How do I file Chapter 13 bankruptcy?
If filing Chapter 13 bankruptcy is the right decision for you there are several steps you must complete. First, it's generally a good idea to talk to a bankruptcy lawyer. They can review your financial information, help you complete the bankruptcy petition and appropriate forms, create the debt repayment plan and answer your questions. Other steps which you will need to complete are detailed below.
1. Take the credit counseling course.
Prior to filing your bankruptcy petition you will be required to complete a credit counseling course. The course will provide information to you about whether or not bankruptcy is the right step, the consequences of filing bankruptcy, and available alternatives. Credit counseling must be completed with an approved nonprofit budget and credit counseling agency within six months of filing.
2. Complete the bankruptcy petition and forms
The second step is to complete the official bankruptcy forms and file them with the appropriate bankruptcy court. As mentioned above, if you hire a bankruptcy lawyer they will help you with this step. The official forms can be found on the U.S. Bankruptcy Courts website: http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx. Search under the links to the right titled: Part I - Official Forms, Instructions, and Committee Notes and Part II - Procedural Forms and Instructions.
Also talk to the local bankruptcy court to determine if they need any additional forms. General forms which are needed to file Chapter 13 bankruptcy include schedules and the bankruptcy petition.
3. Complete the Chapter 13 Debt Repayment Plan
Next, you must complete the debt repayment plan and file the plan with your Chapter 13 bankruptcy petition. The court does not provide an official form which must be completed for the debt repayment plan, but if you have legal counsel, they will provide the form or you can find examples online. An information packet consisting of your bankruptcy petition, the schedules, the repayment plan and your most recent tax returns and proof of tax filings are submitted together upon completion to the proper bankruptcy court.
4. A trustee is appointed to your case
The court will appoint a trustee to your case after they receive your bankruptcy petition. The trustee will review your Chapter 13 bankruptcy repayment plan and ensure it complies with bankruptcy laws. They will also collect debt payments and began to distribute them each month to your creditors. Payments will begin one month after you have filed your bankruptcy petition and schedules.
5. Automatic Stay is initiated.
Next, the trustee will notify the creditors about your Chapter 13 bankruptcy filing. Creditors are barred from continuing credit collection actions after this notification. There are exceptions, and some creditors can request the court to lift the stay.
6. Attend the meeting of the creditors and the confirmation meeting.
Next, you will be required, not only to attend a meeting of the creditors where you will be asked questions about your finances and your bankruptcy petition, but if there are no objections to the filing, you will have to attend a confirmation hearing. The plan is generally approved at this meeting.
7. Make all payments for the bankruptcy plan.
The next step is to make all the required payments outlined in your bankruptcy repayment plan until the plan is completed. This process takes three or five years. If you complete the plan you will have to take a financial management class, which is different than the credit counseling course.
8. Court grants the discharge
Assuming you have completed all the steps above, the court will hold a hearing or notify you that your bankruptcy has been discharged.
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The request for reconsideration may take 30 to 90 days.