Chapter 13 Bankruptcy

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CHAPTER 13 BANKRUPTCY SUMMARY

  • You pay a percentage to your creditors based on your ability to pay.
  • You can keep you home and car( even if you are behind on payments).
  • Take a total time for a chapter 13 is 36 to 60 months.
  • You pay what you are able to pay to the trustee over the term of the plan.
  • You pay your tax refunds to the trustee who uses the money to pay your creditors
  • Attorney Fee is 3,200.00 dollars paid through the plan (over 36 to 60 months).
  • Can have benefits to prevent foreclosure.

An alternative to chapter 7 bankruptcy is a chapter 13 bankruptcy. Under a chapter 13 bankruptcy payments are made to a trustee. The payments to the trustee are based on your ability to pay not the amount of your debts. Under chapter 13 a debtor proposes a plan to pay part or all of his debts. The plan can be as short as 36 months or as long as 60 months. For example, a chapter 13 plan may propose to pay creditors 10 percent of the total amount owed. A chapter 13 can be advantageous to the debtor by allowing them a method to pay back house payments or car payments and still retain the property. A chapter 13 can also be advantageous to the creditor because they will receive sum payment as opposed to no repayment under chapter 7.

COMMON CHAPTER 13 QUESTIONS

1.  WHO IS ELIGIBLE TO FILE CHAPTER 13 BANKRUPTCY?  Any person who resides in the United States may file chapter 13 bankruptcy.

2.  HOW MUCH IS A CHAPTER 13 FILING FEE?  Chapter 13 filing fee is $284.

3.  HOW DO I PAY FOR A LAWYER?  A chapter 13 bankruptcy is 3,200.00 dollars.  This is not paid up front.  Typically, 600.00 dollars is paid to cover the filing fee and some attorney fees.  The balance is paid through the plan.

4.  WHERE IS A CHAPTER 13 BANKRUPTCY CASE FILED?  A chapter 13 bankruptcy case should be filed in the district where the debtor resides or maintains a principle place of business for the greater portion of the last 6 months.

5. MAY A SPOUSE FILE BANKRUPTCY WITHOUT THE OTHER SPOUSE FILING CHAPTER 13?  A married couple may file for bankruptcy together or either party may file separately. There is not a requirement that a married couple file bankruptcy together. Typically, if both parties have substantial debts or there are a number of joint debts, it is logical for both parties to file chapter 13 bankruptcy rather than filing separately.

6.  IS MY NAME GOING TO BE PUBLISHED IF I FILE A CHAPTER 13 BANKRUPTCY?  When a person files chapter 7 bankruptcy, there is a public record indicating the bankruptcy has been filed.  There is no way that you can make a bankruptcy completely private.

7. ARE EMPLOYERS NOTIFIED OF A CHAPTER 13 BANKRUPTCY FILING?  Employers are usually notified of a chapter 13 case.  A chapter 13 case usually provides for a wage withholding order in which a portion of your wages is paid to the trustee for your creditors through your pay check.

8. WHAT IS THE CHAPTER 13 BANKRUPTCY PROCESS?  The beginning of a chapter 7 is similar to a chater 13 bankruptcy.  We gather the information to prepare your bankruptcy petition.  The petition contains basic financial information about you including a list of your assets, a list of your debts, a budget and other basic information.  What is different in a chapter 13 is the preparation of a “plan” which tells the Court how you are going pay your bills over the next 36-60 months.  The court sends notices to all of your creditors after the case is filed with the court.  After we file your case, we will send you an email telling you your case number, trustee, and judge.  We will also tell you where to mail trustee payments.  About five weeks later we will meet for your 341 meeting with the trustee.  The 341 meeting is not adversarial. There is no judge present. Typically, the only people who are present at your 341 meeting are the Trustee, your attorney, yourself, and possibly creditors. Creditors do not usually attend these meetings.   After your 341 meeting, your Trustee may indicate changes that need to be made to your plan or schedules. We will complete those changes and file them with the Court. At that point your case will be scheduled for confirmation. Once your plan is confirmed, you will have an obligation to continue to make payments on a regular basis consistent with your plan. You will also be required to provide the trustee with any tax refund money (disposable income) that you have during the term of your plan.

9. WHAT IS A 341 MEETING?  WHAT WILL I NEED TO BRING?  A 341 meeting is a meeting with the Trustee to review your schedules. The 341 meeting is held at the trustee’s offices and not the courthouse. A judge will not be present.  You will need to bring your driver’s license and social security card to verify your identity. In the event that the Trustee needs additional information, you will provide it to our office and we will forward it to the Trustee.

10. HOW LONG WILL MY PLAN TAKE?  A Chapter 13 plan must last a minimum of 36 months and no longer than 60 months. In the event that you are paying your creditors 100%, then you can complete your plan earlier than 36 months.

11.  WILL I GO TO COURT OR SEE A JUDGE?  Typically you will neither go to Court nor see a Judge as part of your Chapter 13 Bankruptcy.

12. HOW WILL I KNOW MY DEBTS ARE DISCHARGED AND MY PLAN IS COMPLETE?  On an annual basis you will receive a statement from the Trustee’s office indicating the progress through the plan. Upon the completion of your plan, they will perform an audit and issue a discharge indicating that all your debts are discharged regardless of the percentage of the plan.

13. WHAT DO I DO IF I RECEIVE A MOTION TO DISMISS MY CASE BY THE CHAPTER TRUSTEE?  Occasionally, if you miss payments or fail to provide the Trustee with necessary information including tax refunds, the Trustee will file a motion to dismiss your case for failing to comply with your plan. In the event that you receive one of these notices, please contact my office immediately so that we can cure the problem.

14. WHAT IF I CANNOT MAKE THE PLAN PAYMENTS?  In the event that you are unable to make payments to the plan because of unemployment or any other reason, there are a number of different options. First of all you may convert your chapter 13 to a Chapter 7 bankruptcy. Secondly, we may be able to modify he terms of your plan so that you can stay in your plan. Thirdly, if you can catch up with the payments at a later date, the Trustee will more than likely allow you to do that.

15. CAN I BUY OR SELL PROPERTY OR AUTOMOBILES DURING MY PLAN?  In the event that you wish to buy or sell real estate or a vehicle you will more than likely need the permission of the Court. If you are purchasing a vehicle for cash or selling a vehicle where there is no lien or debt due and owing for under $2,000 you do not need to contact your attorney. In the event that you are buying or selling a home or other real estate you must have permission from the Court.

16. DO I GET TO KEEP MY TAX REFUNDS?  No, during your plan you must provide the trustee with a copy of your tax returns (both state and federal) and your refund money because it is disposable income.

When you need a Grand Rapids Chapter 13 Bankruptcy Attorney, remember to call Krupp Law Offices PC for fast honest advice about your financial problems and get honest advice about your options.  Krupp Law Offices represents clients in cases throughout West Michigan, including the cities of Grand Rapids, Kalamazoo, Big Rapids, Ionia, Muskegon, Grand Haven, Stanton, Greenville, Wayland, Allegan, Holland, Ludington, Cadillac, Baldwin, Newaygo, White Cloud, Fremont, Coopersville, Reed City, Lake City, Hart, Hastings, Middleville, Wyoming, Rockford and Portage, including Kent County, Ottawa County, Newaygo County, Ionia County, Mecosta County, Barry County, Montcalm County, Allegan County, Kalamazoo County, Osceola County, Lake County and Muskegon County, Michigan.

Call for a free phone consultation.  Our office can help.

KRUPP LAW OFFICES PC
Grand Rapids Chapter 13 Bankruptcy Attorneys
161 Ottawa NW Suite 404
Grand Rapids MI 49503
616-459-6636 or Mail@krupplaw.com

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