Bankruptcy Alternatives / Debtor's Options
Frequently Asked Questions - Chapter 13 Debtors
Q. I decided I am a person who should file Chapter 13 bankruptcy, what happens
A. These three things first:
Q. When do I see the Judge?
Q. When does this happen and how many meetings
will there be?
Q. Who else will be at the meeting and what will
A. The title of the gathering will be a 341 Creditors meeting. Everyone you owe money to, who you have listed on your schedules, will be invited to attend. At the meeting they will be given an opportunity to ask any questions regarding your financial situation which may effect the plan you have proposed. In reality few if any of these creditors attend. The most likely guests will include large creditors, the holder of your mortgage or someone you might owe an unusually large sum of money to another creditor almost sure to accept an invitation to this party will be Sears insisting any hard goods you have purchased, such as refrigerators or stoves should be treated as secured merchandise to be either redeemed or reaffirmed. I have even seen them to go so far as to make this claim for car batteries and tires. Once you understand secured vs. unsecured assets you can figure the secured creditors stand as those most likey to appear at a Chapter 13 bankruptcy 341 meeting.
Q. Will anyone other than creditors be at the
A. Yes. Your attorney or someone from their firm will be there to represent you and speak on your behalf as needed, although many of the questions will be asked of you directly. The person asking the questions and meeting coordinator will be the Chapter 13 Trustee. Their job is to make sure that the plan meets all the specifications as required by the Bankruptcy Court and that the unsecured creditors are protected and allocated as high of a return as might be possible. If all goes well there will be only one meeting. Following the meeting, if there are no objections raised, all that there will be left to do is make all payments outlined in the plan in a timely manner.
Q. Who should I be paying and when?
A. Now that you have filed a Chapter 13 bankruptcy the payments will fall into three categories:
Q. How long will I have to continue to pay the
Q. What if I have enough income that I may pay
in less than 36 months?
Q. What if I have extra money to pay more to
the trustee one month?
A. I don't recommend this. I you have a bit of extra money save it. If a time comes later where a problem means you will have to miss a payment you may not be given credit for previous early payments and there could be trouble. Keep in mind that if your income changes you are supposed to tell the Chapter 13 bankruptcy court and have your payments adjusted.
Q. What percent do the unsecured creditors usually
A. In most cases unsecured creditors receive 10 percent of their claim. In other words if a credit card had a $1000.00 balance before you filed they would receive $100.00 over the course of the Chapter 13 reorganization plan. This $100.00 would then be spread over the 36 or 60 months of the repayment plan so that you are only paying a few dollars every month to satisfy this creditor.
Q. What if I have so many creditors that I need
more than 60 months to complete the plan?
A. If you can not complete your plan in 60 months it is likely one or more of the creditors or the Trustee will object to the plan and your case will be dismissed or converted to a Chapter 7. If the creditors are willing to work with you some creative options may emerge. To get an estimate of your chapter 13 plan payment and the term of the plan use the chapter 13 bankruptcy payment calculator tool.
Q. Can they still foreclose on my house after
I have filed?
A. If the court gives them permission to they may. If you are making all your payments in a timely fashion the court will not likely grant such a motion. This is why it is very, very, very important that all payments be made to the secured creditors after you have filed. Since you are already in a bankruptcy if you fail behind on these payments and a creditor receives a Relief from Stay, in other words permission to proceed with a foreclosure, there will be nothing you can do to stop them and you will lose your home.
Q. What happens if I fail to pay the Trustee?
A. The Trustee can move to dismiss your Chapter 13 bankruptcy case. If this happens you will lose the protection of the bankruptcy court both in terms of reducing the debt owed to your creditors as well as protective relief granted by the court.
Q. What happens if I have trouble making a payment
in any given month?
A. Communication is very important. Let your attorney know this information that he or she may alert the Trustee or creditors involved. If it is a temporary one or two month situation it may be possible to work out a solution far less drastic than dismissing the case or allowing a Motion for Relief from Stay.
Q. What if my inability to make payments becomes
an on going problem or I realize something I am incapable of completing
A. If you realize this before the court takes action on its own you will have the choice of allowing the Chapter 13 case to be dismissed or trying to convert the case to a Chapter 7. The correct option will depend on your debt, assets, several other personal considerations. If looking at these questions you should learn the differences of Chapter 7 vs. Chapter 13 bankruptcy.
Q. I changed my mind and want to dismiss my Chapter 13 bankruptcy, can I just cancel it and make it like I never filed Chapter 13 bankruptcy in the first place?
A. While you certaily maintain the right to ask for dismissal for your own Chapter 13 case as well as the right to ask for conversion to Chapter 7, the court will count your filing in terms of restictions on the number of bankruptcies you may file within a given number of years and the bankruptcy will still end up on your credit report and score even though you dismissed it.
Q. Are there any other legal fees beside what
I may have paid before filing?
A. If all goes well there will not be. If, on the other hand, there are amendments required, motions from Relief from Stay which must be defended other adversarial proceedings, motions and especially a conversion to Chapter 7, they will all require additional legal fees.
Q. I filed my Chapter 13 pro se because I needed an emergency petition to stop foreclosure on my home, can I get help from a lawyer or am I locked into finishing the Chapter 13 bankruptcy on my own?
A. Just because you filed pro se (or by yourself without an attorney) does not mean it's too late to find a bankruptcy lawyer or hire a bankruptcy attorney to help you complete your Chapter 13.
do not want your house, they want your money.
Pay them their regular payments, pay the trustee and you may keep your home.
Bankruptcy Questions - Find all the bankruptcy information you might be looking for about both chapter 7 bankruptcy and chapter 13 bankruptcy including chapter 7 vs chapter 13, what does a chapter 13 do, who should file a chapter 13, what happens after chapter 13 bankruptcy dismissal, how to find a bankruptcy attorney, hiring and working with your bankruptcy attorney, and much more.
Lifestyle | Real Property and Other Hard Assets | Foreclosure | Cash, Stocks, IRAs and Other Soft Assets | Secured vs. Unsecured Creditors | Credit Rating
Debt Workout Mortgages & Secured Debt | Credit Card & Unsecured Debt | Bankruptcy | Do Nothing | Deed in Lieu of Foreclosure | Do Nothing Home Forclosure | Pay Creditors in Full | Debt Consolidation Loan | Non-Profit Credit Counseling | Credit Card Balance Transfer
Credit Repair and Credit Rebuilding -Credit repair and credit rebuilding article. Topics include how to repair your credit and warnings about credit repair scams. Links to other credit repair sites and professional credit repair services plus my own Free Guide to Help Repair and Rebuild your Credit Report. For more credit help try 14 Do's and Don'ts To Raise A Score Fast or the Credit Score FAQ.
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How to Get money when you need money - Examines WHEN you really NEED money and how to get money even with bad credit for an emegency or financial crisis.
Stop Home Foreclosure Help - Articles to better understand the foreclsoure process and how to avoid a foreclosure including an interactive tool to analyze your own situation and point you in the right direction to keep your home, a list of various ways to halt a foreclosure, a list of 10 mistakes to avoid when facing foreclosure and foreclosure myths.
Personal Home Budget Analysis - An interactive tool to learn where your money REALLY goes. Input your income and expenses, the program will automatically determine if you have accounted for all you have spent. When you have discovered all your expenses you will be know the details of any overspending. Use this information to help plan and keep a monthly budget or change spending to avoid further debt or bankruptcy.
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