STEPS IN A CHAPTER 13 BANKRUPTCY
If you are planning on filing for bankruptcy, we recommend you familiarize yourself with the steps involved in the bankruptcy process. Becoming aware of your legal rights and gaining an understanding of what is expected of you at each step of the way will go a long way towards helping you attain true debt relief. Each type of bankruptcy has different steps which must be followed before a debtor will be able to eliminate or significantly reduce a large portion of debt.
For those who are considering Chapter 13 bankruptcy, the following are the steps which must be taken before a judge will consider granting your discharge:
- You must first gather the documentation and information necessary to submit your Chapter 13 petition. While this is a step which does not require representation from an attorney, we strongly advise you retain counsel to help you protect your interests. We will also be able to help you come up with a repayment plan which not only fits within your budget, but also allows you to obtain the most optimal results.
- As soon as your petition has been filed, an automatic stay will be issued. This will prevent creditors and debt collectors from continuing with their collections actions. It will also put a temporary hold on foreclosure proceedings, wage garnishments and other ongoing legal action.
- Once a trustee has been appointed to your case, you will receive notification from the court.
- A "Notice of Chapter 13" will then be sent to each of your creditors to advise them of the bankruptcy, providing them with a summary of your Chapter 13 repayment plan, inform them as to the date of the upcoming meeting of creditors and confirmation hearing, and give them the deadline by which all claims must be submitted.
- The court will then review any written objections received by your creditors.
- Providing your repayment plan is approved, you will begin making payments to creditors through the bankruptcy trustee. In rare cases where a repayment plan is not approved, any money which you have already paid will be returned to you, minus any administrative or court fees.
- The meeting of the creditors is when creditors can challenge your claims and ask questions about your proposed repayment plan. It is not uncommon in these meetings for a creditor to try and get you to modify your plan in their favor prior to the confirmation hearing taking place.
- After the meeting of the creditors, you will be given the opportunity to submit a modified repayment plan, if you wish to do so.
- Once the court has received all of the above documentation, the confirmation hearing will be held. At this hearing all creditor objections will be addressed and the court will approve your plan for repayment.
- Creditors are then required to file Proofs of Claim with the court. As these claims come in, and throughout the duration of your bankruptcy the trustee will periodically send you a statement so you know who has submitted claims, how much the claims are for and how much has been paid out to each creditor. You will also receive an update on the remaining balance due.
- During the course of the bankruptcy, which can generally be expected to last 3-5 years, you will be required to provide the trustee with annual income and expense statements.
- Towards the end of your bankruptcy, you will need to complete a personal financial management course and file a certificate showing you have done so.
- At the end of your repayment plan, the court will grant your discharge.
Chapter 13 is a type of bankruptcy that can allow individuals to retain possession of their property, assets and other valuables, while still being able to restructure existing debt so as to get it paid off within a reasonable period of time. This is a very effective way for those who have the financial means, to get out of debt and be given a fresh financial start.
Our firm handles all different types of bankruptcy cases, including those involving Chapter 13. We have a comprehensive understanding of this particular debt relief process and we have helped countless individuals alleviate their financial concerns by seeking bankruptcy protection. If you are planning on filing for bankruptcy, call the David McCormick Law Group right away so that we can advise you of your legal options, help you determine which type of bankruptcy is right for you and guide you through the entire bankruptcy process. A Virginia Beach bankruptcy attorney stands ready to answer your questions and assist you with all of your bankruptcy needs.