THE CHAPTER 13 PROCESS

23 Dec

THE CHAPTER 13 PROCESS

STEP ONE – INITIAL CONSULTATION

WHERE – East Side Office – 22408 Lake Shore, Euclid, OH 44123 or West Side Office – 13326 Madison Avenue, Lakewood, OH 44107.

WHAT DO I BRING – 2 Paystubs, Tax Return, and a List of Debts, the bills, or your credit report.

WHAT ARE WE DOING AT THIS CONSULTATION – We are going over your financial position to determine if you qualify for a Chapter 7 or Chapter 13 bankruptcy. In a Chapter 13, a key issue is what the plan payment will be. We will try to do an analysis of your debt (more so than we would in a Chapter 7 Bankruptcy. Therefore it is important that you bring information on your secured debt.

Fee – No, this is a free consultation and you are not obligated to go any further.

How Long – 45 mins to 1 Hour

STEP TWO – CONSUMER COUNSELING COURSE

WHERE – Online Course

Recommended Course – DebtorCC – www.debtorcc.org – cost $14.95

List of Other Approve Companies – United States Trustee ListNote – We are in the Northern District of Ohio

WHY DO I HAVE TO DO THIS – Under the Section 109(h)(1) of the Bankruptcy Code a debtor must take this course to qualify to file for bankruptcy. If the case is filed without the certificate, it will be dismissed.

STEP THREE – SIGNING CONSULTATION

WHERE – East Side Office – 22408 Lake Shore, Euclid, OH 44123 or West Side Office – 13326 Madison Avenue, Lakewood, OH 44107.

WHAT DO I BRING – I typically give you a customized list. However every case requires the most recent tax return, 2 months of pay stubs, the debts you want to include on the bankruptcy, and a copy of your car title.

WHAT ARE WE DOING – We are reviewing our notes from the Initial Consultation (Step One) and we are preparing a document called a bankruptcy petition. Since this is a Chapter 13 we are also putting together a Chapter 13 Plan. We will list all your assets and debts into the petition and its total length is about 60-70 pages in most cases. I will also be copying documents that you bring with you. Finally at the end, we will sign the document, and if everything is in order, file the case. (Step Four).

HOW LONG DOES THIS MEETING TAKE? – 2 – 3 Hours.

FEES – Typically I would ask for the pre-filing fee at this point. The remaining amount of the bankruptcy fee will be provided as a claim in the bankruptcy plan. Court costs should also be paid at this moment, however, it makes sense at time to enter an installment plan with the court (though this is more difficult to do in a Chapter 13.

STEP FOUR – CASE FILED

WHEN – Usually at the signing consultation, however if there is a need for delay (not all requirements met) we file when those requirements are met.

WHAT HAPPENS WHEN I FILE – An automatic stay is impose that prevents most collection actions (garnishments, utility shutoff’s, repossessions).

ARE THE PLAN ARRANGEMENTS MADE AT THIS TIME – Yes, we will prepare and file what is know as a wage order. It will be filed with the court, approved by the judge, and sent to your employer. They will then start making pro rata payments to the bankruptcy trustee.

STEP FIVE – FIRST PAYMENT

WHY IS THIS IMPORTANTThis is the most important step if you want a successful chapter 13. It will take about a month for the wage order to kick in. This does not excuse you from making the first payment on the bankruptcy. The plan payment is due within 30 days of filing. If you do not do this, you will be a month behind by the time the wage order kicks in. This can result in a dismissal by the time we reach the confirmation hearing.

WHERE DO I MAKE THE PAYMENT TO – Cleveland Trustee – Craig Shopneck, Chapter 13 Trustee, P.O. Box 593, Memphis, TN 38101-0593. Make sure that your case number and name must be on the check or money order.

STEP SIX- 341 HEARING

WHERE – United States Trustee Hearing Room (In Cleveland) – 201 Superior Avenue, Cleveland, OH 44114. It is on the sixth floor.

WHAT TO BRING – Your ID and your Social Security Card.

WHEN – Approximately 30-45 days after the filing of your case.

DOES THE ATTORNEY ATTEND – Yes I do.

WHAT IS THIS FOR – Under Section 341 of the Bankruptcy Code (hence the name), a court official known as a trustee has to conduct a meeting concerning your petition. The Chapter 13 341 is a bit different than a Chapter 7 341. First of all there is less emphasis on the property and more emphasis on making sure that income, expenses, and plan provisions are correct. The meetings are generally shorter and they are also less confrontational. Basically the idea is to make sure that everything is in order.live streaming film War for the Planet of the Apes online

STEP SEVEN- OBJECTION TO CONFIRMATION

WHAT IS THIS ABOUT – Usually within a few days after the 341 hearing the trustee will object to the confirmation of the bankruptcy plan. Not all cases receive an objection but most cases do. The trustee is communicating in their objection what they believe must be done before the court will confirm the case. This can include modification to the bankruptcy plan (changing the plan payment), amendment to the petition (to clarify some aspect of the case), or request for more information.

Generally if the provisions are met the Trustee will withdraw their objection (either prior to or at the confirmation hearing). Objections are written in a form format and are delivered both to the client and the attorney.

STEP EIGHT – CONFIRMATION HEARING

WHEN – Usually 21-35 days after the 341 hearing.

MUST I ATTEND – – No, just the attorney and the trustee attend.

WHAT IS THIS ABOUT? – A hearing is held in front of the Bankruptcy Judge to determine whether the plan should be allowed to continue. It is done on a motion docket, so the judge will spend about 3 – 5 minutes on each case and make rulings on motions. For the confirmation, the trustee usually goes first and recommends whether the plan should be confirmed or not. If the trustee recommends confirmation, then the plan is confirmed, and if the debtor continues to make his plan payment through the duration of the plan (between 3-5 years) the debtor will receive a discharge.

If the trustee does not recommend confirmation, then the court can and often adjourns the case so that the conditions can be met for the plan to be confirmed. If after a few tries the plan is not confirmed then the case will be dismissed.

The one exception to adjournment is when the plan is inadequately funded. At that point the court is likely to dismiss the case. If the funds become available we can file a motion to reinstate.

STEP NINE- FINANCIAL MANAGEMENT COURSE

WHERE – Online Course

Recommended Course – DebtorCC – www.debtorcc.org – cost $9.95

List of Other Approve Companies – United States Trustee ListNote – We are in the Northern District of Ohio

WHY DO I HAVE TO DO THISUnder of the Bankruptcy Code section 727(a)(11) a debtor must complete the financial management course in order to receive a discharge. Failure to do this will result in the case being closed without discharge which requires a motion to reopen (court cost $260.00)

Special heed should be taken in Chapter 13 Cases because the cases typically run 3-5 years. It is easy to forget this course at the end. It is disheartening to go through a plan paying all the money into the plan to only find out that you must pay a 260 dollar court costs to get the discharge. Therefore, do the course shortly after confirmation when you know that your plan is approved.

STEP TEN- DISCHARGE

WHEN – If the Debtor makes it through the 3-5 years of the plan and has met all the obligations of the plan, the court will discharge the case. If you had a car loan in your plan, the car should be paid in full and you should receive the title. If you were behind on your mortgage you should be caught up. You should also be current on pre-petition taxes and child support. If you made it this far, congratulations, you have put yourself in a financially good position.