Chapter 13 Bankruptcy Timeline
The Chapter 13 bankruptcy process begins when the bankruptcy attorney, on behalf of the debtor, files the bankruptcy petition with the bankruptcy court in their district. The debtor will include all of their personal information including, income and expenses, property, executory contracts, and a list of all the creditors. Also included in the petition, the individual filing a Chapter 13 has to propose a payment plan describing how much they can afford to pay their creditors over a 3 to 5 year period. After the Chapter 13 plan is approved by the bankruptcy court, a summary of the plan will be sent out to all creditors listed in the bankruptcy petition and to the trustee assigned to the case at least 25 days before the confirmation hearing. This will allow time for objections from the creditors in regards to the bankruptcy filing.
Within 30 days of the filing date of the Chapter 13 bankruptcy plan the debtor must start making payments to the trustee. The bankruptcy trustee will hold the payments until confirmation. If and when the debtor’s payment plan is confirmed, the bankruptcy trustee will begin to disperse the money to the creditors according to the plan. If for some reason the plan is rejected, the trustee will return the money to the debtor after subtracting the administrative costs.
The individual filing bankruptcy, along with their attorney, must attend the meeting of the creditors or the 341 meeting and be interviewed by the bankruptcy trustee and by any creditors who have questions for the debtor. The 341 meeting must be scheduled at least 20 days after the filing date, but no later than 50 days.
The bankruptcy filing plan can be modified at any time before the confirmation hearing without court approval. Secured creditors do not have to be notified of any changes unless the new plan will change their payments
The court must hold a hearing to confirm a plan, even if there are no objections from the creditors. This hearing must be scheduled between 20 to 45 days after the creditors meeting. The main purpose of the confirmation hearing is to make sure that the plan conforms to the bankruptcy code and it is feasible and filed in good faith. After the plan is confirmed the bankruptcy trustee will start dispersing payments to the creditors. The bankruptcy attorney will coordinate and oversee the entire process to ensure the best interest of the debtor is first and foremost.
The bankruptcy discharge comes when the debtor completes the chapter 13 plan. If the debtor cannot complete the bankruptcy filing plan that case will be dismissed or the debtor has the option to convert it into a Chapter 7 bankruptcy.
When it comes to filing personal bankruptcy, careful thought and diligence must be given to the process. Added fears from the unknown consequences of making this decision can loom like an insurmountable obstacle. Taking the time to find help can reduce much of the uncertainty. Fill out the form below to get a FREE NO OBLIGATION CONSULTATION from a local bankruptcy attorney to discuss your situation and learn how bankruptcy might free you from debt.