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Bankruptcy Relief

Chapter 13 bankruptcy is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan. One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

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Chapter 13 Bankruptcy Explained

Debts that are generally consolidated in a Chapter 13 bankruptcy are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 consolidation.

The individual(s) or business filing for bankruptcy is referred to as the “Debtor”. Once the Debtor files a “petition”, the bankruptcy court clerk mails out notices to all creditors advising of the “meeting of creditors”, which the Debtor is required to attend.

The meeting of creditors is conducted by an individual known as the “Trustee”, who is assigned to oversee and review the petition, ask questions of the Debtor, and conduct a due diligence investigation of the cases assigned.

At this meeting, the Trustee will ask questions of you under oath in which you are required to respond. If the Trustee finds that you have no assets, then you should receive a discharge 60 days after the meeting of creditors, if no creditors object during that period of time.

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