Timeline For A Chapter 13 Bankruptcy Case

The timeline for a chapter 13 bankruptcy can take three to five years to complete once the bankruptcy paperwork is filed. Chapter 13 is for people with regular income who want to repay their debts or save their homes from foreclosure. The timeline begins immediately upon filing the bankruptcy petition with an automatic stay. The automatic stay prohibits creditors such as mortgage companies from repossessing property or credit card companies from garnishing wages. Thus, as long as the chapter 13 is in effect creditors can’t make harassing telephone calls or send demand letters for payment.

People Must Make Payments within 30 Days

The U.S. Bankruptcy Court expects people to being their repayment plans within 30 days of filing bankruptcy. This means that the exact amount of the monthly payment must be sent to the bankruptcy trustees even if the repayment plan hasn’t been approved, or confirmed, by the court. If not, people face having there chapter 13 cases automatic dismissed for nonpayment.

Meeting of the Creditors

The meeting of the creditors is a hearing people must attend. Typically, according to the U.S. Bankruptcy Court, the meeting is held 20 to 50 days after the chapter 13 cases are filed. During the meeting, individuals are placed under oath by trustees and asked questions about their financial problems and terms of the bankruptcy plans.

Making Payments

People must make continuously make their bankruptcy payments for three to five years, depending on their specific repayment periods. Also, they must keep all payments to creditors current. For instance, if people are trying to save their homes from foreclosure, they have to make their regular mortgage payments too. If they don’t, the creditors can file a motion to lift the automatic stay or the trustees can dismiss the bankruptcy cases.

Discharge

Trustees will discharge bankruptcy cases when all payments have been paid, bills are current and people have taken their debt education course.

Seek Legal Help

Bankruptcy lawyers are experienced in the chapter 13 process. Thus, they can guide people interested in filing for chapter 13 bankruptcy before any paperwork is started. For instance, bankruptcy lawyers can compare people’s income against their state’s median income guidelines to see if they have enough money to enter a chapter 13. Also, bankruptcy lawyers will create a repayment plan that outlines the amount people will pay the court and for how many months.