Matador Legal » Chapter 13

Business Bankruptcies increase in Pittsburgh by 11%

Matador Legal — Tue, 16 Jun 2009 13:01:20 +0000

Business Bankruptcies have risen by 11 % in the first quarter in 2009, compared to 2008. According to American Bankruptcy Institute’s data here, 14,319 business filings were prepared in US. Bankruptcies are usually considered a lag indicator for the economy, as in it lags business life cycles.

Among these 9700 were chapter 7 filings. The Pittsburgh area recorded 163 business bankruptcies, among these 95 were chapter 7 liquidation and 49 were chapter 13 reorganization.

The total bankruptcies across US including business and business have touched 330,477, while Pittsburgh accounting for 3359.

http://pittsburgh.bizjournals.com/pittsburgh/stories/2009/06/15/story3.html?b=1245038400^1844327

What happens after a Chapter 13 petition ?

Matador Legal — Sun, 14 Jun 2009 07:34:15 +0000

After a chapter 13 petition has been accepted in the court, the court approves of a 3 year or 5 year repayment plan. The trustee appointed by the US bankruptcy court oversees the plan.

The chapter 13 repayment plan is made with its own set of assumptions, like steady income over 5 years, no wage loss, no liability through accidents, no major health issue etc. Sometimes these assumptions are proved false, and the debtor struggles to meet the obligations of the repayment plan. In this scenario, the debtor may directly meet the trustee to modify the plan or he may contact his attorney, who then arranges to meet the trustee and modify the plan. In a worst case scenario, a chapter 13 can be converted into a chapter 7 liquidation.

In case. the debtor falls short of his repayment, the trustee can file a motion to dismiss the chapter 13 petition. As a response to this the debtor’s attorney usually needs to file a motion to modify the plan.

Bankruptcy Chapter 13 advantages

Matador Legal — Mon, 25 May 2009 12:28:39 +0000

Chapter 13 consumer Bankruptcy in US has a number of advantages over liquidation under chapter 7. The most significant being that it gives the debtors a chance to save their homes from foreclosure. As soon as a debtor files for a chapter 13, the foreclosure proceedings are stopped and the delinquent mortgage payments are renegotiated. Nevertheless the payments need to be made according to the reorganization plan.

Chapter 13 also allows a debtor to reschedule secured debts (other than a mortgage for a primary residence) and extend them over the lifeline of chapter 13 plan.

Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts.” This provision may protect co-signers.

Finally Chapter 13 acts like a consolidation loan, where all the loans held by the debtor are consolidated into one single loan which needs to be paid to the trustees appointed by the bankruptcy courts.

Source:

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html