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Chapter 13 Bankruptcy

Financial Reorganization for individuals and Married Couples

Chapter 13 is a reorganization case for individuals and married couples. It is sometimes called a “wage earner” case but anyone with regular income including self-employed persons may be eligible. There are debt limits in chapter 13 that are adjusted over time. Some debts that can’t be discharged in chapter 7 may be dischargeable in chapter 13. Payments are made to a chapter 13 trustee, usually for 36-60 months.

Calculation of the amount that will be paid in chapter 13 is one of the biggest tasks for your attorney and is based on many different requirements, including your property and your income. Many clients believe that they will have to pay most of their debts back in chapter 13, but usually that is not the case. Most of the chapter 13 cases that Mr. Jeffrey has filed paid less than 10% of unsecured debt and many involved no payment at all to unsecured creditors.

The only way to get a reliable opinion on what you might pay in chapter 13 is to talk to an experienced Chapter 13 bankruptcy lawyer who practices on a regular basis in the court where you will be filing. Local custom and practice can vary widely from court to court.

To schedule a FREE consultation with Santa Rosa, California, Chapter 13 Bankruptcy Attorney Thomas Jeffrey at his Sonoma County law office, please call (707) 543-8530 or fill out our online form.

Advantages of Chapter 13

Getting current on a mortgage

Although both chapter 7 and chapter 13 will stop a foreclosure, chapter 7 may not stop it for long if the lender asks for court permission to foreclose. If you make your regular payments on a home loan in chapter 13, the lender normally can't get permission to foreclose. In addition, you will have up to five years to get current on what you were behind to the lender when you filed, either by paying that amount in the bankruptcy or getting the loan modified. (Bankruptcy generally can't force a lender to modify a loan but many clients have successfully modified their home loans while in chapter 13.)

Eliminating second loans and other "junior" liens against your home

Unlike chapter 7 bankruptcy, you can sometimes eliminate second loans and other junior liens in chapter 13. The only real requirement is that your property can't be worth more than the balance of the "senior" liens. For example, if your home is worth $200,000 and the first loan balance is $205,000, you can eliminate the second loan in chapter 13. This has to be done correctly to be effective, particularly with title companies. Attorney Thomas Jeffrey has done many of these cases and he normally includes a "quiet title" action as part of the basic chapter 13 fee that he quotes. Filing a quiet title action helps eliminate problems with title companies when you try to sell or refinance after chapter 13.

Protecting property

If you have property that is worth more than you can protect in chapter 7, filing chapter 13 bankruptcy normally will protect it. Having property that can't be exempted may affect the amount of your payments in chapter 13, but you won't be forced to give the property to the trustee.


Chapter 13 often is the best way for individuals to deal with tax debts. The rules for discharge of taxes generally (although not always) are the same in both chapters, but there still are advantages in chapter 13. For example, if the IRS recorded a lien against you, the lien will survive chapter 7. In chapter 13, you can get rid of the lien completely. Any taxes that aren't dischargeable often are considered a "priority" debt that will be paid in full in chapter 13. Interest on the priority amount stops when the case is filed and penalties often are discharged, which makes it far quicker to pay in chapter 13 than outside bankruptcy.

Steps in a Chapter 13 Bankruptcy

FREE Initial Consultation

At the Law Offices of Thomas Jeffrey, we have found that most potential clients call us only when it’s the last option. Many have taken loans against retirement accounts, borrowed from friends and family, and tried everything else they can think of before calling. They often tell us that deciding to call for the first time was the worst part of the process. Mr. Jeffrey is well aware of that when speaking and meeting with clients. Mr. Jeffrey always does the initial consultation, which can be in person or by telephone (707) 543-8530, at no charge.

During the initial consultation, Attorney Thomas Jeffrey first tries to determine if the clients are good candidates for bankruptcy and if so which chapter of bankruptcy. We have told many potential clients that bankruptcy was not advisable or even necessary, usually without the clients ever having to retain our law firm. Mr. Jeffrey has also talked to and represented clients concerning bankruptcy alternatives, including settlements, payment plans and other options. If bankruptcy will benefit the client, our approach is to explain exactly how and what the costs and consequences will be. Our attorney does not try to persuade clients to file bankruptcy, which we believe is a very personal decision. Mr. Jeffrey has had many clients ask him if they should file bankruptcy. Although in some cases there really are no other options, he has always told his clients that it was their decision to make.

Preparing to File

Most clients have to take a credit counseling class to be eligible to file chapter 13 bankruptcy. This class normally is done on-line, by telephone, or some combination of the two and takes a total of an hour or two. Clients also complete a worksheet that I use to prepare drafts of the documents. Completing this worksheet thoroughly and accurately is critical to the success of the case. Once the worksheet is complete, Mr. Jeffrey will personally review everything. He does not use assistants, paralegals or other attorneys for this. Mr. Jeffrey has had many cases over the years in which he saw things in the documents that alerted him to a possible issue that could be critical to the client. A thorough, conscientious assistant or paralegal can help, but there is no substitute for the knowledge of an experienced chapter 13 bankruptcy law attorney in anticipating these issues.


Once all of the documents have been finalized and corrected, you will sign all documents and the case is then filed. Bankruptcy cases are filed electronically, but the documents signed by most clients are over ½ inch in thickness. The bankruptcy court then mails notice of the filing to you, your attorney, and all creditors. As soon as your case is filed, creditors generally cannot foreclose, repossess or take most other actions to collect debts.

Creditor Meeting

Approximately 30 days after the filing, a creditor meeting is held. The trustee will request that certain documents be provided to him 7 days before the meeting. A list of the documents that he normally requests are on the Forms page. At the Law Offices of Thomas Jeffrey, we tell our clients before the meeting what to expect, which usually involves answering questions by the trustee or the trustee's attorney. The meeting is not in court and creditors usually do not attend. The focus at a chapter 13 creditor meeting is on making sure that we accurately disclosed your assets, debts, income, and expenses, and supplied the trustee with the documents he requested. The trustee also usually goes over any issues that would prevent him from recommending to the judge that your chapter 13 plan be confirmed.   

Confirmation Hearing

There will be a "confirmation hearing" in your case that Mr. Jeffrey normally handles without you having to attend. The confirmation hearing is for the court to determine that your plan meets the requirements of chapter 13. Creditors can object to your plan. Unlike an objection to discharge, it's not unusual for creditors to object to a plan. Most objections are resolved without a separate hearing.

Claim Objections

Creditors can file claims in your case. Since the claims can have a direct effect on your chapter 13 payments (and can have other critical effects on the case), Mr. Jeffrey monitors all claims filed in his clients' cases. (You would be surprised how often attorneys do not do that.) If a claim is filed that is incorrect, Mr. Jeffrey will either get it amended or file an objection. Most of the time that will not involve you having to appear in court.

Elimination of Certain Liens

Some junior liens and liens from lawsuits can be eliminated, but a separate motion or lawsuit is required. Once again, we normally handle that without you having to appear in court.

Financial Management Course

Most clients have to complete a second class in “Personal Financial Management” or “Debtor Education” after the case is filed. Just as with the first class, it normally is done on-line, by telephone, or some combination of the two and takes a total of an hour or two.


In order to get your chapter 13 discharge, your attorney has to prepare certain documents for you to sign and then file. If those documents are not timely filed, your case will be closed without your debts being discharged. This is a simple but very critical step in the case. Further reading: Debts That May Not Be Discharged.

Credit Reporting

At the Law Offices of Thomas Jeffrey, we advise our clients to check their credit report 2 months or more after the discharge order to see if creditors are properly reporting the accounts. Mr. Jeffrey has seen a lot of cases in which creditors have not properly reported accounts after bankruptcy and in some cases it's done intentionally. (There are companies that specialize in buying debt that has been discharged in bankruptcy.  These companies illegally report the account to the credit bureaus in an attempt to get the account paid.) If that happens, we can get it corrected and you may be entitled to damages.

Mr. Jeffrey has had to file suit against creditors after bankruptcy for refusing to correctly report accounts after bankruptcy. If that happens, you are entitled to attorney’s fees and damages.

Contact an Experienced Northern California Chapter 13 Bankruptcy Lawyer

To discuss the specifics of your situation with an experienced Northern Claifornia chapter 13 bankruptcy lawyer, contact the Law Offices of Thomas Jeffrey for a FREE consultation at (707) 543-8530 or fill out our online form . We serve clients throughout the north Bay Area, California, including Santa Rosa, Petaluma, Windsor, Rohnert Park, and other communities.

For more information, read our bankruptcy FAQ page or subscribe to our blog.


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Law Office of Thomas Jeffrey
1400 N. Dutton Avenue, #21
Santa Rosa, CA 95401
P: (707) 543-8530
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