What is a Chapter 13 bankruptcy?
A Chapter 13 bankruptcy, sometimes called a wage earner plan, involves reorganizing an individual’s debt to pay creditors. It allows a debtor to keep property and pay certain creditors over a period of time usually 3 – 5 years. Your income will be analyzed through a “means test” to determine how much disposable income you have. Your debt, including any arrearages for secured debts, will be restructured and a plan for repayment of the debts will be proposed to the bankruptcy court. If the court approves, then you will make monthly payments to a trustee who will actually make the payments to the creditors. The goal of a Chapter 13 plan is to repay some or all of the debts in your name, possibly in better terms.
What to expect
A Chapter 13 case begins by filing a petition with the bankruptcy court, Before filing the bankruptcy petition, you must complete a credit counseling course with an agency approved by the United States Trustee and complete a debtor education course. In additional to the petition, you will also file schedules with the court that show assets and liabilities, income and expenses, contracts and leases, and a statement of financial affairs.
You can meet with one of our attorneys to determine if a Chapter 13 bankruptcy is right for you. If it is determined that Chapter 13 is the best option, then you will be required to provide information regarding your financial affairs, including income, taxes, and debts. The attorney will take the information you give her and complete the petition and required schedules.
Once the bankruptcy petition is complete, you will return to the office to review the petition to make sure that there is nothing missing or entered incorrectly. Once you have reviewed and approved the petition, the attorney will file it with the bankruptcy court. You will be given a date to appear before the trustee where you will be asked questions about your petition and make sure that the information is correct. The trustee may confirm the plan on this date or ask for more information and set another date for confirmation.
NOTICE: We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.