Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is called a reorganization bankruptcy. In this chapter you can keep your non-exempt property, unlike in Chapter 7 where you have to surrender it to the trustee. This chapter is available to people with a regular monthly income who agree to pay part of their income to the creditors over a period of three to five years. All too often our clients come to us and are unaware of the actual process of filing for bankruptcy protection. We have simplified the steps of a bankruptcy into a few core stages along with what we require of you as part of this process.

Important Information About Bankruptcy Assistance

If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. The law requires an attorney or bankruptcy petition preparer to give you a written contract specifying what the attorney or bankruptcy petition preparer will do for you and how much it will cost. Ask to see the contract before you hire anyone. The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.

  • Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and determine which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents need to be prepared correctly and filed with the bankruptcy court; these include a Petition, Schedules, a Statement of Financial Affairs, as well as in some cases a Statement of Intention. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you must attend the required first meeting of creditors where you may be questioned by a court official called a “trustee” and/or by your creditors.
  • If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. No creditor is permitted to coerce you into reaffirming your debts.
  • If you choose to file a chapter 13 case you may also want help preparing your chapter 13 plan and also with the confirmation hearing on your plan which will be before a bankruptcy judge.
  • If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief.
  • Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.
CHAPTER 13 FILING ROADMAP

Pre-Filing

1. Pay attorney’s fees in full, gather all required documents, schedule an appointment for a Questionnaire Review, and write down questions for the attorney. 2. Provide any additional documents requested at the Questionnaire Review, take the Credit Counseling Course at Debthelper.com. If you have an operational business, please provide our office with the business’s bank statements. Additionally, please annotate all non-business related (personal) deposits and withdrawals. Our office will give you a call to schedule an appointment to sign your bankruptcy petition once it is ready. 3. On the date of filing your bankruptcy petition our office will give you a call to get the current balances for all of your bank accounts (personal and business). You will be provided with the case number once your bankruptcy petition is filed.

Post-Filing

4. About a week after your petition is filed, a bankruptcy Trustee will be assigned and a date for the 341 Meeting of Creditors will be automatically scheduled by the court. The meeting will usually take place about 30-45 days after filing. You will receive a letter from our firm reminding you of the date, time, and place of the meeting. You must attend the meeting in person and bring your original Social Security card and Driver’s License to show the Trustee. At the meeting the Trustee will ask you questions about your assets, liabilities, income, expenses and other questions pertaining to your specific case. Please be familiar with your monthly expenses such as food, home maintenance, and medical expenses. 5. Your payments to the Trustee will start in about 30 days from the date of filing your petition. You will receive a letter from the Trustee indicating the amount, date of payment, and the address where to send the payments. The next step in a Chapter 13 filing is a Confirmation of Your Plan Hearing. You do not have to attend this hearing. The attorney handling your case will attend the hearing on your behalf. Prior to the confirmation hearing the Trustee will file a Recommendation concerning your case. Usually the Recommendation is Unfavorable and restates the issues that still have to be dealt with in your case (for example if your income is understated or if the trustee feels that your expenses are too high or luxurious; you may have to show proof of particular expenses in order for the Trustee to allow those expenses, or if any amendments need to be filed in your case). Your creditors have approximately five months from the date of filing to file claims in your case. The first Confirmation Hearing is usually continued for a variety of reasons. If your case is for 100% repayment, you need to wait until the last date for your creditors to file a claim in your case to see how many claims were filed. Once your case is confirmed, your payments to the Trustee are determined and in about a month you will receive an Order of Confirmation spelling out the contents of your plan, its duration, and who is entitled to receive the distribution of funds from the Trustee. You can set your payments to automatically withdraw from your bank account. Please note that you might be required to surrender your tax refunds to the Trustee for the duration of your Chapter 13 Plan.

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