How to prepare your Chapter 13 payment plan

On Behalf of | Aug 17, 2023 | Chapter 13 |

Chapter 13 bankruptcy isn’t for everyone. If you’ve decided it’s a good idea for your Florida financial situation, it’s important to know what to expect.

Chapter 13 bankruptcy proceeding steps

There are a few steps you’ll need to follow to complete your Chapter 13 bankruptcy proceedings. This usually can take up to about three months to file, yet you likely wouldn’t be discharged from Chapter 13 bankruptcy for about 3 to 5 years.

Credit counseling: You’ll receive credit counseling from an agency that you need to undergo within a few months before you file for bankruptcy.

Paperwork assistance: A professional helps you with paperwork that includes your most recent tax return, evidence of your income, the list of creditors and how much you owe each of them, a breakdown of living expenses you have, and the certificate you receive after you’re done with your credit counseling.

File a petition: Pay the fees and file a bankruptcy petition with your local bankruptcy court. Your debt obligations will be paused for a short while. In many instances, there will be no debt collection and/or foreclosure proceedings until you complete the repayment plan.

Draft your repayment plan: Come up with a plan to repay lenders. Make sure to submit this within 2 weeks of filing your petition. You’ll begin following this within a month after you file your case.

Assignment of a trustee: The court then assigns you a trustee to look over your case and connect with your creditors. They’ll have this meeting about a month after you submit your petition, where you will take an oath and then answer questions about your plan and debt in general.

The confirmation hearing: You’ll have to go to a confirmation hearing no more than 45 days after meeting with creditors. The purpose of this is to determine if the plan meets necessary standards, and if so, the judge will approve it.

Bankruptcy is difficult enough to deal with in terms of shame and the physical financial issues. You’ll have an easier process if you know about the required steps.