CHAPTER 13 BANKRUPTCY FREQUENTLY ASKED QUESTIONS
DISCLAIMER: THE INFORMATION SET FORTH BELOW IS NOT INTENDED TO BE LEGAL ADVICE.
1. HOW LONG DOES A CHAPTER 13 BANKRUPTCY TAKE?
When filing a Chapter 13 bankruptcy, the filer, known as the debtor, proposes to make monthly payments to repay certain creditors for a period of 36 to 60 months.
2. IF I AM IN FORECLOSURE, HOW DOES A CHAPTER 13 BANKRUPTCY HELP ME SAVE MY HOME?
When a debtor files a Chapter 13 bankruptcy petition it operates as a stay against all creditors', including the debtor's mortgage company, actions to collect. Accordingly, no further foreclosure proceedings, including sheriff sales, can continue without Court permission.
The debtor, in his/her Chapter 13 bankruptcy repayment plan, proposes to repay his/her mortgage arrears and the fees, costs and attorney's fees that he/she owes the mortgage company at the time that the bankruptcy petition is filed.
3. WHICH OF MY DEBTS GET PAID FIRST?
The debtor's debts are paid in order of priority: Secured Creditors (the debtor's motgage company or the company that hold's the debtor's car note) get paid first after administrative expensive, priority debts ( taxes and other similar debts) and then unsecured creditors (credit cardsget paid last.
4. HOW LONG WILL MY BANKRUPTCY STAY ON MY CREDIT REPORT?
According to the Fair Credit Reporting Act, information regarding a bankruptcy will remain on your credit report for 10 years.
5. HOW LONG WILL IT TAKE ME TO RE-ESTABLISH MY CREDIT?
Usually that depends on the prospective creditor(s) who will be extending credit to the debtor
6. HOW DOES BANKRUPTCY STOP MY FORECLOSURE?
Immediately upon commencing the Chapter 13 bankruptcy, the debtor receives the benefit of an Automatic Stay. The Automatic Stay prevents all creditors from attempting to collect a debt from the debtor without the Bankruptcy Court's permission. If the debtor's mortgage company has commenced a foreclosure action, that litigation can not continue while the debtor enjoys the protection of the Automatic Stay.
7. CAN I GET MY REPOSSESSED CAR RETURNED?
Yes, if the creditor has not yet sold your car.
8. WHAT HAPPENS TO THE STUDENT LOANS THAT I OWE WHEN I FILE FOR BANKRUPTCY?
You must still pay them. Student loans are non-dischargable.
9. WHAT IF I DISAGREE WITH THE AMOUNT THAT A CREDITOR SAYS THAT I OWE?
Once the debtor files for Chapter 13 Bankruptcy relief, all creditors are required to file proof of their claim against the debtor. If the debtor disagrees with the amounts set forth in the creditors's proof of claim, then the debtor can file an objection to the proof of claim and let the Court decide whether the debt is accurate.
10. WHAT DOES THE TRUSTEE DO?
The Chapter 13 Standing Trustee is a neutral person appointed by the United States Trustee to, in general terms, serve as a person who supervises the debtor's bankruptcy. Among other duties, the Trustee collects the debtor's Chapter 13 plan payments and after the plan is confirmed, disburses the funds to the debtor's creditors in order of priority.
11. WHAT DO I NEED TO FILE A CHAPTER 13 BANKRUPTCY?
a. A list of all your creditors, including, the amount of the debt, the creditors' addresses, and the nature of the debts.
b. The source of your income.
c. The amount and frequency of your income.
d. A list of all of your property (real and personal).
e. Your living expenses.
f. The Chapter 13 Bankruptcy filing fee, $274.00. (Which can be paid in installments.)
g. Your bankruptcy attorney's fee.
IF YOU HAVE A QUESTION THAT NOT FOUND HERE. FEEL FREE TO ASK US. ADDITIONAL FAQ'S WILL BE ADDED PERIODICALLY.