Chapter 9 is for use by municipalities
and municipal entities who file for bankruptcy.
THERE IS NO CHAPTER 20. It is a slang
term used to
describe the practice of filing a Chapter 7 to discharge the unsecured
creditors (credit cards, hospital bills, etc) followed by a Chapter 13
to cure the mortgage default. There are important restrictions on doing
this. There is also a problem of telling the Court that you have no
extra income to pay your creditors, as you must in Chapter 7, and then
filing a Chapter 13 wherein you must tell the Court that you HAVE extra
income to fund a repayment plan. Of course, people's incomes may
change, but you had best be prepared to document this. As you will be
more closely scrutinized, it is even more important that you be
represented by counsel.
Attorney or Paid
Petition Preparer ?
reason to choose an attorney
is that your attorney GOES WITH YOU to all of the Court appearances.
Your attorney stands with you before the Judge. Your attorney goes with
you when you have to be examined by the Trustee. If the
the Judge wants something done in a certain way and by a certain time,
your attorney is there with you and can see that it is done or properly
object to it.
Petition Preparer" is
cheaper, but they just take your money, help you fill out the forms and
send you off alone. If the Trustee or the Judge have any problem with
the way the papers were prepared, or something else, its all on you.
I've seen many people having difficulty with the Trustee because, in
the Trustee's view, the paid petitioner preparers had not prepared the
forms properly. That can happen. I've even had Trustees demand
amendments to my papers. But I'm there to hear EXACTLY what
Trustee thinks needs to be addressed. He can tell me and I will
understand what he is saying.
But those people with the
paid petition preparer have to go back to the paid petition
preparer and try to tell them exactly what the Trustee wanted fixed.
What the trustee told them probably sounded like a lot of mumbo-jumbo
to them, and now they have to repeat it to someone else. Ever played
the game telephone? Let little kids have fun playing
It would not be fun to play with your house on the line.
The Return of Cramdown?:
Cramdown can be very useful
to homeowners whose mortgage is more than their property's value. A
cramdown means that a confirmed bankruptcy reorganization plan may
force the bank to accept less than what is owing. The amount by which
the mortgage exceeds the value gets treated as "un-secured". President
Obama campaigned as supporting mortgage cramdown, and he is still
supporting it, but there have been problems getting it through
If you are in
this situation you
need to consider what possibilities may be opened up by this.
There are various restrictions and requirements being considered. If
you want to make this work, you need to do it right, from the
beginning. The beginning is even BEFORE you file bankruptcy, as it
appears that there will be prerequisite steps. New laws create new
issues and some lenders may try to fight these things more aggressively
than others. It is important to be represented in this changing area of
Of course, it
was sometimes possible
to negotiate the same kind of relief as a cramdown, because the bank
realized that they were going to get less than what was owing if they
auctioned the place anyway.
even if the cramdown provisions are not passed, bankruptcy may make it
possible to negotiate with servicers who otherwise cannot negotiate due
to pooling and servicing agreements. Essentially, the loan servicers
can agree to things in the course of bankruptcy litigation that they
cannot agree to otherwise.
polite reminders through eviction
Special Types of Foreclosure
Estate Taxes, JER, XSpand