would like a free consultation with Alan Pressman on Chapter 13 bankruptcy, call (631)
3100 Veterans Highway
Bohemia, N.Y. 11716
(Long Island Expressway, exit 57-- approx. 2 miles southeast)
I have been actively handling Chapter 13 bankruptcies on Long Island for more than 30 years.
My practice is 100% handling bankruptcy cases.
I am a solo practitioner and, as such,
I will handle your case personally.
Thanks for taking the time to visit my website.
Copyright 2011-3, Alan Pressman Attorney At Law
Alan Pressman, chapter 13 bankruptcy lawyer near Ronkonkoma,11779; Hauppauge,11788; Bohemia,11716;
Holbrook,11741; Islandia,11749; Central Islip,11722; Brentwood,11717; Islip, 11751; Islip Terrace, 11752;Bay
Shore,11706; East Islip,11730; West Islip,11795; Oakdale,11769; Sayville,11782; Blue Point,11715; Lake
Ronkonkoma,11779; Smithtown,11787; Nesconset,11767; Saint James,11780; Lake Grove,11755; Deer Park,11729;
Commack,11725; East Northport, 11731; Huntington Station,11746; Wheatley Heights,11798; Wyandanch,11798;
Babylon,11705; North Babylon,11703; West Babylon,11704; Kings Park,11754; Centereach,11720; Holtsville,11742;
Medford, 11763; Middle Island,11953; Stony Brook,11790; Coram,11727;Port Jefferson Station,11776; Patchogue,
11772; Brookhaven,11719; Manorville,11949; Yaphank,11980; Farmingville,11738; Shirley,11967; Mastic,11950;
Mastic Beach,11951; Bellport,11713; Center Moriches,11934; etc. --
serving all of Long Island since 1981