Filing for bankruptcy under Chapter 13, also called a wage earner’s plan, helps people with modest incomes to build a strategy to pay back their debts. Here, debtors propose and adhere to a repayment plan as they make payments to their creditors or lender. As such, among the different types of bankruptcy, Chapter 13 is often referred to as a reorganization.

The bankruptcy petition is filed at the bankruptcy court where the debtor has an estate or property. Unless otherwise ordered by the court, the bankrupt individual generally must also file:

  • Schedule of assets and liabilities 
  • Schedule or current revenue or income and expenses
  • Executory contracts and unexpired lease agreements, if any
  • Financial affairs documents
  • Proof of credit counseling
  • A debt settlement or repayment plan
  • Proof of income 
  • Monthly income and estimated living expenses after the bankruptcy filing
  • Other documentation of eligibility

 Bankruptcy Chapter 13When filing a bankruptcy petition, make sure you fill-out all bankruptcy forms correctly and completely. Double-check the information that you will provide, particularly the list of creditors and the claimed amount of debt, the amount and source of your income, a list of your personal property, and the proposed monthly payments.   

Some bankruptcy cases involve married couples. Couples must decide if only one of them will file for bankruptcy, if they will file separately, or if they will be proceeding with a joint petition. In the first scenario, the non-filing spouse’s salary and expenses may also be required for the bankruptcy court to determine the financial status of the household. Seeking legal help from experienced bankruptcy lawyers will ensure you choose the correct bankruptcy type and that you file such correctly.

Bankruptcy law provides for what is called the automatic stay. This bankruptcy stay is put in place to stop any collection action against the individual experiencing debt problems. In general, creditors are not allowed to initiate litigation or wage garnishment, or even contact you to request for payments as the stay is in effect. 

Chapter 13 bankruptcy would also help you avoid home foreclosure. The automatic stay would stop the foreclosure proceeding right after filing for bankruptcy. You can then bring current past-due payments. Keep in mind that you can still lose your property if you are unable to give regular mortgage payments after declaring bankruptcy. 

A bankruptcy trustee is usually assigned to the individual declaring bankruptcy. He or she will set a meeting between you and your lenders. You are to respond to questions about financial agreements and proposed terms and conditions of your payment plan. The judges assigned to your bankruptcy case are not allowed to join the meeting of creditors to protect their judgment during the hearing. After a bankruptcy discharge, bankruptcy trustees often receive the debtor’s payment and allocate them to lenders or particular debt collectors.

Are you struggling with debt or have questions on the bankruptcy process in Louisiana? Consult a bankruptcy attorney that will help you fight your legal rights. Contact Orum Young Law for a case review.