Filing, confirming and completing a Chapter 13 bankruptcy case is much more complicated than Chapter 7. Chapter 13 can even be confusing for lawyers who don’t practice bankruptcy law, or who focus on other aspects of bankruptcy law. Here’s an overview of the main steps in Chapter 13.
Pre-Filing Credit Counseling
Like in other chapters, you must complete a pre-filing bankruptcy credit counseling course before starting your Chapter 13 case. This is sometimes referred to as credit counseling. Credit counseling must take place before you file your petition with the bankruptcy court. You may complete credit counseling online or over the telephone through a provider that is approved by the United States Trustee Program.
You should anticipate paying between $15.00 to $35.00 for your credit counseling course. You should also anticipate spending about 60 minutes to complete the course. While the credit counseling course is fairly simple to complete, you must ensure that you complete it in a timely manner and file the proper form with the bankruptcy court.
Chapter 13 Bankruptcy Filing Fee
Currently, the bankruptcy court collects a $310.00 filing fee to start your Chapter 13 case. If you are working with a bankruptcy lawyer, expect to pay the Chapter 13 filing fee to your lawyer so they can electronically transfer it to the bankruptcy court at the time you file your petition. If you are representing yourself pro se, expect to pay the bankruptcy court by money order, certified check or bank check. Bankruptcy courts generally do not accept cash or personal checks. You may choose to apply to pay the $310.00 filing fee in up to 4 installments. Generally, a bankruptcy court will require 25% of the filing fee on the day you file your petition, with additional 25% installments until the full fee is paid. If you do not pay the filing fee in full in 120 days, your case may be dismissed by the bankruptcy court.
Chapter 13 Bankruptcy Petition & Schedules
To start your bankruptcy case you must file, at a minimum, an official voluntary petition for individuals form and certain other statements with the bankruptcy court. If you have filed an emergency bankruptcy petition, you have 14 days to file the balance of your petition and statements with the bankruptcy court.
Chapter 13 Bankruptcy Plan
The core of your Chapter 13 case is a plan of reorganization. A Chapter 13 plan sets forth the various ways you propose to pay off your debts, the sources of your plan funding, whether you intend to keep or surrender certain assets, and may incorporate special motions to reclassify certain debts.
A standard Chapter 13 plan form has been made available, but bankruptcy courts may require their own local Chapter 13 plan form, such as the Chapter 13 Plan and Motions released by the New Jersey Bankruptcy Court.
Chapter 13 Bankruptcy Trustee Plan Payments
You generally start making monthly payments to your Chapter 13 trustee in the first month following the filing of your petition.
341 Meeting of Creditors
Just as in other types of bankruptcy, a 341 Meeting of Creditors is required to take place in your Chapter 13 case.
Personal Financial Management Court
Like in other chapters, to be eligible for a discharge in Chapter 13, you must file a certificate with the bankruptcy court within 60 days after the first date set for the 341 meeting confirming that you completed the personal financial management course. This may also be referred to as the debtor education course. You can not complete the debtor education course at the same time as your credit counseling course. You may complete the debtor education course online or over the telephone through a provider that is approved by United States Trustee Program. You should anticipate paying between $15.00 to $35.00 for the debtor education course. You should also anticipate spending about 90 minutes to complete the course.
While the course is fairly simple to complete, you must ensure that you complete it in a timely manner and file the proper form with the bankruptcy court. Once you’ve received a certificate of completion, the correct certification must be completed and filed with the bankruptcy court.
Chapter 13 Bankruptcy Plan Confirmation
Your Chapter 13 trustee and your creditors will receive notice of your proposed Chapter 13 plan. They will have the opportunity to object to your proposed plan. The normal objections to expect from your Chapter 13 trustee include failure to provide sufficient proof of income or valuation, failure to propose a plan that pays enough to your unsecured creditors under the Bankruptcy Code, and failure to make plan payments pending confirmation or to appear at your 341 meeting.
In addition to your Chapter 13 trustee, secured creditors may object to your proposed treatment of their debt or liens in your Chapter 13 plan, such as that your plan to modify your mortgage is speculative, or that you’ve failed to make post-petition payments. In addition, your Chapter 13 trustee and creditors may object to confirmation of your Chapter 13 plan for eligibility reasons, such as the Chapter 13 debt limit or prior bankruptcy filings.
After you’ve made your final payment to your Chapter 13 trustee, you must file a form with the bankruptcy court confirming that you’re current on your child support and alimony obligations. After your Chapter 13 trustee has reported to the bankruptcy court that you’ve completed your Chapter 13 plan payments, and after you’ve filed required forms, the bankruptcy court should enter a discharge order in your case.
Once your discharge order is entered, you’ve been discharged of all of your dischargeable debt, which generally includes credit card debt, medical debt and other types of debt not secured by any asset. Other non-dischargeable debt, however, such as certain taxes, student loans and alimony or child support, is not discharged by entry of the discharge order.