Chapter 13 Bankruptcy Basics

A Chapter 13 Bankruptcy is also called a “wage earner´s plan”. It allows a debtor to develop a plan that pays back a portion of their debt. The plans are typically five years long but may only be three years if the debtor makes less than the medium wage. A bankruptcy attorney can easily determine if you make less than the medium wage. A Chapter 13 Bankruptcy can also allow you to include past due payments for a home mortgage or a car loan in the plan. This will stop a foreclosure or repossession and allow you to catch up with your past due payments in 36 or 60 payments over the life of the plan. You may only pay a fraction of your unsecured debt in the plan. The remaining unsecured debts may be discharged upon completion of the plan. Talk to a bankruptcy attorney in your area to determine which of your debts are dischargeable under a Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy Eligibility

Any individual, even if self employed, may be eligible to file a Chapter 13 Bankruptcy. You must have less than $307,675 in unsecured debt and less than $922,975 in secured debt. There are also limits based on prior bankruptcies and a pre-filing credit counseling requirement. Talk to a bankruptcy attorney to get the details about Chapter 13 Bankruptcy eligibility.

Chapter 13 Bankruptcy Timeline

These are the typical basic steps involved in a Chapter 13 Bankruptcy:

1. Make a fee consultation with a bankruptcy attorney in your area to determine your eligibility and have all your questions answered.
2. Gather the necessary documentation to deliver to your bankruptcy attorney so your attorney can form your Chapter 13 Bankruptcy case.
3. Once your Chapter 13 Bankruptcy is filed you will be notified of your meeting with the trustee and your Chapter 13 Bankruptcy plan confirmation hearing.
4. Make your Chapter 13 Bankruptcy plan payments for the life of your plan.
5. Wait for the final order of discharge.
6. Get back to your life!

How a Chapter 13 Bankruptcy works

A Chapter 13 Bankruptcy begins with the debtor’s attorney filing a voluntary petition, schedule of assets, schedule of liabilities, schedule of income, schedule of expenditures, and other related documents on behalf of the debtor. The debtor is also required to provide a copy of their last three years tax filings, some proof of income, and proof of meeting the pre-filing credit counseling requirement. Your bankruptcy attorney will walk you through these requirements. Married couples may file joint petitions. Immediately upon filing the voluntary petition the automatic stay takes effect. This is a temporary injunction that stops all: collection attempts; repossessions and foreclosures; and creditor harassment. The automatic stay is taken very seriously. Creditor violations of the automatic stay may be acted on by your attorney and may result in damages paid to you. Between 20 to 40 days after the filing of the voluntary petition, the trustee will hold the meeting of the creditors. You must attend this meeting and have your social security and photo identification available. The trustee may request additional documents. It is important to cooperate with the trustee and supply any requested documents as soon as possible. Within a few months of your meeting with the trustee you will have a Chapter 13 Bankruptcy plan confirmation hearing. Your bankruptcy attorney will tell you if you need to attend this hearing. Once the hearing is completed and the plan has been confirmed you continue to make your monthly payments for the life of the plan. The plan may be changed prior to completion based on changing circumstances or hardship. This entire process is made simple with the help of a bankruptcy attorney in your area!