When you file for Chapter 13 bankruptcy, you enter into a payment plan to pay off your debts. However, not all debts are treated equally by the bankruptcy code. Some debts must be paid first, other debts must be paid in full, and other debts may be able to be reduced (and substantially so). In this post, we’ll discuss which debts are which and how it impacts your Chapter 13 payment plan.
Chapter 13 bankruptcy is an attractive option for people who just need to reorganize and better manage their debt. In order to accomplish this, Chapter 13 requires people to enter into a repayment plan that is approved by the court and managed by the trustee. Your creditors have to halt any collection efforts and are required to make a good-faith effort to work with you on repayment terms that you can afford. The payment plan can take up to five years to repay your debts.
So, you are preparing to file Chapter 13 Bankruptcy. You have hired a licensed and local Chapter 13 Bankruptcy attorney in your state. You have not called any out of state companies and you have dismissed any law firm that would have you meet with a paralegal.
Many debtors have co-debtors on the debts they owe. For example, debtor may have had a relative or friend co-sign their vehicle loan. If debtor does not pay on the loan, bank will look to co-signor for payment. Co-debtor or a co-signer is a person who pledges their liability on the loan should debtor refuse to or not be able to pay on the loan. Banks routinely ask for co-signers as a way of protecting the loan and making sure the bank is repaid. Co-signing is a form of collateral for the bank, protection against the loan going unpaid if you will.
Think about this for a moment. Can a creditor write in a contract, any contract, that you waive your right to file bankruptcy on this debt/contract, and therefore, further protect creditor’s ability to get paid back on a debt? Wouldn’t this be clever for a creditor to do this? Wouldn’t all creditors do this? If this were possible, and enforceable, all lawyers for creditors would be committing malpractice if they failed to write a provision into every contract waiving debtor’s right to file bankruptcy on this debt.
After a Chapter 13 341 meeting, what happens next? There are a variety of things that can happen after a Chapter 13 341 meeting. One of those events that could happen is a creditor may bring what we call a motion for relief from the automatic stay.
People often want to know what happens after a Chapter 13 Bankruptcy hearing. The next step is a confirmation hearing where the bankruptcy court approves or “confirms” the Chapter 13 Bankruptcy plan. But, prior to the confirmation hearing, creditors also have a chance to object to debtor discharging debts with creditor for certain reasons identified in Section 523 of the Bankruptcy Code.
Section 341 of the Bankruptcy Code requires debtor(s) to submit to an examination, under oath, by the Chapter 13 trustee, or a representative of the trustee. The general purpose of the meeting is for the trustee to examine the debtor and debtor’s schedules to make sure all debtor(s) assets and debts are listed on the schedules and that debtor has listed all of her income and expenses as well. Part of the function of a Chapter 13 trustee is to determine whether debtor(s) schedules and proposed plan comply with federal bankruptcy law.
Credit card debt is a major reason why people file for bankruptcy in Minnesota. Credit card debt can get out of control for many different reasons, some of which are beyond your control. If a household member loses a job or suffers a serious illness, you need to rely on credit cards to pay your bills and cover basic expenses. Meanwhile, you may only be able to afford the minimum monthly payment, which can result in excessively inflated balances due to high interest rates. Before you know it, you may see no possible way that you will be able to pay off your credit cards.
I have often described Chapter 13 Bankruptcy like a “government sponsored debt consolidation plan”, because that is what it is. In simple terms, the function of a Chapter 13 trustee is to collect funds from debtor(s) and disburse those funds to debtor(s)’s creditors based on an approved plan. Now, the trustee must examine the schedules, and the plan, to make sure the proposed plan complies with all legal requirements under the law. If the plan does not, the Chapter 13 trustee’s job is to object to debtor’s plan until it does.
Section 341 of the Bankruptcy Code requires debtor(s) to submit to an examination, under oath, by the Chapter 13 trustee, or a representative of the trustee. The general purpose of the meeting is for the trustee to examine the debtor and debtor’s schedules to make sure all debtor(s) assets and debts are listed on the schedules and that debtor has listed all of her income and expenses as well. Part of the function of a Chapter 13 trustee is to determine whether debtor(s) schedules and proposed plan comply with federal bankruptcy law.
If you are looking for a bankruptcy attorney in Mankato, Minnesota, it pays to look at the law firm’s website first. Only select the law firm with the LARGEST Chapter 7 and Chapter 13 Bankruptcy website in Minnesota. Why would you want to research bankruptcy on a bare bones site when you can research to your hearts content on Minnesota’ LARGEST Chapter 7 and 13 Bankruptcy website?
Yes, you do. As part of the bankruptcy law changes handed down in 2005, Congress now requires each debtor in bankruptcy to have to go through a US Trustee qualified credit counseling and obtain a certificate (which gets filed with the bankruptcy court) prior to filing Chapter 13 Bankruptcy. If you fail to complete this course and file a certificate with the bankruptcy court, your bankruptcy case will get dismissed. Crazy stuff right?
Many people make New Year’s resolutions to exercise more, eat healthier, or be kinder to others. But what about resolving to address your financial situation? A lot of people facing financial stress and debt tend to sweep it under the rug. It may feel so overwhelming that they think there is nothing that can be done about it. This is not the case, however, as our experienced bankruptcy attorneys have helped many people overcome even the most serious financial situations. The following are only some debt-related resolutions that can make for a happier 2019.
Once the decision to file Chapter 13 Bankruptcy has been made, there are documents that you should gather to make the process of filing bankruptcy easier. We already know that credit reports and asset reports should be pulled as part of the process. But, there is more information that is needed by your attorney. If you would like to be your attorney’s hero, starting gathering these documents now.
