How to File for Chapter 13 Bankruptcy and Other Information

What is Chapter 13 Bankruptcy?

You must have income to file a chapter 13 bankruptcy. Chapter 13 bankruptcy is a full or partial repayment plan administered by the bankruptcy court. The debtor submits a plan for approval and, when a plan is approved, makes monthly payments to the bankruptcy trustee. The trustee makes payments to creditors in accordance with the terms of the plan. The repayment period may be from 3-5 years. At the end of the repayment period, if all payments have been made according to the plan, remaining unsecured, dischargeable debt may be discharged.

Who Can File Chapter 13 Bankruptcy?

In one sense, it's easier to qualify for Chapter 13 bankruptcy than for Chapter 7 bankruptcy.

One of the biggest differences is that you (the debtor) must have income.

There's no means test for Chapter 13 bankruptcy, and some debtors who cannot qualify for Chapter 7 bankruptcy opt to file under Chapter 13 bankruptcy instead. However, Chapter 13 bankruptcy requires a regular income that will allow you to create a budget and make predictable and reliable payments to the trustee.

There are several different kinds of bankruptcy in North America, and many people get confused about which option is best. It is important to understand each option before deciding which type to use. This is a guide on how to file for chapter 13 bankruptcy.

1. Determine if chapter 13 is the right bankruptcy option. Chapter 13 is an alternative to chapter 7, and is designed for people with a regular income, who want to pay off their debts, but need a certain amount of time to do so. In chapter 13, debtors repay their creditors either in full, or in part, over a period of up to three years. In some cases, you could repay your creditors over five years. Anyone can apply for chapter 13 bankruptcy if their debts are less than $269,750, and their secured debts are less than $807,750. However, corporations, partnerships, and those who have had a bankruptcy petition dismissed in the past 180 days cannot file under chapter 13.

2. File a petition. You must file a petition with the bankruptcy court in your home district. Along with the petition, you must also file a schedule of assets and liabilities, current income and expenditures, executory contracts, and unexpired leases. A schedule of exempt assets is also filed. You must purchase your bankruptcy forms at a stationary store as they are not available from the court. Your could also ask your attorney to help you fill out the forms.

3. Pay your fees. When filing for bankruptcy there are a number of necessary fees to take care of. You must pay a court filing fee of $155, and a miscellaneous administrative fee. Once the petition is filed, most legal actions are “stayed". This means that most creditors will not be able to continue lawsuits, garnish wages, or call you on the telephone to demand payment.

If you have little or no money or if you are indigent the filing fees could be eliminated. Also you can request that the clerk set you up with a payment plan so that the cost of the fees are paid over time.

Note: You have a constitutional right to access to the courts regardless of your ability to pay.  Any indigent person, except a prisoner . . . who is a party . . . in any judicial or administrative agency proceedings or who initiates such proceedings shall receive the services of the courts, sheriffs, and clerk, with respect to such proceedings, despite his or her present ability to pay for these services.

For more information about free access to the courts in Florida click on this link: Filing Fees

4. File a plan of repayment. The plan of repayment can either be filed with the petition, or no later than 15 days after.

5. Attend a meeting of creditors. This meeting is typically held 20-50 days after you file the petition. It is crucial that you attend this meeting, as it will allow your creditors to ask you questions regarding your assets and financial situation.

6. Attend the confirmation hearing. This hearing will be held in court, and a bankruptcy judge will determine if your plan of repayment is feasible, and meets all Bankruptcy Code standards. Creditors are informed of this hearing, and they are allowed to object to confirmation. This is most common when the payments in the plan are less than what they would receive in a chapter 7 liquidation, or if the debtor’s plan does not commit all of his or her projected disposable income for the three year period of the plan.

7. Begin making your payments! Within 30 days of filing the plan, you must start making your payments to the attorney, even if your payment plan has yet to be approved by the court. If your plan is not approved, you can modify it, or consider changing over to a chapter 7 liquidation. (Chapter 7 should be considered the very final option).

What is the Automatic Stay in Bankruptcy? How Can it Help Me?

Learning about the Automatic Stay in Bankruptcy

When you file for bankruptcy relief, your creditors must stop trying to collect from you. Creditors cannot continue to call you or send you collection letters. They cannot sue you, or repossess your car. They cannot garnish your wages, even if a garnishment order is already in effect.

The Bankruptcy Code protects you by force of the automatic stay provision. With very limited exceptions, this "stay" prohibits all collection activity after you file for bankruptcy relief. The automatic stay stops any lawsuit filed against you and almost any other action against you, your property and your paycheck.

The automatic stay stops all of the following emergencies:

If your home is in foreclosure the automatic stay will stop the foreclosure action. Chapter 13 bankruptcy is your best bankruptcy option to save your home from foreclosure. Ordinarily, you can file a Chapter 13 bankruptcy petition to save your home anytime prior to the sale of your home. However, even a Chapter 7 bankruptcy filing will temporarily halt foreclosure action in most cases.

If your lights and gas have been disconnected by the utility company, once you file bankruptcy the automatic stay will force the utility company to reconnect your service. If the utility company is threatening to shut-off your lights and heat, filing bankruptcy will prevent the utility company from disconnecting you. Sometimes the utility company will require a small deposit within a reasonable time after you file for bankruptcy relief. If you do not provide the deposit, they may be able to turn off your lights and heat after the bankruptcy filing.

The repo man cannot take your car while the automatic stay is in force. The automatic stay prevents your creditors from taking your car. However, this is a short-term solution. Ultimately, you must reaffirm your car loan or return the car in Chapter 7 bankruptcy. Chapter 13 bankruptcy may save your car, but you must make all of your trustee payments, or the car creditor can ask the judge to "lift the stay" so they can lawfully repossess your car.

Filing bankruptcy stops lawsuits and wage garnishments immediately. The automatic stay protects your paycheck from your creditors. You will take home a full paycheck and if the debt is dischargeable, you will probably be able to eliminate that entire outstanding debt in bankruptcy.

SSI/Food Stamps/Public Benefit Overpayments: If you receive public assistance and the agency mistakenly overpaid you, the agency can collect the overpayment. The automatic stay stops the agency from collecting the overpayment. The debt will be eliminated in bankruptcy unless the government agency demonstrates it resulted from fraud.

The automatic stay will stop the IRS from issuing a tax levy or seizing your property to satisfy delinquent tax debt. However, the IRS can still audit you, demand you file your tax returns, assess you a tax liability, and demand you pay the assessment.

The automatic stay will not stop any of the following: Criminal Proceedings:

The automatic stay will not stop a criminal action. If you are charged with driving under the influence, filing bankruptcy will not stop the state from prosecuting you or from imposing fines and court costs. If you've been charged with a crime, consult a criminal defense attorney in your area as soon as possible. However, if a criminal action can be separated into criminal and debt liabilities, the creditor may be stayed from collecting on the underlying debt.

The automatic stay will not stop a lawsuit against you seeking to establish paternity or to establish, modify, or collect child support or maintenance.

The automatic stay will remain in effect until:

1. You complete the bankruptcy and receive a discharge;

2. The bankruptcy judge lifts the stay at the request of the creditor;

3. The property you want to protect is no longer part of the bankruptcy estate.

Note: There are limited circumstances in which the automatic stay does not come into play automatically when your bankruptcy case is filed, or requires a motion from your bankruptcy attorney to keep it in effect. These circumstances generally apply to certain people who have recently filed one or more other bankruptcy cases. A bankruptcy attorney in your area can tell you whether or not these limited exceptions apply in your case.

Mortgage Foreclosure in the United States

Mortgage foreclosures continue to crash down on Americans at an alarming rate. Banks are calling in their mortgage notes and if you fear that you'll lose your home, you're not alone. $330 billion in adjustable rate mortgages have adjusted or will adjust upward in 2006. By the end of 2007, more than three million homeowners will face dramatically increased mortgage payments.

If you're like most consumers, you may not know that bankruptcy may be able to help you save your home in the face of a looming foreclosure. Chapter 13 bankruptcy is a very powerful tool if you have fallen behind on your mortgage payments and want to save your home from foreclosure.

Mortgage Foreclosure and Chapter 13 Bankruptcy

Chapter 13 bankruptcy can stop foreclosure. In fact, stopping mortgage foreclosures is the driving force behind many Chapter 13 bankruptcies, and it can stop a mortgage foreclosure proceeding in its tracks. However, the Chapter 13 bankruptcy must be filed before the mortgage company sells your home. The bankruptcy filing gives homeowners the time they need to cure delinquent mortgage payments.

A Chapter 13 bankruptcy plan provides for the repayment of the mortgage arrears and other secured debts from future income rather than from the current sale of your assets. Under Chapter 13 bankruptcy, the payments you make are fixed so that you can meet all your necessary living expenses first and then pay any surplus income to creditors. A consumer bankruptcy attorney can help you structure a repayment plan that works for you and your creditors.

Homeowners must make all mortgage payments that come due during the Chapter 13 bankruptcy repayment plan. Your mortgage company cannot contact you in regard to your pre-filing mortgage arrears while you are in the Chapter 13 bankruptcy. However, if you fail to make your post-filing mortgage payments, the mortgage company can ask the bankruptcy court to lift the protection of the bankruptcy code and resume the foreclosure proceeding. The possibility of refinancing your mortgage after you have gotten back on track with your Chapter 13 plan is realistic for many consumers.

Bankruptcy Forms

Official Bankruptcy Forms must be used to file and take action in bankruptcy cases.

Procedural Forms also may be necessary for use during the course of some bankruptcy proceedings. Additional filing instructions, along with the forms, are available in the Bankruptcy Forms Manual below (PDF format).


Voluntary Petition Forms and Instructions



Bankruptcy Law Requires a Credit Counseling Briefing Before You File

If you're planning to file for bankruptcy, the law requires that you complete a U.S. Trustee approved Credit Counseling Briefing before you file your bankruptcy petition. Your bankruptcy attorney will file the Credit Counseling certificate must be filed with your petition.

You may be confused about all of the new bankruptcy requirements and uncertain about where to turn to fulfill those requirements without aggravating your financial problems. Here at Start Fresh Today, you can purchase an online Credit Counseling Briefing delivered by an agency approved to issue certificates in compliance with the Bankruptcy Code for only $30, whether you're filing alone or with your spouse. Approval does not endorse or assure the quality of an agency's services.

Here's what you can expect from your Credit Counseling Briefing:

1. A web-based credit counseling briefing followed by a short telephone conversation.

2. An easy to navigate, interesting credit counseling briefing full of useful information.

3. Animated counselors to walk you through the briefing.

4. The ability to stop the briefing at any time and consult with the credit counseling agency, or just take a break-you can pick up where you left off later.

5. Customized feedback based on the information you provide.

6. A printable summary of the course.

7. Electronic delivery of your certificate.

Below is a link that will connect you to one of many available web-based credit counseling services:

See Also: Bankruptcy Rules by State

Glossary of Terms is here to educate consumers and to help victims recover their losses and keep their homes. If you are a victim of bank fraud or predatory lending, it is possible to sue your lender for free clear title and money damages. We show you how to stop foreclosure and sue your lender.
Our mission is to show you how to stop foreclosure, discharge unsecured debt and discharge IRS tax liens with an emergency chapter 13 bankruptcy.
We believe that if you don't know your rights, you don’t know your options.