Filing Chapter 13 Bankruptcy
How Filing Chapter 13 May Stop Foreclosure and Protect Your Future
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Chapter 13 bankruptcy can have many advantages over Chapter 7 bankruptcy, particularly possible protection against home foreclosure.
By turning to Chapter 13 bankruptcy, you may be able to stop foreclosure on your home and repossession of your car while catching up on past-due payments in a payment plan tailored to your income and living expenses.
Another advantage of Chapter 13 is the protection given to loan co-signers. You may file bankruptcy under Chapter 13 without damaging the credit of your parents or other third-party—something that can't be done under Chapter 7.
If you're considering filing Chapter 13 bankruptcy, you can talk to a bankruptcy lawyer about the process and your rights. Connect for a free case evaluation today. Simply fill out the form below to get started.
Pre-Filing Chapter 13 Requirements
Bankruptcy laws limit the amount of debt that can be included in a Chapter 13 personal bankruptcy. Unsecured debts (such as credit cards and medical bills) must be less than $360,475 and secured debts (such as homes and cars) less than $1,081,400.
In order to file a Chapter 13 petition in bankruptcy court, you must not have a recent bankruptcy filing. Your petition will not be granted if you have filed:
- Chapter 7, 11, or 12 bankruptcy within 4 years
- Chapter 13 bankruptcy within 2 years
- Any bankruptcy petition within 180 days that was withdrawn or voluntarily dismissed
If you have moved to a new state within 90 days, you may need to file bankruptcy in the state you previously lived in. A local bankruptcy lawyer can tell you more about this requirement.
Before filing, you must also complete a Credit Counseling Briefing.
This course will help you prepare for life after bankruptcy by explaining financial management, alternatives to bankruptcy, and how to do a budget analysis.
Filing the Bankruptcy Petition
Your attorney will file the chapter 13 bankruptcy petition, along with a credit counseling certificate, with the bankruptcy court. The petition will list:
- your debts and creditors
- your current monthly income
- living expenses
- property owned and value
- other identifying information
Married couples may have different options for filing, such as filing a joint bankruptcy petition, two individual petitions, or one spouse may file without the other. Whichever way, the income and expenses of each must be submitted to the court.
Once the petition is filed, the court will issue an automatic stay to halt collection actions by all creditors listed in the bankruptcy petition.
In chapter 13 bankruptcy, the automatic stay also protects co-signers on most debts.
This protection may last during the entire repayment plan. Once the plan ends, all debt will usually be considered legally repaid.
The Bankruptcy Trustee
After filing a Chapter 13 bankruptcy, your bankruptcy case will be handled by a bankruptcy trustee, who is a government agent who works with your creditors on your behalf.
Any payments you make under the installment plan will typically be made to the trustee, who will distribute them among the creditors.
Debt Discharge Under Chapter 13
When your bankruptcy petition is filed, the judge will decided the length of your repayment plan.
Bankruptcy law limits the repayment to between 36 and 60 months, or 3 to 5 years. The judge will likely consider many factors to determine the length of your plan.
So long as you continue to make monthly payments during this time, and you successfully complete a Financial Management Course, your remaining eligible debts should be discharged (forgiven) at the end of the period decided by the judge.
Connect with a Local Bankruptcy Lawyer to Discuss Filing
The process to prepare and file for bankruptcy can seem confusing and time-consuming. Any missed deadlines or mistakes may prevent you from having your petition accepted. A local bankruptcy attorney may help ease this stress by handling your bankruptcy petition for you.
You can connect with an attorney today. Simply fill out our free case evaluation form or call toll-free 877-833-2410.
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