For a debtor who is overwhelmed with debt, filing bankruptcy may be the relief they’re looking for. Most debtors file consumer bankruptcy under Chapter 7 or Chapter 13. While a Chapter 7 bankruptcy wipes out qualifying debts and eliminates liability after completing the bankruptcy process, it also means losing nonexempt property and assets that you own.
If you’re considering bankruptcy but you earn a significant income or want to protect valuable property, filing for Chapter 13 bankruptcy might be the best step for you. Chapter 13, or wage earner’s plan, is a type of bankruptcy that involves reorganizing your debt into a repayment plan to pay off your debts and eliminating the remaining debt at the end of the three to five-year plan. Read on to learn how to file bankruptcy under Chapter 13.
1. Check Your Eligibility.
The first thing you should do is check whether you’re qualified to file for bankruptcy in Chapter 13. You should meet all these requirements to be qualified to file bankruptcy under Chapter 13.
- You’re filing personal bankruptcy as opposed to business bankruptcy. Chapter 13 isn’t appropriate for businesses and companies who plan on declaring bankruptcy.
- The amount owed for your unsecured and secured debt should not exceed the specified debt limit.
- Your income is steady, and you have enough disposable income to make monthly payments after restructuring your debts.
Discuss your situation with a local bankruptcy lawyer if you’re unsure whether you’re eligible for filing for Chapter 13 bankruptcy.
2. Prepare Your Bankruptcy Petition.
Once you’ve verified that you qualify for a Chapter 13 bankruptcy filing, the next step is to fill out your bankruptcy forms. Filling out bankruptcy petitions requires you to provide paperwork regarding your monthly income and living expenses, as well as a list of all secured and unsecured debts along with their creditors. You’ll also need to list all owned assets and personal property, along with a list of exempt property that you wish to claim under bankruptcy exemptions.
3. Attend Mandatory Courses.
In bankruptcy filings, debtors are required to complete pre-filing and post-filing courses. Make sure to have completed a credit counseling course before you filed for bankruptcy since you should file the certificate of completion along with your bankruptcy petition. Similarly, you must complete a debtor education course and file it to the bankruptcy court before you can receive your bankruptcy discharge and wipe out your debts.
You’ll need to pay the appropriate fees after filing your petition to the court. If you’re unable to pay the filing fees, talk to your bankruptcy attorney about the possibility of submitting a waiver.
4. Propose and Follow Your Repayment Plan.
The repayment plan is a major component of the Chapter 13 bankruptcy proceeding. You need to come up with a plan to repay your qualifying debt while making sure that the monthly payments are feasible given your financial situation.
You’ll propose this plan to the court, and your claim holders and the bankruptcy trustee will have an opportunity to object. Once the bankruptcy judge approves your repayment plan in a confirmation hearing, you’ll be able to start making payments.
If your circumstances change and these affect your ability to follow the confirmed plan, it’s best to seek legal advice from bankruptcy lawyers about steps you can take rather than to stop making payments to your plan.
5. Receive Your Bankruptcy Discharge.
After you pay all qualifying debts according to your payment plan and completing a budget counseling course, you’ll receive your discharge in bankruptcy. As long as you meet all requirements, the remaining balance on your qualifying dischargeable debt gets wiped out.
If you’re considering filing for Chapter 13 bankruptcy, it’s important to start your bankruptcy process the right way. Contact E. Orum Young Law Offices to get in touch with experienced bankruptcy attorneys and get a free case review today!