Chapter 13 Bankruptcy Process

Chapter 13 Takes 3-5 Years

Although the Process for filing a Chapter 13 Bankruptcy is similar to Chapter 7, there are still some major differences.  The biggest one being that you are in the Chapter 13 Bankruptcy for 3-5 years and you have to make payments on all or part of your debt.

Credit Counseling Course

Before you file a Chapter 13 case, you will need to spend about an hour on the internet or phone completing a Court Approved Credit Counseling Course.  You attorney will advise you on what the easiest way to do this Credit Counseling.  He or she may have a specific credit counseling agency that they send all their clients to.  When you are done, the agency will send your lawyer your Certificate of Counseling so that your lawyer can file your case.

Review and File your Petition

Filing the Chapter 13 Bankruptcy Petition is what officially starts your bankruptcy case and the Chapter 13 Process.  Your attorney will have you review it before it is filed.  As soon as it is filed, all creditors must stop collection efforts against you, including Foreclosures and Repossessions.  This automatic halt on all collection efforts is called the “Automatic Stay.”  Using Chapter 13 and the Automatic Stay, thousands of people save their home from foreclosure and their car from repossession every year.  Within 15 days of the filing of the Chapter 13 Petition, you (or your attorney) must file schedules that list all your assets, debts, income, and expenses.  You must also file your Chapter 13 Payment Plan within the same 15 day time period.  Note that unless you are in an emergency situation, you lawyer usually prefers to file all this stuff at the very beginning with the initial filing.

Pay on Your Chapter 13 Payment Plan

This is the key part of the Chapter 13 Bankruptcy Process.  The court will have a hearing confirming your Chapter 13 Payment Plan.  In your payment plan, you will most likely start making regular payments on your house and cars, and make an extra monthly payment to pay off the amount that you had fallen behind.  Over the course of your payment plan, you will catch up on secured debts, and pay off all, some, or none, of your unsecured debts (it depends on your particular situation).  The payment plan lasts from 3 to 5 years.  Many times, at the end of your Payment Plan, any remaining unsecured debt is discharged (again, depends on your situation).

Financial Management Course

Before you can get your Discharge at the end of our Chapter 13 Payment Plan, you need to complete a Court Approved Financial Management Course.  Your attorney will probably refer you to an agency that he or she uses.  Once you complete the course, you will receive a “Certificate of Debtor Education” that must be filed with the court before you can receive your discharge, ending the Chapter 13 Process.