What You Need To Know About Chapter 13 Bankruptcy
If you’re one of the 1.2 million Americans who is considering filing chapter 13 bankruptcy this year, you will need reliable and up-to-date information about filing chapter 13. Because filing chapter 13 involves the court-supervised reorganization of your assets, the correct preparation of your bankruptcy petition is of the utmost importance. Filing chapter 13 is further complicated by the fact that though federal law governs most of the process, there are differences from state to state that can affect your bankruptcy filing that you need to take into account. Before filing chapter 13, you will need to seek credit counseling at a state-approved credit counseling agency. This is mandatory and without proof of credit counseling, the court won’t accept your petition. An advantage of the credit counseling is that if there’s an alternative to filing chapter 13, the counseling agency will inform you about it.
After this, you will have to take a means test that determines whether you should be filing chapter 13 or another bankruptcy chapter. The means test is also mandatory, and its outcome determines whether your income is sufficient to support a reorganization bankruptcy with a probable repayment plan. Once you have met these requirements, you can start preparing your bankruptcy petition, which is the most important part of filing chapter 13. This entails listing all your debts and creditors, as well as your income over the last six months and every single asset you own. When filing chapter 13, it is vital that you understand there are exemptions from your estate that will not be included in the liquidation – if you are prepared and properly claim them as exemptions. These exemptions usually include your home, a number of personal items, as well as certain pensions and savings funds. Another aspect to consider if you’re married and filing chapter 13 is whether your spouse will be affected and by how much. However, the answer to this question will depend on the state you live in. When your bankruptcy petition is complete, the next step in filing chapter 13 is submitting your petition to the court. A Trustee will be appointed to oversee the reorganization of your assets. Because filing chapter 13 affects not only you, your creditors will be invited by the Trustee to attend the meeting of creditors. Upon successful completion of this meeting and your court hearing, the judge will issue you a discharge.