Chapter 13 is referred to as a voluntary repayment plan. It allows people who have a steady source of income to devise a strategy for paying off either a portion or all of their debts. Most debtors create a 3 to 5 years repayment plan in this case. According to a chapter 13 bankruptcy, if the current income (monthly) of a debtor falls below the applicable state median, the repayment plan would be for 3 years. This repayment plan will not be extended until and unless it is approved by the court.
When it comes to financial difficulties, they can occur due to a variety of situations. Some of the common reasons for financial difficulties include losing a job, long-term sickness, divorce, natural disaster or out-of-control spending. To find some relief from your debts and to get back to normal life, you could hire a Chapter 13 bankruptcy attorney. Contact the Law Firm of John W. Lee, PC.
Chapter 13 Bankruptcy Steps
- The first step involves taking the credit counseling course. Besides, this should be done before filing the case. You must also complete all the paperwork related to your case here.
- Hire an attorney for creating a plan that satisfies all legal standards, as it would be difficult for you to do it on your own. If you can create the repayment plan on your own you can do it. Fill out all the forms given to you carefully and submit them.
- The bankruptcy papers should be submitted by your attorney or you, along with the proof that you have filed your tax returns for the last 2 to 4 years.
- A trustee will be appointed by the court for handling your case.
- Your creditor will be notified about your filing and stay by the trustee.
- You will start making your payments as per the repayment plan. If your plan is not approved the trustee will return your money back.
- Attend the creditors’ meeting. This meeting is held outside the courtroom by the trustee. During this meeting, you can expect your trustee to ask several questions about your finances. Even the creditors may ask you some questions to you. They may or may not object to your repayment plan.
- The next step includes attending the confirmation hearing where the objections made by the creditors will be discussed. The court might approve the plan if everything goes well.
- Make your payments as per the repayment plan without fail.
- Before your case ends you must complete the personal financial management class.
- Once you have completed your repayment period, you must attend the discharge hearing, which is the final hearing. If there is no discharge healing, you will receive a formal notice about it.