What Are The Steps to Filing A Chapter 13 Bankruptcy?

• Tax returns for the past 4 years.
• Paystubs or other proof of income for the last 6 months before filing.
• Bank account statements from the past 3 to 6 months.
• Recent mortgage statement(s) and real estate tax bills.
• Residential lease agreement – if applicable.

The only document that must be typed is the creditor master mailing list, which must be filed with the petition. Check the local rules to see how the Court wants it to look.

Completing the Bankruptcy Forms

1. Identifying Information. The Voluntary Petition for Individuals Filing for Bankruptcy form acts as the cover sheet for your paperwork.
2. Your Property.
3. Your Exempt Property.
4. Your Collateralized Debt.
5. Your Other Debt.
6. Your Contracts and Leases.
7. Your Codebtors.
8. Your Income.

between 4 – 6 months

If you file a Chapter 7 bankruptcy petition and it is a “no asset” case, your spending after filing should reflect what you stated on your schedules. If either your income or your expenses change considerably while still in Chapter 7, again, you should consult with your attorney.

between three and five years

about $500 to $600 per month

In most Chapter 13 bankruptcy cases, you cannot finish your Chapter 13 plan early unless you pay creditors in full. In fact, it’s more likely that your monthly payment will increase because your creditors are entitled to all of your discretionary income for the duration of your three- to five-year repayment period.

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. They may also give you the option to pay off the equity at a discount in order to keep the car.

Bankruptcy exemptions determine if you can keep your house, automobile, pension and retirement funds, personal belongings, etc. If the property is exempt, you can keep it during and after bankruptcy. If the property is nonexempt, the trustee is entitled to sell it to pay your unsecured creditors.

If you’ve gone through a Chapter 7 bankruptcy, you need to wait at least 4 years after a court discharges or dismisses your bankruptcy to qualify for a conventional loan. Government-backed mortgage loans are a bit more lenient. You need to wait 3 years after your bankruptcy’s dismissal or discharge to get a USDA loan.

Filing Chapter 7 bankruptcy wipes out most types of debt, including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.

The banks’ position is that all of the debtor’s assets come under the control of the bankruptcy trustee immediately after filing for Chapter 7 until the debtor receives a debt discharge, and that freezing the accounts protects the funds for the trustee.

In a Chapter 7 bankruptcy, your employer typically will not know that you filed. In a Chapter 13 bankruptcy, your employer usually will be notified because your monthly payment comes out of your paycheck.

There is no threshold amount that you need to reach to file a bankruptcy. Some chapters of bankruptcy have debt limits, but there is no such thing as a debt minimum. That being said, you certainly can and should evaluate if filing a bankruptcy makes sense in your current situation.

Cell Phones in Chapter 7 Bankruptcy The trustee appointed to oversee a Chapter 7 bankruptcy sells any nonexempt property a debtor can’t exempt and turns over the proceeds to the creditors. Most people find that their exemptions sufficiently cover all of their household goods and electronics, including cell phones.

To be eligible to file for Chapter 13 bankruptcy, an individual must have no more than $419,275 in unsecured debt, such as credit card bills or personal loans. They also can have no more than $1,257,850 in secured debts, which includes mortgages and car loans.

Generally speaking, the funds you have in your bank accounts are safe when you file for Chapter 13 bankruptcy. Chapter 13 also allows debtors to keep bank account funds in excess of the allowable exemption amount provided the excess amounts are worked into the Chapter 13 plan and paid back over the life of the plan.

If you have too much debt, you can be denied Chapter 13 eligibility. The U.S. Bankruptcy Code caps secured debts at $1,184,200 and unsecured debts at $394,725, as of 2018.

In Chapter 13 bankruptcy, you must devote all of your “disposable income” to repayment of your debts over the life of your Chapter 13 plan. Your disposable income first goes to your secured and priority creditors. Your unsecured creditors share any remaining amount.

Chapter 13 Bankruptcy If you file for bankruptcy under Chapter 13, you will get to keep all of your property, whether it’s exempt or not. In Chapter 13, you must propose a repayment plan to pay off some or all of your debt. Once you’ve made all your payments, all dischargeable debts are wiped out.

In Chapter 13 bankruptcy, you must devote all of your disposable income to your Chapter 13 repayment plan. Through the plan, which lasts either three or five years, you pay 100% of certain debts and a portion of other types of debts.

Chapter 13 cases filed with an attorney already have only a 33% success rate; that number drops to a 2.3 % success rate without a lawyer. In fact, many bankruptcy trustees will tell you they have never seen a successful Chapter 13 case where a debtor was unrepresented.

In most cases, an employer will not know that an employee has filed bankruptcy unless there is a reason for the employer to be notified. Chapter 13 Bankruptcy Plan – In a small percentage of cases when you file a Chapter 13 case, your monthly trustee payments are deducted from your payroll.

Chapter 13 Bankruptcy The trustee may conduct periodic reviews of your finances, including your business and personal bank accounts, to ensure you have sufficient cash to continue making payments as normal.

Tax Refunds in Chapter 13 Bankruptcy You’re required to contribute all disposable income to your Chapter 13 plan. If your plan pays less than 100% to creditors, the trustee can keep your tax refund. It won’t reduce your plan payment, however.

Please be aware that your trustee does not have access to your personal account. A separate account is opened to manage your bankrupt estate.

If you file for Chapter 13 and receive the bonus after filing, it may be factored into your repayment plan. This depends on if the bonus is something you normally get every year or if it’s a one-time bonus. In fact, any raise at work, overtime payments or extra income may be used to repay creditors more quickly.

CHAPTER 13 BANKRUPTCY If you have a month where you receive an unexpected lump sum or windfall, you must pay the lump sum in to the bankruptcy as well. Just like in Chapter 7 Bankruptcy, however, you get to keep whatever you win after the creditors are paid off.

While only a few states allow private creditors to garnish your lottery winnings, most states allow government agencies to collect winnings. Government agencies can do this in a situation involving unpaid childcare, debts to the state, and unpaid taxes.