Chapter 13 Agreed Order options letter
You recently received a letter from us regarding your alleged delinquency with [Creditor|Name]. Please be advised that we cannot act on your behalf in this matter without hearing from you first. It is usually possible, approximately 98% of the time, to work out an agreement with the Creditor to help you get caught up on your payments, but again, we cannot even begin to negotiate an agreement with them if we do not know where you stand on this issue. Please understand that there is no guarantee that we can work out an agreement, but without your response we can almost certainly guarantee you that the Judge will lift the stay so that the Creditor will be allowed to begin foreclosure or repossession proceedings on the collateral. If you have made the payments we will need you to call the office to make an appointment to come in to sign an affidavit with proof of payment no less than 3 days prior to the scheduled hearing date. You must have proof that every payment has been made since the date of filing your Bankruptcy. If you have missed any payments since the filing of your case your payments may have been applied backwards to those missed payments. You can determine what proof of payment you need to bring in by counting the number of payments that have come due since your filing. If, for instance, there have been 5 payments come due since the filing of your case we will need for you to provide proof that all 5 payments have been made. Listed below are some of the possible options you may have in dealing with this issue. Also attached is a response sheet that we must have you read, check your preferences and return to us.
1. Amend Plan Agreed Order- We can ask the Creditor to allow us to amend your plan to include the post-petition arrears to be paid through your Chapter 13 Plan. This may make your plan payment increase slightly or may increase the length of your plan. This will all depend on the amount of the arrears. The more the arrears are the more the increase is likely to be. The benefit of this kind of Agreed Order is that the arrears will be paid out over the life of your plan and you will not have to come up with a large sum of money immediately or within the next 6 months, as is detailed in the Stipulation Payment Agreed Order explained in #2.
2. Stipulation Payment Agreed Order- If [Creditor|Name] will not allow us to amend or modify your plan to include the arrears as detailed in #1 above, they will usually allow us a Stipulation Payment Agreed Order. What this means is that they will take the total amount of what you are behind including late charges and their attorney’s fees and costs in connection with the filing of the motion and divide it into 6 equal payments. You would then make a payment in that amount every month for the next 6 months in ADDITION to your regular monthly payment. If your regular payment is due on the 1st of the month, your Stipulation payment will generally be due on the 15th of the month.
3. Surrender- You also have the option of surrendering the property back to [Creditor|Name] in most cases. While we understand that this would be a difficult decision to make sometimes it is the best way and/or only way for you to get back on your feet. If you are struggling to make the payments this may be the best option for you. In the event you do decide to surrender the property and you have little or no other secured debt being paid through your Chapter 13 Plan you may be able to Convert your Chapter 13 Case to a Chapter 7 case. When you convert your case you no longer make Trustee payments and your debts are generally discharged within about 90-120 days. You can also include new unsecured debt that you have acquired since the filing of your current Chapter 13 case in the Chapter 7 Case. Determining eligibility for a Chapter 7 Conversion is done on a case by case basis.
** NOTE: If you are surrendering a car and your case has been confirmed by the court the process is a little more detailed.
4. Affidavit-If you have made the payments that are alleged in the Motion, it is a necessity for you to come into the office and sign an affidavit attesting to the fact that the payments have been made, that they were on time and full legible proof must be provided of all payments that have come due since the filing of your Bankruptcy Case. If you have made some, but not all of the alleged payments we will need proof of payment, front and back of negotiable instrument used in making the payment, and will then try to work out an agreement with [Creditor|Name] for the balance of the post-petition arrears.
Again, it is always our goal to give you the best Legal representation possible and to make sure you receive the debt relief you sought when you originally came in to see us.We cannot, however, accomplish this goal without help from you. Please read this letter and the options above again then fill out the attached form and return it to us. Should you have any questions, please submit them in writing to our office immediately, this is a time sensitive matter and could mean the difference between you keeping or losing your property. You may hand deliver, fax or email this information to us.
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