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The Chapter 13 Bankruptcy Process

Before you can file bankruptcy, you must receive credit counseling from an agency approved by the United States Trustee’s office. We will be happy to recommend a good credit counselor or you can find one online at the United States Trustee’s website at http://www.justicegov/ust/index.htm and click Credit Counseling and Debtor Education. These agencies will most likely charge a fee for their services.

You will also be responsible for paying the filing fee for your Chapter 13 bankruptcy filing.

Understand, that every case is unique, and we will be happy to explain the process before you make a final decision on which type of bankruptcy to file. We will stand by your side and help you with all the details of your bankruptcy.

Filing Chapter 13 Bankruptcy

Filing Chapter 13 Bankruptcy is an option for debtors provided they have income or wages enough to fund a repayment plan. Bankruptcy laws have set certain limitations on both secured and unsecured debt. If a debtor is over those limits, they are not eligible to file a Chapter 13 Bankruptcy.

If you have a prior bankruptcy discharge under Chapter 7 or Chapter 13 you should consult with an experienced bankruptcy attorney to advise you of your eligibility. Please contact us to schedule a free confidential consultation. Our consultation form is available for download.

You can print it out, complete it and then bring it to your free confidential consultation.

The Chapter 13 Repayment Plan

If you file a Chapter 13 bankruptcy, the paperwork for your repayment plan will be designed while you and your attorney discuss your case.

It must be approved by the Court, but you must be ready to make the first payment 30 days from when you file your bankruptcy case.

How much you will have to pay under the repayment plan will depend on your debt level, how many debts are considered priority debts (debts that must be paid in full), your payment terms on your secured debt. It will also take into account your living expenses. The length of your repayment plan depends on how much you earn and how much you owe.

If your average monthly income over the six months before the date you filed for bankruptcy is more than the median income for your state, you’ll have to propose a five-year plan. If your income is lower than the median, you may propose a three year plan. No matter how much you earn, your plan will end if you repay all of your debts in full, even if you have not yet reached the three or five year mark.

We will work through what the payment plan will look like with you and make sure you are comfortable with it before your case is filed.

What Happens If You Can’t Make Chapter 13 Plan Payments

Sometimes situations can get the better of you even after you have filed bankruptcy. Making payments on your Chapter 13 repayment plan could become a struggle for a number of reasons, such as you lose your job six months into the plan or an unexpected illness makes you unable to work.

When this situation arises the bankruptcy trustee may change your plan, or the court might let you discharge your debts on the basis of hardship.

If neither of those options works, you might be able to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy.

It may also be better to have the court dismiss your Chapter 13 bankruptcy case (this option would mean that you still owe all of your debts, plus any interest creditors did not charge while your case was pending).

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