The Chapter 13 Process
The Chapter 13 filing process generally takes 95 days from the filing of the petition to the approval of the repayment plan. But the bankruptcy wont actually be discharged until the three- to five-year plan is completed.
Heres what to expect over a typical Chapter 13 bankruptcy proceeding.
- A list of creditors and how much is owed to each
- Evidence of income
Typical Filing Timelines By Types Of Bankruptcy
Chapter 7 is a form of liquidation bankruptcy. Under Chapter 7 bankruptcy, all nonexempt assets will be reviewed and sold off with the help of a bankruptcy trustee. The bankruptcy court will pay your creditors with the proceeds of those sales and discharge remaining unpaid unsecured debts.
Under Chapter 7 Bankruptcy, only unsecured debts are discharged. Secured debts such as a mortgage or a car loan require you to either relinquish them or continue paying according to the terms of the loan.
A Chapter 7 bankruptcy filing may be completed in three to seven months.
Chapter 13 bankruptcy reorganizes your debts. When you file for Chapter 13, the court evaluates your total debt obligations and sets a court-ordered repayment plan that typically spans 3-5 years. Under this plan, repayment is typically equal to the value of your nonexempt assets.
A Chapter 13 filing can take anywhere from 24-60 months to complete depending on the amount of your debt and the repayment plan that is established.
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Phase : Discharge Case Closed
Once the bankruptcy trustee has determined that thereâs no property they can sell for the benefit of creditors, theyâll file a Report of No Distribution. This lets everyone know that itâs a no-asset case and can happen anytime after the 341 meeting. No asset cases are typically closed by the court within 1 – 2 weeks or so.
If the trustee hasnât filed a Report of No Distribution, the case will stay open until the trustee signals to the court that theyâve completed their work on the case. How long this process takes can vary greatly, as it depends on what kind of property the trustee is selling and what else is going on in the case.
In some cases, all the trustee is waiting for is the filer’s tax return for the year their bankruptcy case is filed in. If no specific exemption for a tax refund exists, a portion of the refund may be used by the trustee to pay creditors.
Usually, not much else is required from the filer during this process. But, if the trustee asks for additional information or otherwise requests assistance with the sale of property, the filer has a duty to help.
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How Long Does It Take To File Chapter 13 Bankruptcy
The decision to file bankruptcy is a weighty one. And if youre unsure how it works, starting the process could be both intimidating and overwhelming. So how long does it take to file Chapter 13 bankruptcy? And what can you expect during the timeline?
A Charlotte NC bankruptcy attorney at the Law Office of Jack G. Lezman, PLLC can guide you through the process and explain your options.
What Happens During The Chapter 13 Bankruptcy Filing Process
As with any bankruptcy process, the hardest work is done before the filing day as you and your lawyer diligently collect numerous documents down to the finest details of your financial history. Youll also determine the most feasible plan for you to make payments over the next three to five years to pay off your debts.
You are also required to take a credit counseling course before filing your petition.
Petitions and Other Paperwork
Once every administrative requirement is met and you and your lawyer have laid out your plan your petition day has arrived. Filing can move forward that day or in the days that follow.
Once your Chapter 13 bankruptcy is filed, creditors are prevented from contacting you about your debt. They are forced to rely on your payment plan to get their money. An Automatic Stay also prevents foreclosure, eviction, most wage garnishment and can keep your utilities being shut off.
Appointment of Trustee
A few days after submitting your petition you should receive a Notice of Appointment of Trustee from the court. The trustee will check over your documents and may request more information.
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Ohio Bankruptcy: A Clean Slate
After your debts are discharged by the courts, you have a fresh start. Bankruptcy offers you the chance to get your financial health back in place and begin again.
Although many people believe that filing for bankruptcy is a long, difficult process, it generally is not. As you can see, there are only a few basic steps you need to go through. With the help of an experienced Ohio bankruptcy lawyer, it becomes simple for anyone.
Does The Debtor Have The Right To A Discharge Or Can Creditors Object To The Discharge
In chapter 7 cases, the debtor does not have an absolute right to a discharge. An objection to the debtors discharge may be filed by a creditor, by the trustee in the case, or by the U.S. trustee. Creditors receive a notice shortly after the case is filed that sets forth much important information, including the deadline for objecting to the discharge. To object to the debtors discharge, a creditor must file a complaint in the bankruptcy court before the deadline set out in the notice. Filing a complaint starts a lawsuit referred to in bankruptcy as an adversary proceeding.
The court may deny a chapter 7 discharge for any of the reasons described in section 727 of the Bankruptcy Code, including failure to provide requested tax documents failure to complete a course on personal financial management transfer or concealment of property with intent to hinder, delay, or defraud creditors destruction or concealment of books or records perjury and other fraudulent acts failure to account for the loss of assets violation of a court order or an earlier discharge in an earlier case commenced within certain time frames before the date the petition was filed. If the issue of the debtors right to a discharge goes to trial, the objecting party has the burden of proving all the facts essential to the objection.
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Understand The Differences Between Chapter 7 And Chapter 13
Chapter 7 and Chapter 13 bankruptcy are the most common consumer bankruptcy filed in the United States. You need to know the difference because one chapter is more expensive and also often takes much longer.
Chapter 7 Bankruptcy in California
A Chapter 7 bankruptcy is referred to as liquidation bankruptcy. In many cases, bankruptcy filers do not lose their home or vehicle by using bankruptcy exemptions. We will cover how your belongings may be at risk below.
Heres what you need to know about filing Chapter 7 bankruptcy in California.
Chapter 13 Bankruptcy in California
A Chapter 13 bankruptcy is known as a wage earners plan. In many cases, you will pay back a portion of your unsecured debts in a payment plan.
Heres what you need to know about filing Chapter 13 bankruptcy in California.
For more information, you may consider reading, Is it better to file Chapter 7 or Chapter 13? and Is Chapter 13 Worth It? You should also consider the pros and cons of bankruptcy.
The Benefits Of Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to erase overwhelming debt and get a fresh start managing your finances. It can relieve you of the responsibility to repay your creditors and eliminate most or all your current debt. This option is designed to give debtors a clean financial slate.
A critical benefit of filing bankruptcy is that all debt collection efforts must stop as soon as you file. This benefit can provide relief from demanding letters and phone calls that only add stress to an already challenging financial situation.
Another advantage of Chapter 7 bankruptcy is that it does not require you to file a repayment plan. Instead, you are allowed to retain your assets, and the courts discharge all your qualifying debts.
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The Benefits Of Hiring A Bankruptcy Lawyer
While you may represent yourself when declaring bankruptcy, hiring a bankruptcy lawyer can help make the Chapter 7 bankruptcy process more manageable. An attorney from our firm will answer any questions and concerns you have as you go through the process. We can also handle any complexities your case involves.
Our attorney will do the following once you become our client:
- Help you understand the benefits and limitations of filing bankruptcy
- Recommend the best bankruptcy chapter for your financial situation
- Provide information on dischargeable and nondischargeable debts
- Review the bankruptcy consequences for your vehicle, home, and other property
- Define how bankruptcy could affect your taxes, credit report, etc.
Our Lenoir bankruptcy lawyer will also help you complete and file necessary forms, advise you about continuing to pay debts, and familiarize you with relevant laws and procedures. While youre not required to have an attorney present at the Chapter 7 creditors meeting, we can represent you at this legal proceeding and any others during your case.
Are All Of The Debtor’s Debts Discharged Or Only Some
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons .
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523 applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
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Is There Life After Filing Bankruptcy
Your credit score may decrease initially when you file your bankruptcy depending on your score before filing. Either way, it should start to increase shortly afterwards. Steps you can take to improve your credit include financing a new vehicle, making timely payments on a new credit card, opening a secured line of credit through your bank, and filing bankruptcy with a $0 down payment plan. Our office offers a $0 down payment plan that credit reports your payments to help your score rise faster after bankruptcy. Thus, when considering an attorney, carefully choice a debt relief lawyer with a credit rebuilding program that has been tried and gets results.
You will have to wait 2 years after your bankruptcy before you can qualify for a home loan. However, this shouldnt prevent you from renting. Many of our clients are able to finance a new vehicle the day after they file and receive plenty of offers for new lines of credit. For more information about a Zero Down Bankruptcy or $0 Down bankruptcy, please consider contacting our bankruptcy attorney.
How Long Does It Take To File Bankruptcy: Chapter 13
Chapter 13 bankruptcy takes longer to complete than Chapter 7 bankruptcy. This is because the court needs to arrange a monthly repayment before issuing a discharge. The process may take up to five years to complete.
The best thing about Chapter 13 is that the court will set, a payment schedule and you will also have a finishing date. The court will create a payment schedule and that is also the time you will have a finishing date. Like Chapter 7 bankruptcy, Chapter 13 will leave a negative mark on your credit report for 7 years.
Regardless how long it takes to complete your filing, both file types leave a credit damage.
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You Must Attend A Creditors Meeting
About a month or so after you file, you will need to attend a creditors meeting where a trustee will ask about the information you submitted you will have to answer under oath. This meeting is known as the 341 meeting.
Within two months of attending the creditors meeting, you must complete a financial counseling course. After youve received budget counseling, you wait to receive a discharge of your debts from the bankruptcy court.
Many people who file for Chapter 7 bankruptcy can retain all their assets. However, you cannot sell or give away any property without clearing it with the trustee during this time. Most bankruptcy cases generally receive a discharge order from the court about 60 days after the initial creditors meeting.
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When Must I Complete The Pre
The pre-filing bankruptcy course can be done at any time within six months of filing the bankruptcy petition. Typically, I will prepare the petition and send it to the client for review. At that point, we will be pretty close to filing the actual petition, so I will advise them to take the pre-filing bankruptcy course. Once they take the pre-filing bankruptcy course, I will get a certificate that will need to be filed along with the bankruptcy petition in court.
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Your Credit Will Take A Hit
Bankruptcy can have a more severe negative affect on your credit than mere missed payments. A Chapter 13 bankruptcy will appear on your credit reports as a derogatory mark for seven years from the date you filed the petition. The number of points your will drop will vary depending on your current scores and other factors relating to your financial situation. For more on this, check out our article on how to build credit after a bankruptcy.
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How Does The Debtor Get A Discharge
Unless there is litigation involving objections to the discharge, the debtor will usually automatically receive a discharge. The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all creditors, the U.S. trustee, the trustee in the case, and the trustees attorney, if any. The debtor and the debtors attorney also receive copies of the discharge order. The notice, which is simply a copy of the final order of discharge, is not specific as to those debts determined by the court to be non-dischargeable, i.e., not covered by the discharge. The notice informs creditors generally that the debts owed to them have been discharged and that they should not attempt any further collection. They are cautioned in the notice that continuing collection efforts could subject them to punishment for contempt. Any inadvertent failure on the part of the clerk to send the debtor or any creditor a copy of the discharge order promptly within the time required by the rules does not affect the validity of the order granting the discharge.
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Contact A Los Angeles Bankruptcy Lawyer
If you are looking for a Los Angeles bankruptcy lawyer or anywhere across Southern California please contact us today. For over 20 years and 3,000 cases, the attorneys with the Law Offices of Steers and Associates have saved clients millions of dollars through bankruptcy cases. They have stood by their clients through difficult times and helped them reach the other side to financial freedom.
Elena Steers is an expert in bankruptcy law and debt negotiation in California and has worked on both sides of the bankruptcy process. She uses her knowledge of how these cases play out to give clients a voice in a process that can sometimes make them feel helpless. Take a moment and read her extensive amount of legal experience.
Elena Steers is a highly experienced bankruptcy attorney, the founder of Law Offices of Steers & Associates, and previously worked as a Bankruptcy Trustee Assistant at the Office of the Chapter 13 Trustee in Los Angeles. Her current affiliations include the State Bar of California, National Association of Consumer Bankruptcy Attorneys, and Central District Consumer Bankruptcy Attorneys Association.
Why File For Bankruptcy
The simple answer is to have certain debts discharge completely or to enter into a payment plan to pay all or some of these debts. The debtor may be able to protect property from collection by unsecured creditors may be able to eliminate liens on property secured by debt or may be able to simply get some breathing room to halt such actions as repossessions, garnishments, attachments, utility shutoffs, foreclosures or evictions.
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