Defending Creditors in Chapter 13
Chapter 13 is a very structured bankruptcy. So, what happens to creditors in Chapter 13 is largely controlled by statute.
Generally, secured creditors are paid the value of their collateral. However, creditors whose claims are secured only by the debtor's principal residence must be paid in full. Secured creditors who have notes that will be paid after the conclusion of the Chapter 13 retain their lien and their note. Otherwise, generally, the unsecured portion of the notes are discharged and the secured portion is paid.
Unsecured creditors in a Chapter 13 share in the leftovers after the secured claims are paid, after the priority claims are paid (tax claims) and after the debtor has enough to live on. Unsecured creditors are paid their pro rata share over five years. So the distribution in a Chapter 13 may be small over a long period of time.
Landlords have particular rights in Chapter 13 as in Chapter 11.
Any creditor holding a contract for deed may have a position superior to a conventional lender.
We offer contingent fees for the representation of creditors in Chapter 13 for selected cases. If you are interested in a contingent fee, then please mention it when you call.
Alimony and child support creditors are entitled to full payment of all present a back alimony and child support. Their only real concern is to be sure that the plan actually provides for full payment.