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Chapter 13 Bankruptcy Process and Procedure (The Beginning)

Posted by attorney Andrew Hawes

Credit Counseling Education Course

As in Chapter 7 bankruptcy, a debtor must complete a credit counseling course within 180 days prior to filing a bankruptcy petition. A debtor must obtain a certificate of completion of this course, and the debtor must file this certificate with the petition.

Filing the Bankruptcy Petition

A chapter 13 case begins by filing a Chapter 13 petition. The debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). The debtor must also file a certificate of completion of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. 11 U.S.C. § 521. The debtor must further provide the chapter 13 case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began).

Completing all of these forms and paperwork requires a lot of information. We recommend the debtor gather the following information to give to their attorneys: 1) A list of all creditors and the amounts and nature of their claims; 2) The source, amount, and frequency of the debtor's income; 3) A list of all of the debtor's property; and 4)A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.. Even in the situation where only one spouse is filing, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

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