What Happens When I File for Chapter 13 Bankruptcy?
What do I need to file for Chapter 13?
Bankruptcy laws can be pretty complex, thanks to the Bankruptcy Abuse Prevention and Consumer Protection Act that was passed in 1995. But there's no need to be discouraged. You don't have to go through it alone! A professional bankruptcy attorney can walk you through the process step by step.
In order to file for either Chapter 13 or Chapter 7, you must first complete credit counseling with an agency approved by the U.S. Trustee's office. Your bankruptcy attorney can help you find an appropriate counseling agency.
Also, you must meet a few requirements before you file. Most people who meet the basic criterion — having a steady income — are eligible. But there are a few exceptions based on the amount of debt you have. Don't worry. A professional bankruptcy attorney can fill you in on the details.
If you've previously had debts discharged with bankruptcy, a few more rules apply. If it was a Chapter 7 (or another form of bankruptcy other than Chapter 13), you have to wait four years before filing for Chapter 13. If you've previously had debts discharged under Chapter 13, you must wait two years before filing again.
Bankruptcy is complicated, but it's our job to make it easier. Remember, bankruptcy was created just for you, the U.S. citizen. Contact a DebtStoppers attorney today to activate your legal right.
I'm eligible to file. Now what?
Congratulations — you're on your way to a debt-free future! Now you must file a bankruptcy petition, the official document that gets the process started.
First, supply your bankruptcy attorney with your important financial documents — any information pertaining to your income, expenses, assets and liabilities. This helps your lawyer determine your current income and other necessary calculations.
When listing your assets, make sure to include everything you own that is considered to have value. That means the big stuff like cash and investments, vehicles and real estate, and also smaller items you might not think about, like clothing, jewelry and furniture. Also include money due to you, such as tax refunds or alimony, and money you owe, primarily what is due to your creditors.
Cataloging every detail of your financial life might feel intimidating at first, but rest assured, a professional bankruptcy attorney can break the process down step by step so it goes smoothly and comfortably. Meanwhile, it won't hurt to start preparing this information if you're considering bankruptcy. Remember, if you have any questions or concerns, don't hesitate to ask us at DebtStoppers. It's why we're here.
How much does Chapter 13 bankruptcy cost?
Bankruptcy courts require a fee to file. It currently costs $274 to file for Chapter 13 in Illinois or Georgia. These fees are subject to change, but you can always check out the most current numbers here.
Though not guaranteed, waivers and other exceptions are sometimes available depending on your particular situation.
There is also a smaller conversion fee (should you need to change a Chapter 13 bankruptcy to a Chapter 7) and the possibility of amendment fees (in case you have to change documentation after the initial filing), in addition to attorney fees.
Remember, if you have any questions about cost or any issue relating to bankruptcy, a DebtStoppers attorney can answer them for free. And you can also check out our blog or sign up for an hour-long personal debt analysis — all at no cost.
The price of filing for bankruptcy is small change compared to the benefit you receive when you eliminate debt and keep that roof over your head. Fill out our personal debt analysis online and unload your debt burden today!
What happens once I file?
Right away, you see the effects of the automatic stay. Debt collections and other creditor actions are halted. A notice is sent to your creditors alerting them to the fact you've filed for bankruptcy. From this point on, you no longer have to deal with creditors.
You are assigned a bankruptcy trustee who reviews your case. This might sound a bit intimidating, but it's merely a formality. The trustee just needs to make sure your petition is accurate.
Within the next 15 days, you must file a schedule of your assets and liabilities, income and expenditures, and the other financial information listed above. Again, there's no need to be overwhelmed. Your bankruptcy attorney is here to help the process go smoothly.
Next, you and your attorney submit a proposed payment plan that takes into account your income, living expenses and the amount you can afford to pay.
About a month or two after filing, you attend a meeting of creditors with your bankruptcy trustee. While the thought of meeting face to face with creditors might be a bit unsettling, keep in mind that this is a very informal and usually brief meeting. In fact, most creditors don't even choose to attend. Once the automatic stay is in effect, they have little to no power over your life — and, therefore, not much incentive to be present.
From this point, your only obligation is to keep making those bankruptcy payments. When your payments are complete, you'll receive a notice of discharge — official proof that you're free and clear.
Remember — bankruptcy is your chance for a fresh start!
Don't wait another day. The sooner you file for bankruptcy, the sooner you'll kiss debt goodbye. Sign up for a personal debt evaluation online right now!