Chapter 13 Bankruptcy Reorganization
As a long-time correctional officer, James
didn't worry about his income and thought
his wife Susan would continue to be a
successful realtor. The economic recession  of 2008 and 2009 caused real estate
doors to be slammed shut. |
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A second blow to their financial situation came when the Governor of California forced many departments to cut overtime pay and ordered unpaid furlough days. James saw his monthly gross income plummet, and Susan still owed $15,000 in back taxes from her real estate sales. They didn't qualify for a Chapter 7 as James’ monthly gross income is above the amount set in current bankruptcy law. James and Susan were currently trying to make a 1st mortgage payment of $1,400, a 2nd mortgage payment of $800, and car payments totaling $704. After making minimum payments on all of their bills each month, they had only $617 left for personal living expenses, and a tax bill that continued to grow with interest and penalties. Meeting with Mr. Enmark they learned Chapter 13 law permits the stripping of 2nd and 3rd mortgages, when the value of a property falls below the amount owed on the 1st mortgage. Mr. Enmark created a reorganization plan that calls for a monthly payment to the Chapter 13 Trustee of $645. Over 60 months, that will pay off the back taxes, pay down the credit cards, and pay a portion of the attorney fees. With a monthly take-home of $4,121.00, James and Susan now can make monthly payments totaling $2,749.00 leaving them $1,372.00 for personal living expenses. With the house secure, their vehicles protected, and a reasonable amount for variable living expenses, James and Susan can look forward to financial recovery and future wealth building. |
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