If you are a debtor who is ineligible for Chapter 7 bankruptcy, Chapter 13 action serves as a viable alternative. Specifically, Chapter 13 bankruptcy is the most effective approach for homeowners looking to reorganize their debts without facing foreclosure, repossession and other harassing collection efforts.
In order to be eligible for Chapter 13 bankruptcy, an individual must earn enough income to afford their monthly post-bankruptcy debt reorganization payments as well as all current living costs. If an individual meets the qualifications under Chapter 13, the Bankruptcy Court will institute a reorganization plan that generally lasts between three to five years.
Before filing for Chapter 13 bankruptcy, a debtor must meet all pertinent deadlines in order to pursue this form of bankruptcy. For example, if your bankruptcy case is dismissed, you cannot re-file for another 180 days. Within this time-frame, you must undergo credit counseling and submit your proof of attendance with the court.
In order to obtain a Chapter 13 debt reorganization plan, there are a number of documents that must be filed with the court. These include but are not limited to the following:
- Schedules of your total assets and liabilities
- A schedule of your monthly income and living costs
- A statement of your finances
- A list of all of your creditors
- A certificate of attendance to credit counseling
- A list of the total amount of debt that is owed to all of your creditors
- A list of your monthly living costs
Once you file your paperwork with the court, an automatic stay will be issued to your creditors. This prohibits creditors from engaging in any form of debt collection activities while the stay is in effect and all of your debtors will be notified in writing about your Chapter 13 bankruptcy action. Within fifteen days of filing your petition, a Notice of Commencement of Case will be sent to you and your creditors. This provides a summary of all filing deadlines and the dates and times of all court meetings. You will also be required to submit a repayment plan with the court to address all of your debts. Once you complete your plan, all eligible debts will be discharged and any remaining debt will be subject to repayment.
To discuss the process of Chapter 13 bankruptcies further, contact us today at (562) 216-8296 for a free confidential evaluation. We work hard to eliminate your unmanageable debt!