Due Date And When In A Month To Pay The Chapter 13 Payment
Coming into chapter 13 bankruptcy, a common experience of individuals is payment due dates and the sometimes harsh consequences that follow from missed due dates. When money has been tight, the experience of a late payment fee and a default interest rate is frustrating and stressful. Naturally, with that experience, there can be some anxiety when I discuss that the plan payment is due the first of each month . The shadow of past interactions with credit accounts covers expectations regarding the process of paying the trustee. So, going into chapter 13 bankruptcy, there is an opportunity to gain insight in advance of how chapter 13 plan payments are administered.
Chapter 13 Bankruptcy Allows You To Reorganize Your Debts
Chapter 13 bankruptcy can be a favorable option for people who can still repay a portion of their debts. Individuals who do not make enough income to pay back their debts and need total financial relief may need to file under Chapter 7.
A Chapter 13 bankruptcy typically involves developing a repayment plan lasting for three to five years, and the plan is based on the debtors personal finances and ability to pay. This allows individuals to refinance their debts, meaning that some of their debts may be discharged while they make reasonable payments for the remaining portion.
Attend Your 341 Meeting
The 341 meeting, or , will happen about a month after you file for bankruptcy. A creditorsâ meeting is an informal meeting thatâs usually held in a courthouse office, but not in a courtroom. You must bring a government-issued picture ID and acceptable proof of your Social Security number.
Though your creditors can attend the meeting of creditors, they often donât. Most meetings are just between the filer and the trustee. The trustee will place you under oath and ask you a series of standard questions. The trustee may ask additional questions if they need more information.
Creditorsâ meetings usually last about 10 minutes. The primary issue that comes up at the meeting is where the debtor has forgotten to bring identification or acceptable proof of their social security number. Once the creditorsâ meeting is over, the bankruptcy process is almost complete.
As part of recent COVID-19 precautions, creditorsâ meetings are temporarily being held via telephone or video conference in North Carolina.
Read Also: Can Bankruptcy Stop Foreclosure In Florida
What Is Chapter 11 Bankruptcy In North Carolina
Chapter 11 is often nicknamed reorganization bankruptcy. The debtor is oftentimes in possession and has the legal authority to continue to go about business and the court may also approve new loans to aid reorganization. The reorganization allows creditors to vote on a plan with the authorization of the courts. A chapter 11 is usually targeted to corporate debtors – businesses and single-asset realty debtors , not-for-profit institutions, and persons in high-debt.
To begin a chapter 11 bankruptcy procedure a debtor must file:
- An itinerary of assets and liabilities
- An inventory of current income and expenditures
- A list of executory contracts and unexpired leases
- A proper summary of financial affairs.
The benefit of this bankruptcy is that the debtor filing is given an opportunity to continue running a business. In the state of North Carolina, bankruptcy trustees are called bankruptcy administrators and serve similar functions.
A downside exists in filing for a Chapter 11 for individuals since a chapter 11 is considerably more expensive to file than a Chapter 13 for individuals and can only be recommended for individuals in levels of debts that are very high.
When corporate institutions file for chapter 11, the state grants the following to such bodies:
You Must Have A Regular Monthly Income
When you file Chapter 13 bankruptcy, you must have a regular and sufficient monthly income to pay off your debts. You need to prove to the bankruptcy court that you can afford to pay both your monthly living expenses and repayment plan dues. If your monthly income is irregular or too low, the court will not approve your proposed repayment plan.
Read Also: How To Appeal A Bankruptcy Court Decision
How Does Filing Bankruptcy Affect Your Credit
Filing bankruptcy will affect your credit score for as long as it appears on your , though the negative impact does diminish over time. Chapter 13 bankruptcy stays there for seven years, while Chapter 7 is there for 10 years, and you should see your credit score recover throughout the years given you dont have any financial hiccups along the way.
Chapter 13 also has less of a blow because if you complete your repayment plan you will at least have established a track record of paying your bills.
If youre filing for bankruptcy, chances are your credit score wasnt that good to begin with. If it was good, it will plummet 100-200 points, regardless of which chapter you use.
In General The Process Of Filing For Chapter 13 Bankruptcy Includes:
- Determining whether you fall within the Chapter 13 debt limit. This is the dollar amount limit on how much debt an individual can have and file a Chapter 13 reorganization case. As of April 1, 2019 debt limits are increased, in order to qualify to file a wage earner plan reorganization case, you must not exceed the current limit of $419,275 in unsecured and $1,257,850 in secured debts.
- Filing a Chapter 13 bankruptcy petition, which triggers an automatic stay, provides immediate legal protection from creditors.
- Submitting an individualized plan that details proposed payments and how the various debts will be treated.
- Attending a 2-hour financial management course on the internet or in person. This is required to be taken prior to your discharge.
- Attending a meeting of creditors, also known as a 341 meeting. Here, with the help of your attorney, you will answer questions about your debts and your proposed payment plan. You may also make adjustments to your plan during this meeting.
- Confirmation of the plan. The plan must be confirmed by the North Carolina bankruptcy judge. Although many plan confirmations are not contested, a party in interest such as a trustee or creditor may object to confirmation which would necessitate a hearing.
If the North Carolina Bankruptcy Court confirms the plan, the debtor must perform as proposed in the plan. Often, payments are made through payroll deduction. If the debtor does not perform under the plan, the case will be dismissed.
Read Also: How To Get My Bankruptcy Discharge Papers
Some Of The Benefits Of Filing For Chapter 13 Bankruptcy Include:
- Stops foreclosure and provides the property owner an opportunity to bring current the arrears over time
- Stops vehicle and mobile home repossessions and may provide an opportunity to restructure these obligations
- Provides relief from student loan collection actions for the duration of the repayment plan
- Provides protection from creditors seeking to collect past-due domestic support obligations
- Provides protection from taxing authorities attempting to collect past-due taxes
- May allow for the stripping off of fully unsecured junior mortgages on residential real property
- May allow for the impairment and discharge of non-support marital obligations
- May allow for the impairment and discharge of unsecured debts
- Allows for the debtor to retain all of their assets
If you are considering filing for Chapter 13 in North Carolina, contact our board-certified North Carolina bankruptcy attorneys today to discuss your options. You may also want to review the basics of North Carolina chapter 13 bankruptcy as established by the government. We will review your case for free, and you do not need to pay us any fees upfront to file a case. Instead, all fees and costs related to the bankruptcy filing can be rolled into your eventual payment plan.
Chapter 13s Automatic Stay Can Give You And Your Family Peace Of Mind
Bankruptcy courts automatic stay can relieve you of this invasive and ongoing communication. According to the U.S. Courts, the automatic stay stops most collection activity. This form of relief is imposed by the court and has the added benefit of emotional relief.
While the automatic stay is in place, your creditors cannot:
- Start or continue debt collection lawsuits
- Start or continue to garnish your wages
- Contact you with demands for payment
- Proceed with vehicle repossession or home foreclosure
You do not have to understand the way it works or put it into place on your own. The lawyer who represents you will explain how and when the automatic stay goes into effect. He will also explain the legal actions you can take if your creditors violate the restrictions of the automatic stay.
Recommended Reading: How Long Is Chapter 7 Bankruptcy
Why You Need A Lawyer
Bankruptcy in any form is a very confusing process that requires a substantial amount of preexisting knowledge. Hiring a Chapter 13 bankruptcy lawyer can save you a lot of stress and prevents you from having to do your own research. A lawyer will make sure you file for the correct type of bankruptcy and that the filing itself is done correctly, helping you get your life back on track as quickly as possible.
Most of all, you need a lawyer so that you can focus on pulling the rest of your life together so that you can hit the ground running when your bankruptcy case gets approved. If you are given a chance to start over with a clean financial slate, you want to do it right, which means hiring a professional to make sure your case goes as smoothly as possible. The legal process is extremely daunting, so dont let yourself go into it unprepared. During your free consultation, we can discuss whether filing for Chapter 13 bankruptcy is right for you before you officially decide to hire us to help you build your case.
We Can Assist You With Your Chapter 13 Bankruptcy Questions Concerns And Filing Process In Winston
Chapter 13 Bankruptcy is a form of personal bankruptcy, which is in effect a repayment plan. A debtors financial obligations are reorganized into one monthly payment made to a Chapter 13 Trustee. The debtors plan is arranged so that they pay off their debt over a three-to-five-year period, and at the completion of the plan, the debtor receives a discharge of all eligible debts owed at the time the case was filed.
Chapter 13 Bankruptcy is also used to prevent or stop a foreclosure by setting up a payment plan to catch up, or cure, the mortgage arrearage . It may also be used to prevent repossession of a vehicle or other personal property. In some cases, Chapter 13 Bankruptcy can also lower vehicle or other personal property payments. A Chapter 13 plan can also provide a repayment plan for back taxes.
Secured Debts Under a Chapter 13 Bankruptcy Plan
In Chapter 13 bankruptcy cases, secured claims are treated in one of two ways:
All secured debt other than a first or second mortgage is paid through the debtors Chapter 13 plan as required by the bankruptcy code. It is the debtors attorneys responsibility to advise the debtor how these other secured debts are treated under the proposed plan.
Chapter 13 Bankruptcy Facts & Myths
The most important aspects of a Chapter 13 plan are itemized below:
Recommended Reading: Can You File Bankruptcy During A Divorce
What Happens If I Cant Make My Payments
If you have already filed for Chapter 13 bankruptcy and find that you cant keep up with your payments, then the court will most likely reassess your plan. The bankruptcy trustee that is overseeing your case may choose to modify the payment plan. Or he may even discharge your debts on the basis of hardship.
If the courts dont choose to let you change your plan, you may want to try to convert your case to a Chapter 7 bankruptcy plan. In addition, you could also ask the courts to dismiss your case however, you would still owe your debt plus the interest that was not incurred while your case was pending.
How Do I Get Discharged From Chapter 13 Bankruptcy
When you complete your Chapter 13 repayment plan, youll receive a discharge order that will wipe out the remaining balance of your qualifying debts. A Chapter 13 discharge is the final order given by the bankruptcy court eliminating your obligation to pay off your dischargeable debts under the Chapter 13 plan. Creditors are prohibited from collecting debts once your bankruptcy case is finalized. When debt is discharged, a lender can no longer make attempts to collect the debt and the debtor is no longer responsible for paying it back.
Not all debts can be discharged when you file for bankruptcy. A qualified North Carolina bankruptcy attorney can help you determine the types of debts that can be discharged in this chapter. Filing Chapter 13 bankruptcy can wipe out certain debts that are not dischargeable in other bankruptcy chapters such as Chapter 7. Debts from property damage, non-dischargeable taxes, divorce property settlement, unsuccessful bankruptcy case, or retirement account loans can be wiped out only in Chapter 13 bankruptcy.
Filing For Chapter 13 Bankruptcy North Carolina Process
The process to file Chapter 13 bankruptcy is similar across the state. So, a Chapter 13 bankruptcy in Charlotte may be similar to Raleigh. We will cover the decision to file Chapter 13 bankruptcy, locating a Chapter 13 bankruptcy attorney, credit counseling and debtor education course requirements, completing your bankruptcy forms, and filing your Chapter 13 bankruptcy petition.
What Happens After Filing
Chapter 13 bankruptcy stays on your credit report for up to seven years from the filing date. Most Chapter 13 bankruptcies last between three to five years before completing, which leaves a remaining two to four years where it will still appear on your credit report. You will be able to apply for new loans once you complete your bankruptcy, or during your bankruptcy with court permission. The effects of bankruptcy will diminish over time, qualifying you for better loans.
The most effective tactics to rebuild your credit after bankruptcy would include being cautious when getting new credit cards and keeping your accounts current, changing your spending habits, and checking your credit report for mistakes. Errors on your report can hinder your ability to rebuild your credit, so a careful review of your report and contacting the creditor and reporting agencies to get any mistakes corrected will help the rebuilding process. You will also get many new credit card offers, so be aware of high interest rates and annual fees. Consider adjusting your spending habits to align with your goals, since it will help avoid any bankruptcies in the future.
Recommended Reading: Is It Better To Settle Debt Or File Bankruptcy
Locating A Chapter 13 Bankruptcy Attorney In North Carolina
Even though you are not required to hire a bankruptcy lawyer, filing Chapter 13 bankruptcy without a lawyer is not recommended. Chapter 13 bankruptcy cases are very complex. Calculating a Chapter 13 plan requires a great deal of experience and knowledge. Someone who does not understand Chapter 13 bankruptcy law could pay much more than is necessary to get out of debt.
Also, the court expects you to understand and know the law the applies in your case if you represent yourself. The court will not explain bankruptcy law to you, and it will hold you accountable for the errors you make in your case. Therefore, it is best to have an experienced Chapter 13 bankruptcy lawyer handle your case.
What are the benefits of hiring a Chapter 13 bankruptcy attorney in North Carolina?
- A trusted legal advocate who understands bankruptcy laws
- Reminds you of deadlines and hearings in your case
- Determines if you should file under Chapter 13 or Chapter 7
- Calculates the lowest Chapter 13 plan payment allowed by law
- Maximizes asset protection so you can keep all your property, including your home and vehicle
- Completes and files all required bankruptcy forms
- Guides you through the process by explaining each step and providing support at hearings
- Protects you from aggressive creditors who might want more money than they are entitled to receive
The Chapter 13 Process
First, find a bankruptcy lawyer who will give you a free evaluation and estimate on what youll have to pay to file.
The cost to file Chapter 13 bankruptcy consists of a $313 filing fee and fees charged by a bankruptcy attorney. As for documents and other information, you must provide:
- A list of creditors and the amount of their claims.
- Proof of income.
- List any properties you own and any leases in your name.
- List your monthly living expenses.
- Provide tax information, specifically your federal tax return and any statements of unpaid taxes.
Chapter 13 petitioners cannot have had a bankruptcy petition dismissed in the 180 days before filing. They must also take a course approved by the U.S. Department of Justice U.S. Trustee Program in that 180-day span.
After you file your paperwork, youll then get a letter from the court clerk notifying you, your creditors and your court-appointed trustee that collection activities on your accounts have been suspended. That means creditors have to stop hounding you for payments.
You will propose a repayment plan, and a bankruptcy judge or administrator will hold a hearing to determine whether its fair and meets legal standards. Creditors can object, but most judges allow filers to alter their plans several times.
After that, its just a matter of sticking to your repayment plan. If youre late or miss payments, the trustee could move to dismiss your Chapter 13 case. You dont want that.
Recommended Reading: What Does Bankruptcy Chapter 13 Mean