Chapter 13 is a valuable tool that lets individuals catch up overdue mortgage or car payments, taxes and domestic support obligations. It also applies where you have the ability to repay some or all of your debts over time. There are debt limits for secured and unsecured debts that could prevent you from qualifying for a Chapter 13; however, those limits are high. The filing fee for a Chapter 13 is $310.00, which is paid to the bankruptcy court and is in addition to attorney fees.
Like a Chapter 7 case, prior to filing, you must gather certain documentation to provide to us so we can your bankruptcy filing. All assets and liabilities must be listed. You must also participate in a mandatory Credit Counseling course prior to the filing. Immediately upon filing, a case number is assigned and creditors are then prohibited from contacting you.
However, unlike a Chapter 7, a Chapter 13 must provide for a plan for repayment. The plan must outline how each debt is going to be dealt with within the time frame allowed by Chapter 13. Your disposable income must all go to pay for these debts. Certain creditors must be fully paid back, while other debts may receive payment of only a fraction of the original debt.
About one month after your filing, a meeting with the Trustee is held to review your paperwork and your repayment plan. As with Chapter 7, your creditors will have a certain amount of time to object to the plan. Your first trustee payment is due within 30 days of the date you file for bankruptcy. At a later date, a Plan Confirmation Hearing is held to discuss any objection or changes to the plan. All payments must be made in a timely manner or you risk dismissal of your case by the court and removal of the protective automatic stay, which would allow your creditors to once again pursue you for full payment. At the end of your Plan, the Trustee will process an accounting and the court will issue a discharge if there is any remaining debt.
Under Chapter 13, you keep all of your property, both exempt and non-exempt, as long as you resume making your regular payments on secured debt and keep current under the repayment plan that you propose. A repayment plan can last for up to five years. After finishing your payments, your remaining unsecured debts are discharged.
If you need a bankruptcy attorney in upstate New York, schedule your free phone consultation today and learn about how you can obtain a fresh start.