Good morning and thank you. It is an honor to be here with you again at your annual seminar. Last year, I was with you in San Francisco providing commentary on recent cases and an update on the world of student loans. Today, I wear a different hat, but I can assure you that I am no less passionate about the Bankruptcy Code and its promise of relief to financially struggling Americans.
We know that bankruptcy is a constant balancing act between a debtor’s fresh start and the fair and equitable distribution of assets to creditors. We know that chapter 13 has the potential to breathe new life into those burdened by financial struggles and offer them a second chance at rebuilding their futures. We know that successful chapter 13 cases deliver as much or more to creditors than what they would receive in chapter 7. And we know that debtors’ success in chapter 13 is no small feat; the road from confirmation to completion of a plan is often riddled with obstacles and challenges.
I want to start today by telling you about a divorced father living in an apartment with his 13-year-old son. He is a maintenance worker with a steady job, but behind on taxes and credit cards. Payday loans did not solve his financial troubles. He filed a chapter 13 and confirmed a plan in about two months. So far so good. Then came the car accident and a motion to dismiss for failure to make plan payments. Still, he managed to persevere. Fast forward five years, his son is now 18, his priority debts were paid in full, his unsecured creditors were paid 79 percent, and he received his discharge.
Let me also tell you about a couple-a machinist and a retail associate. They originally filed chapter 13 to save their underwater family home from foreclosure. Unfortunately, they were unable to maintain steady employment and they lost the house. But they did not give up on their chapter 13. Ultimately, more than three years after filing, they discharged various debts owed to debt collectors, credit card companies, and medical centers. They paid a 25 percent dividend to their unsecured creditors and were able to keep the family cars. They did their best.
And finally, I want to tell you about a retiree living on Social Security and a pension, but still deeply in debt, struggling to keep up with mortgage and car payments. Bankruptcy does not solve the underlying social conditions that leave many of our seniors in debt after a lifetime of work, but it does provide a last safety net. In this case, the debtor completed his plan, paid about $27,000 over 45 months, and received his discharge.
These debtors are not alone. In the past few months, I reviewed these cases as well as those of a laborer, a waitress, a programmer, an administrative assistant, a retail manager, and several retirees. They all completed their plans and received their discharges. Some paid significant dividends to unsecured creditors and others just barely managed to cure the arrearages on home mortgages. None had a flawless path, but they made it.
These cases are a reminder that the work you do has the power to transform lives, offering individuals and families a chance to rebuild and thrive. I thank you for all your hard work.