Bankruptcy

Chapter 13 Bankruptcy: The Process

By admin

Curious about Chapter 13 bankruptcy? Talk to a bankruptcy lawyer about whether it could help you.

Chapter 13 has helped many resolve their debts and save their homes from foreclosure. Here?s a bit more on the process and what you may expect:

Credit counseling briefing: This is a pre-filing requirement for all filers, and it?s designed to make sure your financial situation demands the protection of bankruptcy (and not, say, debt negotiation). Once your lawyer files your certificate of completion with the court, your case can officially begin.

Automatic stay: As soon as your case is filed, the automatic stay takes effect and prevents your creditors from making any collection actions. This means that foreclosure, garnishment, lawsuits and repossession are all halted. As long as you adhere to the terms of your bankruptcy case, the stay should last for the duration of your case.

The next three to five years: One of the papers your lawyer will file with the court will be a repayment plan. This plan provides a repayment schedule that you?ll stick with to catch up on your past-due balances while staying current with other payments.

Your bankruptcy trustee: This is a federal employee who will be assigned to your case to oversee your paperwork and distribute your money to your creditors every month.

The first payment: You must make your first payment (as part of the repayment plan) within 30 days of filing your petition ? otherwise, the court may decide to dismiss your case.

Meeting of the Creditors: Within six weeks of filing your petition, you?ll have to testify to the completeness and accuracy of all information in your petition. While all your creditors are invited, most probably will not attend.

Financial management course: Before you?re eligible for your bankruptcy discharge, you must complete a financial management (debtor education) course. The course is designed to help you learn strategies for handling money, working with credit and generally making your fresh financial start a success.

Five years after filing: You?re required to make your final payment within five years of filing your petition. After doing so, you?ll receive your bankruptcy discharge and officially be out of bankruptcy.

The Next Four Years: You are not eligible for Chapter 13 bankruptcy protection if you?ve filed for bankruptcy in the past four years, so make sure you fill your bankruptcy lawyer in on your financial past when discussing your case.

Full post as published by The Bankruptcy Blog on March 30, 2009 (boomark / email).