A Chapter 13 bankruptcy allows you to possess your property but pay back your debt obligations over a 3-year to 5-year term. A repayment plan is created so that you can use your income to gradually eliminate your debts. Chapter 13 is considered reorganization bankruptcy because you pay back your obligations over time but still keep your relevant assets.
Since there are other options for bankruptcy, it’s in your best interest to evaluate which bankruptcy is an appropriate match for your financial needs. If Chapter 13 is best suited for you, this article will give you an idea of what to expect in your bankruptcy case.
Decide if Chapter 13 is right for you: Learn the details of Chapter 13 bankruptcy law to decide whether it's right for you. Explore other options, like payment deferments, Chapter 7 bankruptcy, and Chapter 11 bankruptcy, before you choose Chapter 13 bankruptcy.
Calculate your debt: Chapter 13 bankruptcy law requires you to follow a payment plan. If your debt total is too high, the court may deem you ineligible or unable to formulate a feasible repayment plan.
Weigh your income against the payment obligations set up in your Chapter 13 payment plan: If you don't have a sufficient income to meet your repayment plan demands, the court will not let you proceed.
Calculate the total value of your property: This will enable you to determine how much of your property is exempt, which will factor into your payment arrangement under the Chapter 13 payment plan.
Complete your Chapter 13 bankruptcy law paperwork: After you have determined whether you are eligible, you must provide all of your financial information on the appropriate forms and devise your repayment plan.
File your forms: Once you have completed your Chapter 13 bankruptcy forms, you must file your forms and plan the procedure from there with the court.
Meet with the trustee: Shortly after you file, you must meet the trustee at the courthouse and review your paperwork and plan. Creditors may appear at this meeting to ask you questions or even negotiate the terms of your repayment plan.
Attend a confirmation hearing: Soon after you meet with the trustee, you will have a confirmation hearing. At this hearing, the bankruptcy judge will rule on whether to confirm your plan. Your creditors can raise objections to your plan at this hearing, and the judge will make rulings on them.
Make your payments accordingly: Within 30 days of your confirmation ruling, you must begin making payment plans according to your repayment plan. Be prepared to return to court should any issues come up during your case. Be sure to stay current on your payments. If you consistently miss your payments, your case will be dismissed.
Finally, receive your bankruptcy discharge: Once you complete your repayment plan, having successful made all of the payments, you will receive your bankruptcy discharge. This is the discharge that you have been waiting for, which relieves you of all of the unsecured debts you listed in your plan. So long as you have made all of the promised payments, you are done.
Contact a qualified bankruptcy attorney to find out your options for navigating the best path forward.