CHAPTER 13 Bankruptcy – Procedure

9 Jan

CHAPTER 13 Bankruptcy – Procedure

  1. Step One – Initial Consultation

  2. Step Two – Credit Counseling Course – – $14.95 – In order to file a bankruptcy a debtor must complete a pre-filing course. The court is about 45 minutes long and is usually done on line. They will ask for financial information similar to what I asked at the initial consultation. Afterwards they will provide budget recommendations for your situation. Most of my clients find that the first course is beneficial. IT IS IMPORTANT THAT YOU EITHER CALL OR HAVE A TEXT SESSION with one of their counselors. After the session they will issue a certificate that I file with the bankruptcy.

  3. Step Three – Signing Consultation – bring Tax Return, 2 months pay stubs, debts (a debt list with name of creditor, year incurred, and est. amount or the bills). If being garnished, bring the fax number to your payroll. The court costs are due at this point. I do not ask for an initial fee in a chapter 13 if I believe that there is a good chance of success. If I think there is not a good chance of success (and I would tell you ahead of time) I usually would ask for an initial fee at this point. That initial fee is deducted for the fee that would be in the plan payment.

  4. Step Four – Case Filed– once the case is filed an automatic stay goes in effect that prevents most creditors from doing collection actions during the bankruptcy.

  5. Step Five – Wage Order Comes into effect – If you are working the payments will starting coming out of your paycheck. It is important to remember that until that happens you are responsible for making the payment yourself. The first payment is due 30 days after the filing of the case or the conversion to a chapter 13.

  6. Step Six – 341 Hearing – bring ID, Social Security Card, and Last Bank Statement

  7. Step Seven – Objection to Chapter 13 Plan – The trustee will often object to issues in the plan. Often times they want a document or they want a different allocation of funds in the plan. Sometimes they do ask for an increase in the monthly plan. If the request is legitimate, we will file an amendment to the bankruptcy petition, provide the information, or modify the bankruptcy plan. This should be done before the confirmation hearing.

  8. Step Eight – Confirmation Hearing – This is when the court approves or denies your plan. It is important to remember that the court will deny the plan if the plan payments are not current. The court may grant a continuance of the hearing to correct any deficiencies to the plan. If the plan is approved then it becomes the basis of the chapter 13 until the case is over.

  9. Step Nine – Payment Period – Fairly straight forward. This is when the payments of the Chapter 13 are made to the trustee.

  10. Step Ten – Financial Management – $9.95 – notify us when you have done your course!!!! (If course is not done before discharge date, the court can close the case. The court costs for reopening a case is 260 dollars). The course is typically 2 hours and involves mostly reading on-line. There is typically a simple quiz at the end. Most companies including the one I have recommended will allow you to do the course in sessions. I am not aware of any chat session or phone call that is required.

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  12. Step Eleven- Discharge – (approx. 60 days after 341 Hearing). – This is the order that tells the creditors that you do not owe them anymore. You will be issued a copy of the discharge through the mail along with a list of everyone who is getting a copy of the discharge. With few exceptions, most creditors are discharged. Receiving a discharge does not necessarily means that the case is closed, but for the most part your role in it is.