If you are considering filing for Chapter 13 bankruptcy, make sure you understand the process before you file. This guide lists the steps involved, from the initial filing until your debts are cleared.
1
Petition
The first step is to file a petition telling the court that you want to file for Chapter 13 bankruptcy. There are specific courts for bankruptcy, and you will need to file your petition at the correct one. In most cases, the correct location is the bankruptcy court closest to where you live. There is a filing fee. In addition to some basic information, the court wants to know what your assets are, as well as your debts.
2
Trustee
Next, the court assigns a trustee to oversee parts of your case, including any repayment plan you end up with. The trustee is neutral. They are not representing either you or your creditors. The trustee does not take the place of an attorney. If you want legal representation throughout the process (and we recommend it), it’s up to you to find a lawyer.
3
Repayment plan
In Chapter 13 bankruptcy, you and the trustee work together to set up a repayment plan. Basically, you will make scheduled payments for a set number of years (usually three to five years). Under the plan, your debts are consolidated and often reduced. After the repayment period, your remaining debts are discharged, or cleared. There are some exceptions.
4
Creditor notification and meeting
The court notifies your creditors that you are filing for bankruptcy. You will have to go to court for the “meeting of creditors.” You and the trustee attend this meeting, as well as any creditors who wish to be there. At this meeting, you will have to answer questions, under oath, about your financial situation and your repayment plan. Because it’s likely that a debt will only be partially paid during the plan, and thereafter cleared, creditors are involved in this process. They may attend the meeting to argue that they should be paid.
5
Hearing
After the meeting of creditors, you will have a court hearing at which the judge will consider your repayment plan, and hopefully approve it. Creditors are allowed to attend this hearing, and they may object to your payment plan.
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