As a Hazel Crest bankruptcy attorney, I often see a debtor who was going to stumble right out of the block. In other words, right away, in month one, months two, month three, somewhere in the first few months there’s going to be a breach in the payment whether it be to the Chapter 13 trustee, it may be to the mortgage company post-petition, it might be on a least auto, it might be on a post-petition child support obligation. But there is going to be something where the debtor cannot make the payment right out of the box. In those situations, we are not looking at a very successful Chapter 13. We are not looking at a long-term case. We are not looking at representing the debtor for a very long time even though they are paying us to possibly represent them for 3 to 5 years under a flat fee. It is those cases where we seriously need to examine whether or not this debtor should be in a Chapter 13 repayment plan. It is this type of case where we have to ask the debtor look, is filing Chapter 7 bankruptcy more appealing to you now, now that you see it is really difficult to make a Chapter 13 work?
Let’s talk about why when you file Chapter 13 bankruptcy, the case can be so difficult. In order for a Chapter 13 repayment plan to work, the debtor must be absolutely consistent in not only the trustee payment but in post-petition mortgage payments. To make your regular mortgage payment again on time is difficult enough. To then be asked to make a post-petition payment is even more difficult.
One of the things that makes Chapter 13 difficult is that many people do not have the ability to have the Chapter 13 plan payment come directly out of their check. If someone is self-employed, if someone is on Social Security, if someone receives any other form of income other than from a paycheck or job, then that debtor has a responsibility to make a money order or cashier’s check each month and mail it off to the Chapter 13 trustee. That is very difficult for many debtors to do because it takes effort, it takes budgeting and it takes work. As a bankruptcy lawyer, I can give all kinds of legal advice to assist the debtor. Unfortunately, many of the life decisions with regard to spending money are solely up to the debtor. If the debtor is unwise, the case will crumble despite the good advice of counsel.