Before filing your Chapter 13 bankruptcy
Title 11 of the United States Code sets forth the statutes governing the various types of relief for bankruptcy in the United States. Chapter 13 of the United States Bankruptcy Code provides an individual the opportunity to propose a plan of reorganization to reorganize their financial affairs while under the bankruptcy court's protection. The purpose of chapter 13 is to enable an individual with a regular sourc…
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Although, it is up to the individual debtor when he or she wants to complete the course, it’s recommended that individuals filing a Chapter 13 bankruptcy complete the course sooner rather than later.
Those who file for Chapter 13 bankruptcy must complete the class and file the certification of completion before your last repayment plan payment or before you file a motion for discharge. If you miss these deadlines, the court will dismiss your case.
A Chapter 7 case generally lasts for about 4 to 6 months, whereas a Chapter 13 case lasts for 3 to 5 years. During the 3 to 5 years you are in a pending Chapter 13 case, you will be making monthly payments to your assigned trustee.
your Chapter 13 bankruptcy Schedules A/B, D, and E/F for Lesson 1 and Schedules I and J for Lesson 3. You can get copies of these Schedules from your attorney, or the Bankruptcy Clerk for a small fee.
The Chapter 13 process The Chapter 13 filing process generally takes 95 days from the filing of the petition to the approval of the repayment plan. But the bankruptcy won't actually be discharged until the three- to five-year plan is completed. Here's what to expect over a typical Chapter 13 bankruptcy proceeding.
four yearsYou can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 filing, but if you had debts discharged in Chapter 7 and want to have debts discharged in Chapter 13, you must wait four years.
A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
Despite these potential problems, Chapter 13 bankruptcy is a good option for people with regular income who would otherwise lose their house to foreclosure or need time to pay back tax or support arrearages.
When you complete your Chapter 13 repayment plan, you'll receive a discharge order that will wipe out the remaining balance of qualifying debt. In fact, a Chapter 13 bankruptcy discharge is even broader than a Chapter 7 discharge because it wipes out certain debts that aren't nondischargeable in Chapter 7 bankruptcy.
Once your Chapter 13 proceeding closes, and you've finished your repayment plan, you'll get a discharge order that clears the remaining balance of qualifying debt. This debt includes most kinds of “non-priority unsecured debts,” including credit cards, medical bills, personal loans not secured by collateral, and more.
Can a Bankruptcy Trustee Take Your Tax Refund After a Discharge? There are two types of bankruptcy for individuals, Chapter 7 and Chapter 13. The bankruptcy trustee can keep your tax refund in both, though with Chapter 7 it will happen only once. With Chapter 13, it can happen every year of your repayment plan.
Does Chapter 13 Trustee Check Your Bank Account? Yes, it's highly likely that your appointed trustee will check both your personal bank accounts and any business-related bank accounts which you may have under your name.
Your credit score after a Chapter 13 Bankruptcy discharge will vary. Your new score will depend on how good or bad your credit score was prior to the filing of the Chapter 13 Bankruptcy. For most individuals, you can expect to see quite a dip in your overall credit score.
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.
In most Chapter 13 bankruptcy cases, you cannot finish your Chapter 13 plan early unless you pay creditors in full.
Although a Chapter 13 bankruptcy stays on your record for years, missed debt payments, defaults, repossessions, and lawsuits will also hurt your credit and may be more complicated to explain to a future lender than bankruptcy.
A Chapter 13 allows you to avoid the the potential of having your unprotected property sold by the trustee, as you'll be paying your creditors the value of your unprotected property over the duration of the Chapter 13 plan.
The first payment is due within 30 days after you file your bankruptcy forms.
Arguably, Chapter 7 bankruptcy gives you the biggest benefit because it allows you to wipe away your debts completely without having to repay any amount to your creditors. Even still, your goals and personal circumstances may not warrant filing a Chapter 7 bankruptcy.
Another major difference between a Chapter 7 bankruptcy and a Chapter 13 is the duration of the case. A Chapter 7 case generally lasts for about 4 to 6 months, whereas a Chapter 13 case lasts for 3 to 5 years. During the 3 to 5 years you are in a pending Chapter 13 case, you will be making monthly payments to your assigned trustee.
Chapter 13 bankruptcy is often referred to as a “wage earner’s bankruptcy” or a “reorganization”. In contrast to a Chapter 7 bankruptcy, a Chapter 13 requires you to repay a portion, or all of your debts back in order to successfully complete your case and receive a full discharge.
The course takes approximately one hour and can be completed online or by telephone.
The forms ask you about everything you make, spend, own and owe. There are 23 separate forms, totaling roughly 70 pages in your Chapter 13 petition. You must enter all of your financial data and be able to give the court a full and accurate picture of your financial situation. Part of filling out the bankruptcy forms in a Chapter 13 case is also drafting your Chapter 13 repayment plan.
These requirements came about due to changes in bankruptcy laws that took effect in October of 2005.
Before you file for a Chapter 13 or Chapter 7 bankruptcy, you must receive credit counseling from an approved agency. Before bankruptcy is discharged, you must attain a personal finance management course known as debtor education.
The purpose of credit counseling is to help you evaluate your financial options and determine if you can repay debts through a repayment plan without filing bankruptcy. In credit counseling, you will usually provide information regarding your income, expenses, and debts. The counselor then evaluates the information and proposes a repayment plan.
Credit counseling agencies and debtor education providers must charge a reasonable fee of $50 or less. An individual’s income that falls 150% below the poverty line is eligible for a fee waiver.
Debtor education information is meant to instruct you to be responsible with your finances. The education is meant to help you learn from past mistakes and never be in the position to file bankruptcy again.
The bankruptcy process involves making several critical decisions that will impact the amount of debt you retain, the property you can keep, and the impact on your ability to access credit later.
Also, the counseling must not be generic but individually specific to the debtor.
Those who file for Chapter 13 bankruptcy must complete the class and file the certification of completion before your last repayment plan payment or before you file a motion for discharge. If you miss these deadlines , the court will dismiss your case. To reopen it, you must repay the bankruptcy filing fee.
What Is Bankruptcy Debtor Education? In order to be discharged from Chapter 7 or Chapter 13 bankruptcy, you must complete a Pre-Discharge Debtor Education course. The purpose of this bankruptcy course is to help you remain financially secure and use credit wisely so you don’t end up in bankruptcy again.
It includes the requirement that all Chapter 7 or 13 bankruptcy petitioners complete approved credit counseling and provide to the court a certificate of completion from a U.S. Trustee-approved, nonprofit credit counseling agency. The law also requires all consumers who file for bankruptcy to successfully complete two bankruptcy courses prior to having debts discharged.
When you complete the debtor education course, you must file a form called Debtor’s Certification of Completion of Postpetition Instructional Course Concerning Personal Financial Management (Official Form 23) with the court.
Bankruptcy Education Deadlines. Those who file for Chapter 7 bankruptcy protection have 60 days after the first date set for the meeting of creditors to complete the debtor education course and file the certification of completion with the court.
With Pre-file Credit Counseling, you’ll start online, then receive a personal counseling session by telephone to discuss the details of your current financial situation with a Certified Financial Counselor. Your counselor will help you build an accurate picture of your current finances, then give specific advice on actions you can take to improve it. You’ll also discuss short- and long-term financial goals and determine if there are any alternatives to bankruptcy. The counselor will explain consequences of bankruptcy and actions you can take to get back on sound footing after a bankruptcy.
Exceptions include: being on active duty in a military combat zone. a disability that prevents you from taking the course. no court-approved course providers are available in your area. a course isn’t available in a language you understand.
The National Association of Chapter 13 Trustees is a primer on filing Chapter 13, and the National Association of Bankruptcy Trustees provides information on Chapter 7.
You are required to enroll in bankruptcy credit counseling from an approved agency like InCharge Debt Solutions and complete the course within six months of filing for bankruptcy. The court requires you to have a certificate showing you’ve passed the course before it will allow you to file for bankruptcy.
ECF stands for Electronic Case Files, and is a way documents are filed online with courts. However, the average person must take classes and be ECF certified and approved by the court to file that way. Attorneys are ECF certified; the average consumer is not. For most of us, that means finding the location of your bankruptcy court ...
It might pay to know that if you’re struggling with debt you are far from alone. Bankruptcy filings have been cut in half since Great Recession, but 752,160 cases still were filed in 2019 and that number is expected to rise in 2020.
The creditors’ meeting, called a 341 meeting, is where the bankruptcy trustee appointed to your case will ask you questions under oath about your financial situation. Specifically, the trustee will verify your identity, ask about the accuracy of your bankruptcy petition and schedules and give you the chance to reveal any changes that have taken place since you filed your documents.
Types of Online Bankruptcy. It might pay to know that if you’re struggling with debt you are far from alone. More than half a million of us filed for bankruptcy in 2020. While that number is high, total bankruptcies actually dropped 29.7% from 2019.
With Chapter 7, the court will appoint a trustee to meet with you and sell your non-exempt property. Any property deemed necessary (home, car, clothing, work-related property, pensions) will be safe, though your house can be foreclosed on and your car repossessed if you miss loan payments.
Everyone should look at the Course Requirements. You'll need speakers or headphones and your copy of your bankruptcy schedules.
Do NOT skip Step 2 above. It will be the only way to prevent technical problems before starting the course.
To receive a discharge in Chapter 7 or Chapter 13 bankruptcy, you are required to take a debtor education course after you file your case. The goal of the debtor education requirement is to educate you on making smart financial choices so that you won't have to seek bankruptcy relief in the future. When you take the debtor education course, you ...
If you don't complete the debtor education course within the specified deadlines, the court will typically close your bankruptcy case without a discharge. This means that if you want to wipe out your debts, you will need to file a motion, pay the necessary fees, and ask the court to reopen your case so that you can file ...
Regardless of the method of instruction, the course will typically last at least two hours. If you attend the course in person, an instructor will provide you with course materials and teach you in a class setting.
But the new rules published by the Executive Office for U.S. Trustees (EOUST) state that $50 or less is a reasonable fee. If a debtor education provider wants to charge more than $50, it has to get approval from the EOUST. (Learn more about the new debtor education rules .) Fee waivers.
The purpose of the debtor education course is to teach you how to manage money and use credit wisely after bankruptcy. If you don't complete the debtor education requirement, the court won't issue a discharge in your bankruptcy. Read on to learn more about the debtor education course requirement in bankruptcy.
If you complete the course over the phone, you will usually receive a workbook (or other learning materials) to follow during the session. In addition, if you take the course online or over the phone, you must also complete a test.
With a few exceptions, all Chapter 7 and Chapter 13 bankruptcy debtors must complete a course in debtor education before they can receive a discharge. (Learn more about the exceptions to the debtor education requirement .) you don't have an adequate debtor education course available in your district (this is a very rare occurrence).
In both Chapter 7 and Chapter 13 bankruptcy, you (and your spouse if you file jointly) must take two courses before you receive a bankruptcy discharge (the order that wipes out qualifying debt)—one before you file your paperwork, and another afterward. Read on to learn about the second class, a personal financial management course known by several ...
Don't miss the deadline. If you do, the court might close your case. If that happens, you'll have to reopen your case and repay the entire filing fee. In Chapter 13 bankruptcy, you must file Form 423 and the certificate no later than the date on which you make your last plan payment.
It's a financial management course that you take after you've filed for bankruptcy but before you get a discharge. The debtor education course teach es you strategies that will help you stay financially healthy after your bankruptcy.
Filing Deadlines. In Chapter 7 bankruptcy, you must file Form 423 and the certificate no later than 45 days after the date on which your meeting of creditors was first scheduled. Don't miss the deadline. If you do, the court might close your case.
In Chapter 13 bankruptcy, you must file Form 423 and the certificate no later than the date on which you make your last plan payment. You can take the course early on in your case, however, and some attorneys recommend this because the course provides information that may help you budget and complete your plan.
However, you must be allowed to pay on a sliding scale if you can't afford to pay the full price. You can take the course in a variety of ways, depending on the provider. You can find approved agencies in your area by visiting the U.S. Trustee's website. Select "Credit Counseling & Debtor Education" in the left navbar.
You are not required to provide consent as a condition of service. Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply.
What happens at my Chapter 13 341 meeting? You will receive an email or letter from our office with information on your 341 Meeting of Creditors, including the location, date and time. In most cases, this meeting will be the one and only court date you will need to attend. At this meeting, your Trustee will verify your identity by using your Driver’s License and Social Security Card. If you do not have your Social Security Card, the Trustee will accept a W2 or 1099 as proof, but you are able to request a duplicate Social Security card online if you do not have your original copy. You MUST have both your Driver’s License and Social Security Card with you when you come to the 341 Meeting or the Trustee will not hold the meeting.
Should you fall behind on any payments, the creditors can request permission from the court to start the foreclosure or repossession process . If you fall behind on any payments, either the bankruptcy payment or any payments you are making outside of the bankruptcy, you MUST let our office know.
The 341 Meeting of Creditors is an opportunity for the Trustee to review any questions he may have about your bankruptcy petition as well as your proposed Chapter 13 Plan. Someone from our office will attend the meeting with you. There should be no questions you will not have answers to.
Your Notice of Bankruptcy Case Filing is a vital and useful document that the court issues after we have filed your bankruptcy petition. In it, you will find your case number, district information as well as the date the petition was filed and often, your Trustee’s information. You can use this document to prove to anyone that you have filed bankruptcy and are under the protection of the Automatic Stay, which prohibits any creditors from contacting you or continuing with any collection actions.
In most cases, your Chapter 13 bankruptcy will last anywhere from 3-5 years.
In some cases, your mortgage or car payment may be paid through your bankruptcy payment. If so, it is important that you make your full and complete bankruptcy payment on the first of the month. If the Trustee is sending your mortgage payment to the lender, he will not process that payment to the lender until the FULL payment is made. Your mortgage payment will be late if you are making your bankruptcy payment toward the end of the month.