When you decide to proceed with a Chapter 13 bankruptcy, there are things you will need to prepare for. The bankruptcy process can be overwhelming and stressful if you are not ready for what is to come. This bankruptcy checklist can help you understand what to expect when filing for Chapter 13 bankruptcy.
Determine if Chapter 13 Is Your Best Option
When claiming bankruptcy, you have two options. You can either claim Chapter 7 or Chapter 13. The first step in claiming Chapter 13 bankruptcy is determining if it is the right type of bankruptcy for you to file. To do that, you must familiarize yourself with the differences between the two. You can determine if Chapter 13 is your best course of action here.
Calculate Your Debt
When claiming Chapter 13 bankruptcy, you will be entering a repayment plan. Before you do this, you should calculate your debt to determine whether or not repayment of the debt is a feasible option. Once you have the big picture of how your debt really looks, you will know whether or not Chapter 13 is the right route to go.
Calculate the Total Value of Your Property
You will want to calculate the total value of your property. If your income is more than the median for your household size for your state, your plan must last for five years. If it is not, then your plan can last for only three years. However, you can request that it be extended to five years if you wish and you need that amount of time to pay off the value of your nonexempt property, allowing your plan to be confirmed.
Complete Your Chapter 13 Bankruptcy Paperwork
After you have completed the above steps, it is time to complete your Chapter 13 bankruptcy paperwork. You may wish to enlist the assistance of an attorney for this as the paperwork can be quite confusing and it must be filled out and filed properly.
File Your Forms
Once your bankruptcy paperwork has been filled out, it is time to file them with the courts. The exact place to file will depend on where you live and filing fees may vary. If you are working with a bankruptcy attorney, he or she will handle this step for you.
Meet With the Trustee
When you file Chapter 13 bankruptcy you will be required to attend what is called a meeting of creditors. At this meeting a trustee will verify the information in your bankruptcy papers and will ask you financial questions. He or she will also determine whether or not your case is ready to be approved by the court. If the trustee believes your case is ready, the case will proceed. If he or she feels you should be paying more to your creditors, he or she can object to the confirmation of the Chapter 13 plan. The trustee will also question you under oath. It is the goal of the trustee to ensure that all of your disposable income is being paid to your creditors. If the trustee is satisfied with the plan, he or she will conclude the hearing.
Attend a Confirmation Hearing
Once your meeting of creditors and the trustee is finished you will need to attend a confirmation hearing before a judge. The judge will then finalize your Chapter 13 bankruptcy and payment plan.
Make Your Payments Accordingly
After the payment plan has been finalized, make your payments as promised throughout the duration of your payment plan period. When the payments are over, your bankruptcy will be discharged.
Receive Your Bankruptcy Discharge
Once you receive your bankruptcy discharge you or your attorney may need to file the discharge. Keep copies of your discharge in case creditors try to collect on debts they are not entitled to.