As bankruptcy laws are changing, many people find that they are not eligible for Chapter 7 bankruptcy, and are forced into a Chapter 13 filing. When filing Chapter 13, you enter into a payment plan that allows you to repay part or all of your debt, while keeping your assets. If you have significant assets and enough steady income to repay your debt, Chapter 13 may be a good option.
Filing Chapter 13
The Chapter 13 process starts when you file a petition with forms documenting your debts, expenses, assets and income. Filing Chapter 13 requires that you file a payment plan with or immediately after the petition, to be approved by the court. A court-appointed trustee manages your case, and disburses your monthly payment to your creditors.
Chapter 13 and the Automatic Stay
Filing for Chapter 13 bankruptcy protection will result in an automatic stay, or a court order that bars your creditors from garnishing wages or taking other actions to collect money from you. The stay remains in effect throughout the bankruptcy process, making Chapter 13 a way to keep your home out of foreclosure–as long as you make the required payments.
The Trustee’s Creditor Meeting
After you’ve filed for Chapter 13 bankruptcy, your court-appointed trustee holds a creditors’ meeting, where you appear to address any questions and resolve any problems with your repayment plan. When the creditors’ meeting is over, the court schedules a confirmation hearing, where the feasibility and practicality of your plan is assessed.
The Rest is up to You
If your Chapter 13 bankruptcy is approved by the court, it is your responsibility to stick to the repayment plan. You must comply with the repayment terms set forth in the plan, and you cannot incur new debt during the repayment phase. If you finish your plan properly, any remaining debt is discharged.
Laws may differ depending on where you live, but in most places in the US, bankruptcy laws are too complex for you to handle the process on your own. If you need help with a Chapter 13 filing, call Bankruptcy Attorneys in Jackson, MS today.