CHAPTER 13 INFORMATION
A Chapter 13 bankruptcy petition is usually filed by individuals who are attempting to save their homes from foreclosure or by individuals who are not eligible for Chapter 7 but still wish to discharge as much of their debt as possible. If the purpose is saving your home from foreclosure, the bankruptcy petition must be filed before the Sheriff's Sale takes place. If you do not have enough time to file your bankruptcy petition before the Sheriff's Sale takes place, the Sheriff in the county where the property is located will ordinarily adjourn the Sheriff's Sale for two weeks upon request. Please note that the Sheriff will only grant two adjournments and then you will not be granted any further adjournments.
If you wish to save your home, an important factor to consider is whether you will have enough income to resume making regular mortgage payments after the bankruptcy petition is filed as well as make the Chapter 13 Plan payment for 36 to 60 months as required by your Chapter 13 Plan. If you own a home, after a Chapter 13 bankruptcy petition is filed you must resume your mortgage payments with the first payment that becomes due after the petition is filed. Your first Chapter 13 Plan payment to the Trustee will also be due the month after the bankruptcy petition is filed.
After a Chapter 13 bankruptcy petition is filed and while the case is pending in Bankruptcy Court, you can sell your home or refinance the mortgage provided that the Court grants you permission to do so. A Motion must be filed with the bankruptcy court requesting permission. You can also payoff your Chapter 13 Plan early if you have the funds to do so.
After your Chapter 13 Plan is paid in full the Court will issue a Discharge of Debtor. When you receive the Discharge of Debtor it means that any debts you were able to completely or partially discharge in the bankruptcy have been eliminated.
CHAPTER 13 PROCESS
After your Chapter 13 bankruptcy petition is filed with the Court, if your home is in foreclosure, any Sheriff's Sale which has been scheduled will be cancelled. The Court will send your creditors and you a notice confirming that your petition has been filed. This notice puts your creditors on notice that they must cease all collection activity. It also tells you when your Creditors Meeting will take place.
The Creditors Meeting usually takes place about one month after your bankruptcy petition is filed. At the Creditors Meeting the Trustee will review your case to gain an understanding of what you are trying to accomplish by filing a Chapter 13 bankruptcy petition. The Trustee will also review your income to make sure that it is sufficient to pay all amounts you are required to pay pursuant to your Chapter 13 Plan. If you retain me as your lawyer, I will be with you at the Creditors Meeting. Creditors rarely appear. This should be the only hearing you will be required to attend.
About two to three months after your case is filed, the Confirmation Hearing will take place. At the Confirmation Hearing the Trustee will decide whether your Chapter 13 Plan shall be confirmed or approved. Provided that you have made a sufficient amount of plan payments and have shown that you earn enough income to make your Chapter 13 Plan feasible, your Chapter 13 Plan should be confirmed. You do not have to attend the Confirmation Hearing.
When your Chapter 13 Plan is paid in full the Court will issue a Discharge of Debtor. When you receive the Discharge of Debtor it means that any debts that you were able to completely or partially discharge in the bankruptcy have been eliminated. After you receive the Discharge of Debtor your case will be closed and you may begin rebuilding your credit.