looking over documents

What can you do with a Chapter 13?

A Chapter 13 bankruptcy is unique in that it offers a repayment plan that can be individually tailored to meet your needs. Within certain broad rules, you can repay some debts on your terms, and discharge debt that you don’t have to pay!

  1. Stop foreclosure, repossession, and harassing creditor calls

A bankruptcy will almost always immediately stop any repossession, foreclosure, or harassing creditor calls. This is true for any chapter of bankruptcy. But, did you know that if you file your bankruptcy as a Chapter 7, you may not be able to switch chapters later on, to take advantage of benefits not available under Chapter 7? Alternatively, if you file under Chapter 13, you have a unilateral right to convert or dismiss your case any time you want. In an emergency situation to stay a foreclosure or repossession, filing a Chapter 13 bankruptcy is the safe way to go.

  1. Get caught up on mortgage arrears

A Chapter 13 bankruptcy is maybe better known as a “reorganization” type of bankruptcy. In a Chapter 13, the court allows you to repay whatever needs to be repaid over a 3 to 5 year period, while still discharging any debt you don’t need to pay.

If you want to keep your house, you will need to get caught up on that mortgage somehow. One way to get current on the arrears is include them in a Chapter 13 Plan. This takes the total amount of the arrears, and breaks them into monthly payments over 36 mos (3 years) or 60 mos (5 years), depending on what works best for you. One of the greatest benefits of using a Chapter 13 to get caught up on arrears is that you will stop incurring late fees and penalties!

If monthly payments on the arrears isn’t a feasible option for you, a Chapter 13 bankruptcy can also buy you time to get a loan modification or sell your house and avoid a foreclosure.

  1. Get rid of that second mortgage!

In some cases, a Chapter 13 bankruptcy can help you wipe out your second mortgage entirely! People used this tool substantially in bankruptcy when property values declined. With values now increasing, it isn’t used as often, but it is still an important tool in the bankruptcy tool box.

  1. Get caught up on your car loan

If you are behind on your car loan, you can get caught up through a Chapter 13 bankruptcy. A Chapter 13 Plan will take the balance left on the loan and break it up into monthly payments over a 3-5 year period. This usually results in the Chapter 13 monthly car payment being less than your current monthly car payment! Filing a Chapter 13 will also immediately stop the financing company from repossessing your car.

Has the financing company already gotten your car? If they haven’t sold it at an auction, filing a Chapter 13 may allow you to even get your car back after repossession!

  1. Reduce the interest rate on your car loan

A Chapter 13 doesn’t require you to pay the high interest rate you got with your loan. The purpose is to help individuals reorganize debt in an affordable manner, how would an unreasonably high interest rate help you do that? Chapter 13 bankruptcy allows you to set the interest rate you pay on your car loan to the national prime rate, plus 1.5% for risk factor. Usually, the Chapter 13 interest rate is substantially less than your current interest rate.

  1. Reduce the amount you owe on your car loan

Do you owe more on your car than it is currently worth? In some cases a Chapter 13 Bankruptcy plan will allow you to pay only the market value of your car! This will reduce the overall balance of the loan, and results in thousands of dollars in savings to you.

  1. Sometimes, you can even get rid of your car loan completely!

In some specific cases, the Chapter 13 will even allow you to strip the lien on your car!

  1. Repay your taxes – on your terms! Even freeze interest and penalties!

One of the best uses for a Chapter 13 Bankruptcy is to help taxpayers get control of their mounting tax debt. Too many times when we owe taxes, we are unable to easily get them paid off due to the constantly accruing interest and penalties. Even if you enter into a repayment agreement with the IRS, they may be charging you for interest and penalties. This means you are paying the federal government more than you need to!

A Chapter 13 plan will freeze the interest and penalties, and pay the taxes off over the duration of your plan in monthly plan payments. You may even be entitled to a discharge of some of your tax debt.

  1. You don’t make too much money to file

I talk to a lot of people who say they just make too much money to file for bankruptcy, but not enough to keep up with their debt. I understand the frustration and feeling overwhelmed, but this is simply not true. Even if you make too much money to file a Chapter 7 bankruptcy, a Chapter 13 will allow you to pay a portion of your disposable income to unsecured creditors, and discharge the remaining balance of your debt to them. It is very similar to the concept of debt settlement, where you pay pennies on the dollar, but takes the power to accept your offer away from the creditors who got you in this situation in the first place. Because you are proposing the debt settlement within the bankruptcy, it is up to the Bankruptcy Court and the Trustee to accept or reject the plan. And the Bankruptcy Court will never make you pay more than you can afford.

A Chapter 13 bankruptcy is one of the most versatile tools in a bankruptcy attorney’s arsenal. It restructures debt that needs to be paid, like taxes or a house or car you want to keep, while offering all of the advantages of a traditional liquidation bankruptcy.

The important thing with a Chapter 13 is to plan ahead. If you are being charged late fees for a debt now, it is important to talk to an attorney about the advantages of filing sooner rather than later.

Also, if you are facing foreclosure, an emergency bankruptcy can be filed just before the sale, but you may end up paying more in legal fees to get it filed on time. As with all legal matters, planning ahead of time will get you the greatest bang for your buck.

Why you shouldn’t choose the cheapest bankruptcy attorney

If you are a consumer right now looking for an attorney to help you file for bankruptcy, you have almost endless options. Many attorneys practice bankruptcy in conjunction with other areas of law, and some even solely practice bankruptcy. With so many options, it may be tempting to find the attorney who will quote you the lowest price, and feel like you are getting the best bargain for your money. Sometimes, though, the cheapest bankruptcy attorney isn’t always the best bargain! If you don’t carefully choose the right attorney, you could lose out on important legal rights and benefits, and even end up paying back more money than you have to!

Here are some things to consider when you are researching and meeting with attorneys, to make sure you do actually get the best value:

Do you have other legal issues that may impact or help your bankruptcy?
Filing for bankruptcy can be used as a tool to help other legal problems you may have. Most bankruptcies are filed as a result of death, divorce, or disability. If you are getting divorced, it may help your divorce case to file bankruptcy together before the final divorce decree is entered, or separately after. If you are elderly, or have an aging family member, with a substantial amount of debt, it may help probate move more smoothly to file for bankruptcy. If you are being sued for any reason, bankruptcy may be the quickest and cheapest way to resolve that lawsuit, as well as any other debt you may have.
A good attorney will consider how bankruptcy can help or hinder other legal cases you are or may be involved in. It is important for you to discuss these legal cases with an attorney, and equally important for the attorney to consider how the other case will play out with a bankruptcy.

Does the attorney only handle one type, or Chapter, of bankruptcy?
Many attorneys only do Chapter 7 bankruptcies. This is because a Chapter 7 is generally very easy, and the attorney doesn’t need to have a detailed understanding of bankruptcy law. This can result in the attorney filing a Chapter 7 for you, when there may be better options! Other chapters of bankruptcy allow a person to reduce interest rates on some loans, get caught up on delinquencies through payment plans, and sometimes even discharge the loan completely. While you may technically qualify for a Chapter 7, you may benefit more from exploring other types of bankruptcy filings. An attorney who doesn’t handle other types of bankruptcy likely doesn’t have the necessary knowledge to determine which chapter is the best fit for your individual financial situation.

How many years’ experience does the attorney have practicing bankruptcy specifically?
Some attorneys practice in different areas of law and pick up bankruptcy as a secondary area. This can be an advantage, especially if you are using bankruptcy as a tool to help another legal situation, but beware attorneys who lack substantial experience or assistance to determine the best chapter of bankruptcy for you. A bankruptcy attorney with experience will be able to help you take full advantage of the bankruptcy laws to get the maximum benefit and help you get your fresh financial start!

If I owe money, why bother fighting the charges?

banks-cooperationThis is a very important question, and the one that leads many people down the wrong path when dealing with a lawsuit filed against them by a creditor. Many individuals, upon learning they’ve been sued, are tempted to give up and do nothing about it. This is entirely the wrong attitude to have in this situation for a variety of reasons. If your debt situation is such that a creditor is suing you, you need to take control and make sure that things don’t get worse than the already are.

The main reason to act quickly is that the court can make a judgment on the case if you wait too long, even if you don’t say or do anything. This is an ideal situation for a collection agency. They gain the right to some  of your wages and assets, and they don’t have to pay any additional court fees. In fact, you may also have to pay the amount that it costs to bring the lawsuit to court, adding additional debt to those which you already owe.

Even though you do have an obligation to repay the debts you owe, fighting a creditor lawsuit can be beneficial to you in a number of ways. It all starts with consulting a bankruptcy attorney to understand what your creditor(s) can and cannot do, as well as what your options are moving forward. Most bankruptcy attorneys, such as Ted A Greene here at The Law Offices of Ted A. Greene, Inc., will offer you a free consultation and review your court papers to see if there are any discrepancies or abuses on the part of the collection agency. Meeting with a bankruptcy attorney will help you better understand your debt situation and what you need to do to ensure long-term financial health. So don’t delay – take action today if you’re being sued by a creditor!

Rebuilding your Credit After Bankruptcy

Get a secured credit card. A secured card functions like a debit card in that you pay the bank the money beforehand, but your payments should be reported to all three major credit bureaus and go toward building your credit score. Only buy what you can afford, and pay the balance as often as necessary. Keep in mind to be cautious of high start-up fees. Be sure to ask if your transactions will be reported to all three major credit bureaus. After having your secured credit card for a year, ask to switch to an unsecured card with the same bank. Here’s a list of banks in Sacramento that offer secured credit cards:

• Bank of America
• Wells Fargo
• CitiBank
• U.S. Bank

Get a gas credit card. When you’re back on track using a secured credit card, you can try applying for a gas credit card. Try to get a card like this because gas is a necessary expense lessoning the urge to splurge. Be sure to pay the balance off as often as possible just like your secured credit card.

Get copies of your credit report from all three bureaus. You can get one report a year from each bureau for free. You can order your credit report online at: www.annualcreditreport.com

You can also call to have your credit report mailed to you. Here’s a list of the credit bureau contact information:

• Equifax: (800) 685-1111
• Experian (888) 397-3742
• TransUnion (800) 888-4213

Once you receive your credit reports, be sure to dispute incorrect information. To dispute your credit report you can use the online dispute form on the Equifax, Experian, or TransUnion website. Pay your bills on time. Get a calendar with all your due dates (or enter it into your cellular phone), and check it constantly. Make sure the money is ready ahead of time, and try to mail payments or do online transfers a day or two ahead of the deadline. Create a budget and figure out exactly how much
you can only spend each month.

Remember, people have walked this road before you. If they can make it, you can too. Try not to apply for too many credit cards or accept every credit card offer in the mail because it can have a negative impact on your credit score. Avoid spending money you do not have on the any type of credit card so that you can keep yourself from sliding into bankruptcy again.

Bankruptcy & Short Sale Experts

What Is Bankruptcy: Five Things You Might Not Know

What Is Bankruptcy Really? Five Things You Didn’t Know About This Option

We’ve all heard of bankruptcy, whether we’ve seen it in a movie or read about in the newspapers. Bankruptcy is a means to resolve the issue of a debtor ETF, personal finance, bankruptcy, personal debt,  being unable to repay his or her debts. You may not know anyone who’s been through the bankruptcy process, but the fact of the matter is it can happen to anyone. Here are some things about filing for bankruptcy that you may not have known.

1. You don’t necessarily need to give away your assets

Not all types of bankruptcy involve giving away your assets like most people believe. One type of bankruptcy lets you keep them, specifically Chapter 13 bankruptcy. Chapter 13 bankruptcy involves creating a repayment plan so that you’ll be able to repay your creditors without giving up the assets you require.

2. Bankruptcy does not release you from all debt obligations

There are certain types of debt that are impossible to discharge through bankruptcy. The most commonly known type is student loan debt, but those who’ve been through divorces also won’t be able to discharge payments to spouses or children of spouses. Some types of money owed to the government, like fines or recent back taxes, also must be paid regardless of bankruptcy status.

3. Filing for bankruptcy requires credit counseling

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act requires everyone filing for bankruptcy to receive credit counseling. The organization providing the counseling must be approved by the government, and individuals must have taken part in such counseling in the six months before they file for bankruptcy. For those dealing with bankruptcy, bankruptcy specialists like us might be able to help.

4. Getting credit after a bankruptcy won’t be as difficult as you think

Most people believe getting credit after filing for bankruptcy is nearly impossible. As it turns out, many lenders will let you take out loans just six months after a bankruptcy if a down payment is provided, and credit cards companies are generally also willing to issue cards with which you can rebuild your credit after you file. The reason for this is that once you file for bankruptcy, you won’t be able to file again for four to seven years.

5. You can repay some of your debt, but not all types of bankruptcies require it

It’s not necessary to repay any of your debt through Chapter 7 bankruptcy, though it requires you to liquidate all your assets. With Chapter 13 bankruptcy, however, you’re required to repay some of your debt.

Most people who live within their means and don’t need to borrow enormous amounts of money with a risk of losing all or part of their income will not need to worry about bankruptcy. But for those with no other options, bankruptcy can be a means to solve the problem with advantages and disadvantages that many people aren’t aware of.



Chapter 7 vs. Chapter 13

Which Chapter Does Your Bankruptcy Belong In?

Man calculating his bills while his family are on the sofaIn 2005, a major change was made to how Chapter 7 Bankruptcy is processed in the United States. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 instituted a means test to determine whether an individual should file for Chapter 7 or Chapter 13 as well as some other new requirements. Chapter 11 is typically for small businesses and will not be addressed in this article. Many may dispute how much abuse has been prevented and just how consumers are being protected by this law. Anyway, let us now focus on the means test requirement.

Test Your Means, Does It Amount to More Than a Hill of Beans?

The means test will determine whether you are eligible for Chapter 7 or 13. If you make more than the median income for your state, California’s median income for a single earner is $48,415, then you will have to file for Chapter 13. Why is this important? Chapter 7 liquidates your debts quickly whereas a Chapter 13 filing entails a 3-5 year payment plan with a strict budget. More on that in a moment.

What Does Chapter 7 Bankruptcy Mean to Me?

Chapter 7 bankruptcy is the most common form filed and we are experts on it here at the Law Offices of Ted A. Greene. Many of our clients ask what Chapter 7 requires. We do not need all of this information in the first consultation but as we work with you we will require:

  • A complete list of all creditors as well as the specific amounts and the nature of each claim
  • The origin, amount, and frequency of our client’s income
  • Last 2 years of most recent tax returns
  • Previous 6 months of bank statements
  • A list of our client’s property and all assets
  • A detailed breakdown of each client’s monthly living expenses including: food, clothing, shelter, utilities, taxes, transportation, medicine, etc.


Regardless of whether a married person is filing jointly or individually, the court requires this information for their spouse as well to evaluate the financial position of our client’s household. The state of California has its own exemption systems as allowed by federal law and requires each debtor filing for bankruptcy to use one of two schedules. We won’t get into the specifics of the property exemptions allowed in this article but it is extensive. Once you have properly filed for Chapter 7 bankruptcy your debts can be resolved in as little as 4-6 months.

Why Would I File Chapter 13?

The main reason many people file for Chapter 13 is because they make too much money to qualify for Chapter 7. An income that is higher than $48,415 for a single earner in California will typically push you over into Chapter 13. There are some deductions that can keep you in a Chapter 7 if you are slightly over the median income but we won’t address their complicated nature here.

The main feature of Chapter 13 is the repayment plan. This plan allows you to address your debts in payments as negotiated by the bankruptcy trustee. The plan is proposed in “good faith” with the full intention of completing the payments. The Chapter 13 repayment plan may take 3-5 years to complete. Many creditors owed for unsecured debts may receive as much as they would have in Chapter 7 bankruptcy, meaning nothing. If one is unable to complete a payment plan on Chapter 13, a Chapter 7 may be allowed after the failure of the payment plan. Many may use an emergency Chapter 13 filing to stall a foreclosure long enough to complete a short sale. There are restrictions in Chapter 13 which will require one to seek approval before applying for substantial new debt such as a car loan. While we do not process Chapter 13 filings here at the Law Offices of Ted A. Greene, we can refer you to someone who is quite capable.

What Should I Do?

If you are a California resident and are tired of creditors harassing you, tired of feeling overwhelmed and under-informed, or you just want to know what your options are please contact me, Ted A. Greene, today at 916.442.6400. Either a member of my experienced staff or I will talk to you. Your initial consultation will cost you nothing more than your time. You can also complete the form on our Contact Us page and we will call you. I personally guarantee I can process your Chapter 7 bankruptcy for less than any other attorney in the Sacramento metropolitan area, come in, sit down, and we can help you chart a better financial future for you and yours.