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Chapter 13

Chapter 13

Chapter 13 provides a way for you to pay back your creditors, in whole or in part, usually over three to five years. You must have less than a certain level of debt in order to qualify for Chapter 13.

Chapter 13 gives you the chance to stop a foreclosure and catch up on the amount you're behind. It can stop wage garnishments, bank attachments, liens and levies (even IRS tax levies). It also has a special provision that protects co-signers or people who have guaranteed your consumer debts from collections during your case. You can think of Chapter 13 as consolidation loan under which you make payments to a trustee who then distributes payments to creditors.

A Chapter 13 starts when your petition is filed with the Court. Documents relating to income and expenses, debts, property (real estate as well as personal property—your “stuff”), and other financial disclosures must be prepared and filed.

Filing a petition under Chapter 13 stops most collection actions. The automatic stay stops a foreclosure, garnishment or attachment as soon as you file the petition. You may then use the Chapter 13 Plan to bring past-due payments current over time, usually three to five years.

About six weeks after you file the petition, the Chapter 13 trustee will hold a meeting of creditors (at which creditors very rarely show up--really!) About a month after the meeting of creditors, is the Confirmation Hearing (although often we usually work matters out with the trustee to avoid your having to appear in Court). At the Confirmation Hearing, we ask the Court to approve your Chapter 13 Plan. If your Chapter 13 Plan is approved, so long as you make your monthly trustee payments, you're fine. If it isn't approved the first time, we submit an Amended Plan, and have a new Confirmation Hearing.

A successful Chapter 13 bankruptcy involves filing a Plan and sticking to the Plan. Simple, right? Not necessarily—because the majority of Chapter 13 bankruptcy cases are filed without a lawyer or with a lawyer who believes that his or her involvement ends when the Plan is confirmed.  I will work with you after the confirmation if necessary.

It’s up to you to make your Plan a successful one, and it's up to me to help. You are required to begin making your plan payments within 30 days of the date the case is filed, even before the Meeting of Creditors or Confirmation Hearing. If there is a problem that prevents you from making Plan payments you need to let me know so that we can consider your options. Remember, a Chapter 13 Plan is a living entity – if you lose your job, suffer a change in circumstances or just misjudge your ability to make payments, there are often things that we can do to make it work for you.

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