Chapter 13 – Questions




Do I qualify for chapter 13 bankruptcy?
Any individual is eligible for as long as the unsecured (not tied to property) are less than $336,900 and secured debts are less than $1,010,650.00.



What are the fees to file Chapter 13 bankruptcy?
A debtor must pay an initial filing fee of $235 and an administrative fee $39 upon filing a petition for Chapter 13 bankruptcy.



What is considered secured debt v. unsecured debt and how does it affect my filing for Chapter 13 bankruptcy?
Secured debts are those debts tied to property, such as a home loan or a car loan. This type of loan is secured because the property was offered as collateral. This means the lender has the right to retake the property if the debtor fails to make payments. Unsecured debts are debts not tied to a specific piece of property, such as credit cards, student loans, personal loans or lines of credit not tied to real estate.



What is the credit counseling certificate required prior to filing a Chapter 13 bankruptcy?
Any debtor who wishes to file a bankruptcy petition, regardless of chapter, must take a pre-filing counseling session regarding debt, alternatives to bankruptcy and budgeting. This can be done via phone, in person or online. You will receive a certificate indicating your completion, and you need this prior to filing.



What are the pre-discharge requirements in a chapter 13 bankruptcy?
Completion of all payments under the plan, maintenance of current support obligations during the bankruptcy, and of course, the financial management course or ‘pst-bankruptcy’ course



Can businesses file for Chapter 13 bankruptcy?
No. However an individual who owns a business may file for personal bankruptcy and include business debts that he or she is personally liable for, with a significant exception for stockbrokers and commodity brokers.



Can I keep my house and car?
Yes, if you can make up any missed payments and remain current on the mortgage throughout the term of the bankruptcy and if you can continue to make payments on your car and the lender receives the value of the car in payments over the course of the payment plan.



How does a chapter 13 operate?
A form like the means test must be filled out as part of filing the Chapter 13. It looks at average income from all sources for the last six months.



What property can I keep in a Chapter 13 bankruptcy?
Any property that you wish. Chapter 13 bankruptcy is different from a Chapter 7 because it does not call for liquidation to pay off debts, but requires payments from regular income.



What is a repayment plan in a Chapter 13 bankruptcy? 
Filing for bankruptcy under Chapter 13, requires the debtor to come up with a plan for repaying his/her debts. Under the repayment plan, certain debts take priority over other debts. Priority claims such as taxes   and costs of the bankruptcy proceeding must be paid in full and come first, secured claims are next in line, and finally unsecured claims. Under the repayment plan, the debtor makes a single payment under the plan to the bankruptcy trustee, and the trustee makes distributions to various creditors



Can I stop a foreclosure if I file Chapter 13 bankruptcy?
Yes. An automatic stay goes into effect as soon as a petition for bankruptcy is filed. This stay goes into effect by operation of law and not by judicial action. The stay stops a foreclosure proceeding and  allows the individual to bring past-due payments current over a period of time. However, if a debtor fails to make payments once the petition is filed, or the mortgage company seeks judicial relief, the property may still be lost.



Can I stop a wage garnishment if I file Chapter 13 bankruptcy?
Yes. What is known as an automatic stay, or a stop, goes into effect as soon as a petition for bankruptcy is filed. This stay goes into effect by operation of law and not by judicial action. The stay means    creditors may not initiate or continue lawsuits, wage garnishments or other collections without court permission.



What debts are non-dischargeable in a chapter 13 bankruptcy?
Domestic support obligations are not dischargeable, so you cannot discharge spousal or child support obligations. Student loans, in many cases, are not dischargeable. Taxes that are less than a certain number of years old are not dischargeable. Additionally, certain long term obligations such as a home mortgage are not dischargeable if you retain the property. Debts arising from death or personal injury caused by driving under the influence, and debts for restitution or criminal fine included in a sentence on the debtor’s conviction of a crime.

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