If you’re considering filing for personal bankruptcy, the two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13 of the bankruptcy code. Chapter 7 is a quicker bankruptcy process, while Chapter 13, which entails debt reorganization, is a more involved undertaking. Chapter 13 filers are made to pay a portion or all of their debt through a repayment plan that lasts three to five years.
Chapter 13 Filing Process
Debtors aren’t required to hire a bankruptcy attorney when they file for bankruptcy, but it’s prudent and recommended to do so. It’s almost imperative when filing under bankruptcy chapter 13, so let that be your first step, preceding the following event sequence.
- Document gathering – At first consultation, your bankruptcy lawyer will advise you on bankruptcy information you need to collect, such as pay stubs, tax returns, statements from your various bills, banking, investment, and retirement accounts.
- Credit counseling – This has to be done before filing. Find a certified credit counselor. After your session, you will be issued a certificate that you must include in the paperwork when you file your bankruptcy petition.
- Paperwork review and filing – Your bankruptcy attorney will review your information and help you procure the necessary paperwork for your petition for bankruptcy. Based on the same information, your lawyer will also will calculate a debt payment plan.
- First plan payment – This is due 30 days after filing the bankruptcy case. It can be done through an online payment option, money order, checking account debit, or payroll deduction, depending on what your bankruptcy trustee requires. Remember to also stay current with obligations not included in your plan, e.g. car loan or mortgage payments.
- 341 meeting of creditors – About a month after you file bankruptcy, you and your lawyer will have to meet with the bankruptcy trustee assigned to your case. Despite its name, creditors rarely show up. You have to answer questions from the trustee on record and under oath. The trustee makes sure that you understand the plan, as well as the policies and procedures involved.
- Education course – Bankruptcy cases entail completion of a financial management course. It may be done online or over the phone. The bankruptcy court won’t discharge a debt unless a debtor education course certificate is filed.
- Plan confirmation – A few months after you file a bankruptcy petition, there will be a hearing for the approval of your plan, which must meet various requirements, such as providing payment for overdue alimony, child support, income tax, and other debts that must be prioritized. Arrears on secured debts must also be paid if you intend to avoid foreclosure or repossession. Your income must, of course, be sufficient to make the plan feasible.
- Claims resolution – Claims from creditors must be filed with the court. You and your lawyer must go over them to make sure that they’re correct and documented. In case of justified objections, you may have to adjust your plan to accommodate them.
- Trustee check-ins – In the duration of your three-to-five-year plan, your trustee will check in with you by asking you to provide tax returns copies or confirmation from creditors that your monthly payments are up to date.
- Discharge preparation – Upon nearing the end of your case, you will have to file a certification, proving that your debt payments are current, all your tax returns are filed, and all your financial obligations are met.
- Bankruptcy discharge – When you’ve fulfilled your payment plan, filed the correct certifications, and completed your financial management course, the court will issue a discharge that will wipe out all qualifying debts.
Seattle Chapter 13 Lawyers
Chapter 13 bankruptcy proceedings can be complex and quite daunting. Bankruptcy lawyers can guide filers through the experience so that they do every step correctly. If you need to file for bankruptcy under Chapter 13, call us at Northwest Debt Relief Law Firm and talk to one of bankruptcy attorneys for legal advice and assistance.