When a debtor decides to file for Chapter 13 bankruptcy there is process they must follow. Below we break down the Chapter 13 bankruptcy process into seven simple to understand steps.
Step 1: First discuss with your bankruptcy attorney all of your bankruptcy options, including Chapter 7 bankruptcy. Although Chapter 13 bankruptcy is a viable form of handling your debt make sure that it is the right bankruptcy chapter for you.
Step 2: Speak with your bankruptcy attorney to make sure that you are in fact eligible to file Chapter 13 bankruptcy. Debtors who file Chapter 13 bankruptcy must not have unsecured debts that are more than $269,750 or secured debts that are more than $807,750. If the debtor has filed for bankruptcy before and the case was dismissed, they cannot file bankruptcy again until after 180 days have passed.
Step 3: Once your eligibility for Chapter 13 bankruptcy has been established you must give your bankruptcy attorney information about your current income, assets, liabilities, expenses, unexpired leases and executor contracts so that he/she can file this information with the bankruptcy court.
Step 4: If you bankruptcy attorney has not included a proposed plan of repayment with the bankruptcy petition, he/she must do so within 15 days of filing bankruptcy on your behalf.
Step 5: After about 20 days of filing the bankruptcy petition, the debtor will he called to attend a "meeting of creditors" where he/she will answer questions about his/her finances and debts.
Step 6: Once the debtor's repayment plan has been reviewed by the bankruptcy trustee, he/she will need to attend the confirmation hearing. At the confirmation hearing the bankruptcy trustee will either approve or disapprove of the bankruptcy repayment plan. Also, some creditors may object to the confirmation of the bankruptcy plan if they feel that it does not treat them fairly.
Step 7: Once the debtors Chapter 13 bankruptcy repayment plan is approved, he/she must begin making monthly payments to the bankruptcy trustee within 30 days. Failure to make agreed upon payments to the bankruptcy trustee could result in the dismissal of your bankruptcy case.