You will need to obtain copies of your credit report from the credit reporting agencies Experian, TransUnion, and Equifax. You can get a copy of your credit reports for free once per year. Keep in mind that not all of your debts will be listed on your credit report. Keep a list. In addition to obtaining your credit report, you will need the following documents:.
These documents will help you get a complete and more accurate picture of your finances. Having them readily available will make filling out your bankruptcy forms that much easier. Next to each debt, write in what type of debt it is. Is it a credit card debt? Is it a medical bill?
A payday loan? Secured debts are debts attached to some type of collateral. Your mortgage or car loan are two of the most common examples of secured debts. Unsecured debts include credit card debts, medical bills, payday loans, and any other debt not attached to a specific piece of property. The next step in analyzing your debts is to determine which debts are priority debts and which debts are non-priority debts. Common priority debts are child support payments, domestic support obligations, and certain tax debts.
Whether your debts are secured or unsecured, priority or non-priority, will impact your repayment amount and the order in which your trustee will distribute your Chapter 13 plan payments each month. Make a list of all the property you own and how much each item is worth. This step is important because you will need to know what you have, and how much of it you can protect using bankruptcy exemption laws. Although filing a Chapter 13 bankruptcy allows you to protect and keep all your property, your Chapter 13 plan will require you to pay certain creditors an amount that is equal to the value of your unprotected property.
In other words, you can expect to pay an amount equal to the amount certain creditors would be getting if you had filed a Chapter 7 case. You can file a Chapter 13 bankruptcy if you are unemployed. However, you must be receiving income from another verifiable source other than from employment. If you receive government benefits, financial assistance from friends or family, or monthly pension payments, for example, you will be able to file a Chapter 13 if you can show that your income is enough for you to make monthly plan payments.
Once you create a budget and discover that you don't receive enough income each month to pay your monthly living expenses in addition to your Chapter 13 monthly plan payments, you will not be able to proceed. The course takes approximately one hour and can be completed online or by telephone. You will need to keep a copy and file it with your bankruptcy paperwork. This will most likely be the most time-consuming step of the bankruptcy process.
Trustee appointed a few days after you file petition The court will designate a trustee to oversee your case. Court sends notice of Chapter 13 Case a few days after you file Chapter 13 plan This notice is sent to you and your creditors. Creditors file optional objections Creditors may submit written objections to your repayment plan at least 25 days in advance of your confirmation hearing.
Submit tax return You must submit your most recent return to your trustee at least seven days before the first meeting of creditors.
Begin making payments under repayment plan If your plan is approved, you must begin making payments within 30 days of filing.
Photo courtesy of: rf 8. File modified plan optional If you decide to modify your repayment plan, you must send a copy of the new proposed plan to all of your creditors.
Confirmation hearing This hearing is typically held days after the meeting of creditors, but can take place sooner, if the court requests it, and if no one, including you, objects to the earlier date. Submit annual income and expense statements each year plan is in effect, if required If the court, your trustee, the U.
Court grants discharge If you abide by your repayment plan, you can obtain discharge within 36 to 60 months. If you liked this post, you might also like: Bankruptcy Discrimination: Is it Legal? Request Consultation. A few exceptions to the automatic stay exist and some creditors might ask the court to remove the stay.
Learn more in Bankruptcy's Automatic Stay. You make your first plan payment. Even though your plan will not yet be confirmed, you must begin making payments about one month after you file your papers.
Attend the meeting of creditors. Also called the hearing, the bankruptcy trustee conducts the meeting of creditors in a room other than a courtroom. The trustee will ask you a series of questions about your papers and finances. Creditors can ask questions too, and may object to your proposed plan. Find out more in What to Expect at the Meeting of Creditors. Attend the confirmation hearing. You or your attorney must go to one court hearing, called the confirmation hearing.
This is where the court will address any plan objections made by either a creditor or the trustee. If all goes well, the court will confirm your plan.
File or object to proofs of claim. Creditors file proof of claim forms so that they can get paid. You can object to a proof of claim. And if an important creditor doesn't file one, you might want to file one for the creditor yourself so that you can pay the debt as part of your case. Comply with plan requirements and payments.
As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.
Chapter 13 also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any individual who is liable along with the debtor. Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose.
Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition.
The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 filing. Between 21 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. If the U. During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions.
The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan. If a husband and wife file a joint petition, they both must attend the creditors' meeting and answer questions. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the creditors' meeting.
The parties typically resolve problems with the plan either during or shortly after the creditors' meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.
In a chapter 13 case, to participate in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. A governmental unit, however, has days from the date the case is filed file a proof of claim. After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor's chapter 13 repayment plan.
Unless the court grants an extension, the debtor must file a repayment plan with the petition or within 14 days after the petition is filed. A plan must be submitted for court approval and must provide for payments of fixed amounts to the trustee on a regular basis, typically biweekly or monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which may offer creditors less than full payment on their claims.
There are three types of claims: priority, secured, and unsecured. Priority claims are those granted special status by the bankruptcy law, such as most taxes and the costs of bankruptcy proceeding.
In contrast to secured claims, unsecured claims are generally those for which the creditor has no special rights to collect against particular property owned by the debtor.
The plan must pay priority claims in full unless a particular priority creditor agrees to different treatment of the claim or, in the case of a domestic support obligation, unless the debtor contributes all "disposable income" - discussed below - to a five-year plan.
If the debtor wants to keep the collateral securing a particular claim, the plan must provide that the holder of the secured claim receive at least the value of the collateral. If the obligation underlying the secured claim was used to buy the collateral e. Payments to certain secured creditors i. The debtor should consult an attorney to determine the proper treatment of secured claims in the plan. The plan need not pay unsecured claims in full as long it provides that the debtor will pay all projected "disposable income" over an "applicable commitment period," and as long as unsecured creditors receive at least as much under the plan as they would receive if the debtor's assets were liquidated under chapter 7.
If the debtor operates a business, the definition of disposable income excludes those amounts which are necessary for ordinary operating expenses.
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