How to File Chapter 13 Bankruptcy

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Do you qualify for Chapter 13 bankruptcy?
- You must have regular income.
- Your unsecured debt cannot exceed $419,275, and your secured debt cannot exceed $1,257,850.
- You must be current on tax filings.
- You cannot have filed for Chapter 13 bankruptcy in the past two years or Chapter 7 bankruptcy in the past four years.
- You cannot have filed a bankruptcy petition (Chapter 7 or 13) in the previous 180 days that was dismissed for certain reasons, such as failing to appear in court or comply with court orders.
How do you file for Chapter 13 bankruptcy?
- Credit counseling: Complete pre-filing bankruptcy counseling through a nonprofit credit counseling agency. Your counselor may also help you draft a repayment plan.
- Get an attorney: Hire a qualified bankruptcy attorney. Chapter 13 is very complex, and skipping a step or improperly filling out a form can lead to your case being thrown out or not having certain debts covered.
- Fill out paperwork: Your attorney will help you fill out the various forms required to file. You’ll need to gather information on your whole financial picture, including debts, income, property and monthly expenses.
- Submit bankruptcy petition: Also known as “filing” the bankruptcy, submitting the various forms kicks off the process. A bankruptcy trustee will be appointed. As soon as you file, you enter what’s called an “automatic stay,” which means that most attempts to collect on your debts must cease.
- Submitting payment plan: Within 14 days of filing the petition, you must submit a proposed payment plan. You must start making payments on the plan within 30 days of filing the petition, even if it hasn’t been approved yet.
- Meeting of creditors: Between 21 and 50 days after filing the petition, the trustee will host a meeting in which creditors can discuss any issues they have with you.
- Confirmation hearing: No later than 45 days after the meeting of creditors, you, the trustee and creditors who wish to attend meet in court to confirm the payment plan.
- Payment: Over three to five years, creditors are paid as agreed under the plan.
- Debtor education course: Before the Chapter 13 bankruptcy is complete, you must complete a “debtor education course” from a nonprofit credit counseling agency.
Is Chapter 13 bankruptcy right for you?
- You want to keep certain assets or you’re behind on your mortgage or car payments and want to make them up over time.
- Most of your debts are student loans, child support or other debts that either can’t be or are highly unlikely to be discharged under Chapter 7.
- You have a co-signer on an account in arrears. With Chapter 7, creditors are free to go after your co-signer even though you’re protected. If you file Chapter 13, you can arrange to pay off the co-signed debt in your repayment plan, protecting your co-signer.