Making the decision to file Chapter Bankruptcy can sometimes be stressful. Because additional stress is the last thing you need when you’re declaring bankruptcy, give yourself time to familiarize yourself with the process as much as possible in advance. This way, you’ll be able to plan ahead and won’t need to worry quite so much about encountering unexpected financial and logistic surprises along the way.
To help you prepare for a smooth bankruptcy, we’ve created an outline of the steps you’ll be taking in the coming months.
1. File a petition for Chapter 13 bankruptcy
2. Automatic stay issued as soon as you file petition
This stay prohibits creditors from attempting to collect on your debts immediately after they receive notice that you’ve filed. It is illegal for debt collectors to harass or otherwise attempt to collect money from you after this point. You can find more information about how to deal with debt collectors here.
3. Trustee appointed a few days after you file petition
The court will designate a trustee to oversee your case. Once your trustee has been identified, the court will send you a Notice of Appointment of Trustee to inform you.
4. Court sends notice of Chapter 13 Case a few days after you file Chapter 13 plan
This notice is sent to you and your creditors. It usually includes the following information:
- Summary of your Chapter 13 plan
- Meeting of the creditors date, time and location
- Confirmation hearing date, time and location
- Creditors’ deadline for filing claims
5. Creditors file (optional) objections
Creditors may submit written objections to your repayment plan at least 25 days in advance of your confirmation hearing.
6. Submit tax return
You must submit your most recent return to your trustee at least seven days before the first meeting of creditors. You have the right to redact, or black out, some personal information, such as your Social Security number, on the return.
7. Begin making payments under repayment plan
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If your plan is approved, you must begin making payments within 30 days of filing. If your plan is never approved, your trustee will refund your money, minus any administrative costs incurred by the court.
8. Attend creditors’ meeting within 40 days after filing petition
At this meeting, your trustee and any creditors present can ask you about information contained in the forms and documents you submitted. You’ll be required to bring any materials your trustee has requested, as well as proof that you’ve filed tax returns over the last four years. Creditors may raise objections to your plan in an effort to persuade you to change it before your confirmation hearing.
9. File modified plan (optional)
If you decide to modify your repayment plan, you must send a copy of the new proposed plan to all of your creditors. Your creditors are entitled to 20 days’ notice of any changes you make. If you file a modified plan less than 20 days before your confirmation hearing, you will need to reschedule the hearing.
10. Confirmation hearing
This hearing is typically held 20-45 days after the meeting of creditors, but can take place sooner, if the court requests it, and if no one, including you, objects to the earlier date. You or your attorney must attend. At the hearing, the court will respond to any objections your creditors and trustee raise and approve a final repayment plan.
11. Creditors file Proofs of Claim within 90 or 180 days after creditors’ meeting
Most creditors have 90 days to file claims, but any creditors that are government agencies get 180 days. Your creditors will file these Proofs of Claim to document specifically how much you owe them. If any of your creditors fail to file their Proofs of Claim, you may have to file for them within 30 days of the 90- or 180-day deadline.
12. File written objections to claims, if necessary, 30 days in advance of objections hearing
You or your trustee may file objections to your creditors’ Proofs of Claim.Try to submit objections as soon as possible in order to expedite your case, since a court hearing will need to be scheduled to resolve them.
13. Trustee sends periodic statements, usually twice a year
The statements you receive will likely include the following information:
- Which creditors have filed claims on you, and how much they’ve claimed
- How much money each creditor has received from you and how much you still owe them
14. Submit annual income and expense statements each year plan is in effect, if required
If the court, your trustee, the U.S. Trustee, or a creditor requests these statements, you’ll need to turn them in to your trustee every year until you’ve completed your repayment plan,
15. File proof of financial management course completion before last plan payment
You’ll need to use the United States Bankruptcy Court’s Official Form 23 to certify that you successfully completed a state-approved course in personal financial management.
16. Court grants discharge
If you abide by your repayment plan, you can obtain discharge within 36 to 60 months. If you successfully file for an economic hardship discharge, your case may end sooner. You may have to appear in court for a brief formal hearing before the discharge is granted. If not, you’ll receive formal notice of your discharge in the mail.
If you would like assistance filing for chapter 13 bankruptcy, contact DeLuca & Associates at (702) 252-4673 to schedule a free consultation today.