A chapter 13 action begins by submitting a petition with the bankruptcy court taking care of the area where the consumer has a domicile or residence.

Unless the court orders otherwise, the consumer must also file with the court:

* schedules of assets and liabilities;
* a schedule of current income and expenditures;
* a schedule of executory contracts and unexpired leases; and
* a statement of financial affairs.

The consumer must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, obtained 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts.

The debtor must absolutely produce the chapter 13 case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case started).

A husband and wife may possibly file a joint petition or individual petitions.

The courts must absolutely charge a $ 235 case filing fee and a $ 46 miscellaneous administrative fee. Typically the expenses must definitely be paid to the clerk of the court upon filing. With the court’s authorization, having said that, they may be paid in regular payments.

The number of installments is confined to four, and the debtor must make the final payment no later than 120 days after filing the petition.

If needed, the court may draw out the time of any payment, as long as the last payment is paid no later than 180 days after filing the petition. Id. The debtor may also pay the $ 46 administrative rate in installments. If a joint petition is submitted, only one filing fee and one administrative fee are levied. Debtors should be aware that failing to remit these costs may result in dismissal of the case.

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

* A list of all creditors and the balances and nature of their claims;
* The source, balance due, and frequency of the debtor’s income;
* A listing of all of the consumers property; and
* A detailed list of the debtor’s monthly living costs.

Married individuals must absolutely gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the cash flow and expenses of the non-filing spouse is needed so that the court, the trustee and lenders can analyze the household’s financial position.

When a person submits a chapter 13 petition, an impartial trustee is designated to administer the case. In some districts, the U.S. trustee or bankruptcy administrator appoints a standing trustee to serve in all chapter 13 cases. The chapter 13 trustee both assesses the case and serves as a disbursing middleperson, collecting monthly payments from the individual and making payments to creditors.

Filing the petition under chapter 13 “automatically stays” (ceases) most collection actions against the borrower or the debtor’s property. Filing the petition does not, nonetheless, stay certain types of actions listed under 11 U.S.C. ?? 362 (b), and the stay may be effective merely for a short time in some situations. The stay happens by performance of law and involves no judicial action. As long as the stay is in effect, lenders usually may not begin or continue suits, wage garnishments, or also make phone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are given by the debtor.

Chapter 13 at the same time includes an unique automatic stay provision that safeguards co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a “consumer debt” from any consumer who is obligated along with the debtor. Consumer debts are those incurred by an individual primarily for a private, family, or household purpose.

Individuals might possibly use a chapter 13 proceeding to protect their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual submits the chapter 13 petition. The individual may at that time provide the past-due payments current over a reasonable period of time. Nonetheless, the debtor may still lose the home if the mortgage company performs the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that become due following the chapter 13 filing.

Between 21 and 50 days after the individual files the chapter 13 petition, the chapter 13 trustee will definitely have a meeting of creditors. If the U.S. trustee or bankruptcy administrator arranges the meeting at an area that does not have regular U.S. trustee or bankruptcy administrator staffing, the gathering may be held no more than 60 days after the debtor files. At the time this meeting, the trustee installs the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan. If a husband and wife file a joint petition, they both have to attend the creditors’ meeting and answer questions. In order to protect their independent judgment, bankruptcy judges are forbidden from going to the creditors’ meeting. The participants usually solve troubles with the plan either during or just after the creditors’ meeting. Generally speaking, the debtor can avoid problems by making sure that the petition and plan are thorough and specific, and by consulting with the trustee preceding to the meeting.

In a chapter 13 case, to participate in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. A governmental unit, however, has 180 days from the date the case is filed file a proof of claim.

After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor’s chapter 13 repayment plan.

For more information on how to find a good bankruptcy attorney or to find out more about Chapter 13 bankruptcy

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