Chapter 13 Bankruptcy
Does it pay for you to file a claim
based on the labor and repayment
length?
Kenlyn T. Gretz
CEO of Americollect
Since 1964
Not Legal Advice
If you aren’t an attorney, get
one if you need one.
Chapter 13
• A payment plan or rehabilitation-style case for
individuals with a regular source of income
• Chapter 7: A liquidation-style case for
individuals or businesses. Consumer pays
nothing 90% of the time.
Chapter 13 Basics
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Consumer Education is completed – 180 Days
Filing Fee of $274
List of Assets & Liabilities are presented to Trustee
Means Testing is done & determination if debt will be
pro-rated
All assets are kept, but Trustee determines repayment
terms of 3 to 5 years.
Notice & Automatic Stay to creditors
Meeting of Creditors
Payments are made to creditors who file a claim
Debt is discharged
Converting a 13 to a 7
 The consumer can convert a Chapter 13 to a 7 as
long as they have not filed a 7 within the last 8
years.
 Files Chapter 13 on 05-01-14
 Converts to 7 on 02-10-2015
 All debts incurred between that time can be
included in the new filing of 02-10-2015.
 Must not have filed Chapter 7 in last 8 years.
Cannot File Bankruptcy Again
Chapter 13 to Chapter 13. If your debts were
discharged in a prior Chapter 13 case, you cannot
receive a discharge in a subsequent Chapter 13
unless it is filed at least two years after the date
the first case was filed.
Because it usually takes three to five years to
complete a Chapter 13 repayment plan and
receive a discharge, you can typically file for
another Chapter 13 bankruptcy and be eligible
for a discharge immediately after your first case is
closed.
Cannot File Bankruptcy Again
Chapter 7 to Chapter 13. If your first discharge
was under a Chapter 7 bankruptcy, you can
file for a subsequent Chapter 13 and be
eligible for a discharge if the case is filed at
least four years after the filing date of the
initial Chapter 7.
Cannot File Bankruptcy Again
Chapter 13 to Chapter 7. Finally, if you received a
discharge in a previous Chapter 13 bankruptcy,
you must wait six years from the date the
Chapter 13 was filed before you can file for and
receive a discharge in a subsequent Chapter 7
case. But there is an exception to this rule. The
six-year rule does not apply if, in the previous
Chapter 13, you paid back:
a)
b)
all of your unsecured debts, or
at least 70% of your unsecured debts and
your plan was proposed in good faith and
your best effort.
More Debts After Filing
It is possible for a consumer to add on more claims to
a Chapter 13 case already filed if the debt was
incurred after the original filing date, but it does
not happen often. The debt would need to be a
debt created outside of their control (credit card
debt would not qualify in most cases).
 This is not automatic.
 The trustee would need to approve.
 This does not happen too often; most convert to a
Chapter 7.
Notifications of Bankruptcy
http://ebn.uscourts.gov/register/link_works.adp
Email PDF notification of bankruptcy
documents.
Notifications of Bankruptcy
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Data Files V Email PDF
Warning: the mapping guide is 62 pages long!
Strong programmers
Cost justification
http://ebn.uscourts.gov/documents/edi_sw_vendors.adp
PACER
www.pacer.gov
https://pacer.login.uscourts.gov/csologin/login.jsf
$0.10 per page clicked on, but not to search.
Cap of $3.00 per document.
Bankruptcy Court Websites
From www.Pacer.gov
https://www.pacer.gov/psco/cgi-bin/links.pl
Some uniformity, but not 100%
CMECF
https://www.pacer.gov/psc/efaq.html#CMECF
Case Management/
Electronic Claims Filing
Redaction
REDACTION link
http://www.pacer.gov/privacy/bk.html
Redaction
1. Audit Proofs of Claim
2.
a) the last four digits of the social-security
number and taxpayer-identification
number;
b) the year of the individual's birth;
c) the minor's initials; and
d) the last four digits of the financial-account
number.
3. The name of an individual, other than the
debtor, known to be and identified as a minor
4. Financial account #? Healthcare account #?
Chapter 13 Stats!
File Chapter 13 – Three Outcomes:
1. Complete the plan - you get paid a % on the $
2. Consumer stops making payments - you don’t
get paid and it gets dismissed.
3. Consumer converts to Chapter 7 - you don’t get
paid.
Chapter 13 Stats!
 2014: 900,000 filed - all Chapters
down 12% from 2013
 Chapter 13’s increased from 32% to 34%
 87 Billion in Assets compared to 140 Billion in
debts
Chapter 13 Stats!
51% are completed
49% are dismissed
Chapter 13 Stats!
• 51% are completed
• A total of 344,873 Chapter 13 consumer cases
filed on or after October 17, 2006, were
terminated during 2014. The mean time
interval from filing to disposition was 1,133
days (up from 1,036 days in 2013), and the
median time interval was 1,229 days (up from
1,092 days in 2013).
Chapter 13 Stats!
 51% are completed - 2014
 45% - 2013
 37% - 2012
http://www.uscourts.gov/statistics-reports/bapcpa-report-2014
Chapter 13 Stats!
In 36 percent of the 301,103 cases (107,602) in
which debtors sought protection under
Chapter 13 in 2014, the debtors stated that
they had filed a bankruptcy petition during
the previous 8 years.
How Much Will You Get Paid?
Make sure your team knows how to find this.
99.9% of our listeners are unsecure.
Calculator
Labor Time To File Proof
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Redaction (print, black out, scan back in)
Multiple DOS. Combined Form.
Multiple Patients - spouse.
HIPAA Risk (uploading the wrong patients
proof of claim)
 Time to upload and go on line and enter claim.
 7 minutes to 15 minutes per proof.
Labor Time To Apply Payments
The cost of applying the Chapter 13 repayment
$$ that trickle in is a hard one to figure out.
 1 payment or 100?
 Remembering to adjust the balance at the
end.
 Juggling payment application on many
different dates of service.
Labor Time To Apply Payments
 Trustees are starting to Automate ACH
payment and sending electronic file.
 Sample File
Dismissed Not Filed
 If you choose not to file a proof of claim, you
must cancel the account balance immediately.
 If the case is later dismissed, you can re-open
the account and continue collecting.
Things to Consider
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Are you secured or unsecured?
What % on the dollar are they paying?
What is your cost to file the proof of claim?
How long will you keep the account open on your
system?
What is the possibility of violating the automatic
stay?
Will they have new accounts and will this
bankruptcy pending account get mixed in?
When was the last time they filed a Chapter 7?
Are they doing a 13 to buy some time?
Join Us For Our Next Webinar:
ITEMIZED STATEMENT REQUEST
Learn how to streamline the process, reduce time spent with
them, and learn why validation of debt request is needed
Host: Kenlyn T. Gretz
Tuesday, Dec. 8th, 2015
1:00 PM - 1:45 PM CST
If you would like to register today, visit our website at
https://attendee.gotowebinar.com/register/11992740546150658
OR send an email to sales@americollect.com
If you’re UNABLE to attend but would like to receive the recorded webinar and
handouts, fill in this form at:
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