With very limited exceptions, once you file your Chapter 13 Bankruptcy case, your bankruptcy protection is immediate. In most cases, once you file, creditors can no longer continue to make efforts to collect on the debts. So, yes the phone calls, lawsuits, collection letters, and any garnishments from creditors like the Internal Revenue Service will stop!! If you are behind on your mortgage and facing foreclosure, that process must stop immediately upon the filing of your case. If an auto lender is about to repossess your vehicle, they will not be able to do so once your case is filed.
At the same time, your case is filed, we will file what is called a plan of reorganization with the Court. This plan details how you propose to pay your creditors. Every case is unique with its own set of facts and issues, so these plans are tailored to your specific circumstances. I will work with you to structure your budget and a plan that provides the greatest benefit to you while meeting the requirements of the bankruptcy code for your specific case.
Trustee Appointment And The Creditor’s Meeting
So, where do I pay this monthly payment, you ask? Immediately when your Chapter 13 bankruptcy case is filed, a trustee is appointed. The trustee in a Chapter 13 case has many roles, but generally, they are the party that takes your payments each month, pays the creditors in accordance with the proposed plan of reorganization, and ensures that your plan is in line with the requirements of the bankruptcy code before it is ultimately approved by the Court. In order for the trustee to do their job, they will conduct a meeting called the meeting of creditors. In that meeting, the trustee will confirm all of the information you have provided to the court in your bankruptcy filing and also may address any questions they have regarding your budget, the means test, or any other issues which might be present in your case. We will prepare you for this meeting, so no need to worry about what to expect.
The Confirmation Hearing
A month or two after the creditor’s meeting, there will be another hearing called a confirmation hearing. This hearing will be held before your bankruptcy Judge. If payments are current and the trustee is recommending approval of the proposed plan, it is likely to be approved by the Judge at that hearing. If there are issues that need to be addressed before the Court can approve your plan, well, that is exactly why we have Judges, so we will have the hearing and the Judge will decide whether or not to approve the proposed plan. I will be able to guide you every step along the way so you know what to expect.
Once the plan is approved, just make sure the payments stay current and all should be good. If any changes in employment or income arise, or if any emergencies occur that might affect your ability to continue making your payments, just make sure to communicate with my office so we can address those issues head-on. The success of your chapter 13 case often comes down to whether you are proactive when issues arise. My goal in representing you is successful completion of your plan, getting to that finish line, and having all these debt issues behind you. So, together, we can most often find a way to get there.
An Experienced Bankruptcy Attorney Will Guide You Through The Process
It is important to engage experienced bankruptcy counsel for your chapter 13 case so it can go as smoothly as possible, and you can derive the greatest benefit possible from the process. With 22 years of experience practicing bankruptcy law, I have structured thousands of plans to help people manage their debt issues effectively and responsibly. Feel free to contact us via phone or our website if you would like to discuss options regarding your specific financial situation.