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chapter 13 bankruptcy basics
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also known as debt reorganization, is the second most common type of bankruptcy for consumers. Chapter 13 bankruptcy allows a debtor to propose a feasible plan to repay all or part of their debt over time (typically three to five years). Many chapter 13 homeowners are able to strip liens (eliminate second and third mortgages and judgment liens) when the amount they owe on the first mortgage exceeds the value of the home.
This is often better than what can be accomplished through "loan modification."
A successful chapter 13 bankruptcy case will legally excuse the debtor from having to repay any debts discharged after successful completion of the Chapter 13 bankruptcy plan. Most debtors are able to keep everything they own through asset protection laws (exemptions). If income decreases during the plan, or certain expenses increase, the plan can be modified or even converted to Chapter 7.
File Chapter 13 bankruptcy to repay creditors in 3 - 5 years. Great if you're late on the mortgage.
typical chapter 13 procedure
1. Free Consultation with Attorney Doan
We always begin by exploring your life and finances and what options you have. We'll explore Chapter 7, Chapter 13 and non-bankruptcy options such as debt-settlement or budget restructuring.
If we agree Chapter 13 Bankruptcy is right for you, we can get the case started that same day. We offer low fees and easy payment plans.
2. Case Preparation
Unless there is some legitimate reason for delaying the filing of your chapter 13 bankruptcy case, usually the sooner we file, the better. I'll pull your credit report from Experian, Equifax, and Transunion, and give you a checklist of items and a link to a questionnaire that provides me with the information I need to prepare your case for review. I'll also provide you with a link to complete your online Consumer Credit Counseling class
3. Pre-Filing Case Review
Once I have completely prepared your chapter 13 bankruptcy case, we'll review your case in detail and make sure we're both satisfied that its ready to file.
4. Post-Filing
After your case is filed, you will receive a Notice of Commencement of Chapter 7 Bankruptcy in the mail from the United States Bankruptcy Court giving you the date and time of your 341 Meeting of Creditors and your Chapter 13 Confirmation Hearing. You'll get at least 30 days notice of your bankruptcy meeting and hearing.
5. 341 Meeting of Creditors & Confirmation Hearing
Your Bankruptcy Meeting of Creditors will usually take place in a meeting room at the US Bankruptcy Court in the District where you reside.
Bring your Driver's License and Social Security Card. I will be there with you. A court-appointed trustee will ask you questions under oath about the accuracy of your bankruptcy documents that were filed with the court, and you ability to make Chapter 13 Plan Payments.
Count on attending the Confirmation Hearing with me unless I advise you otherwise. If everything is in order and there are no objections, your case should be confirmed.
Most Chapter 13 cases last between three to five years, depending upon a number of variables.
6. Bankruptcy Discharge
Upon completion of your Chapter 13 Plan, we will finalize your case by filing appropriate forms with the Court. Your discharge will come shortly thereafter.