What to Expect in Your Chapter 13
Typically, you will meet with the attorney two to four times in the office before your case is filed to review, prepare and sign documents. You must pay any required attorney fee down-payment and court filing fees before a case will be filed for you.
Documents that must be provided to your attorney before a case can be filed include the following:
- Titles to all vehicles
- Verification of income from all sources for 6 months (wages, social security, pension, unemployment, etc.)
- Recorded mortgages, Recorded Deed, Tax bill showing SEV, and mortgage statements
- 2 months bank statements
- Proof of insurance for vehicles and house
- Cash Surrender Value for Whole Life Insurance Policies
- Investment balances
- Creditor statements/collection letters/lawsuit documents
- Last 2 year’s tax returns
You must also complete the first of two credit counseling sessions with an approved credit counselor. This first credit counseling session may be a combination of internet and phone answers/counseling and takes approximately 45 minutes. It is mandatory that every person filing a bankruptcy must complete this counseling and obtain a certificate. Information about approved counseling agencies and costs are contained in this website.
It takes about three months until your Chapter 13 plan is approved, and much occurs during this time frame.
First, your payments are due the first 15-30 days of your case. A payroll deduction order will take effect. If you do not receive a paycheck, then an ACH bank debit must be taken. If you have neither a job nor a bank account, approval for direct payments must be obtained from the judge. It is your responsibility to ensure the payments are made, and to make sure deductions are being taken from check or bank account. If a problem occurs, you must mail the payment to the Trustee and inform your attorney. Failure to make payments is the primary cause of dismissal in Chapter 13’s.
Also during this time frame, more documentation to support stated expenses, income and assets is sometimes requested. You are required to sign a power of authority form allowing the IRS to send your refunds to the Trustee during the pendency of your entire Chapter 13. (Your attorney can file a motion each year that you be allowed to retain all or a portion of your tax refund, if proper documentation is supplied.)
Two hearings are mandatory. You must bring your Drivers License, Social Security Card and proof of all payments to these hearings.
The first is the “Meeting of Creditors” which is held 30-45 days after your case is filed. This is presided over by the Trustee or a staff attorney of the Trustee. You will meet with your attorney ½ hour before the scheduled hearing time to prepare for the hearing and fill out a questionnaire. Nothing is decided at this hearing and the Trustee is not the Judge. You are not usually required to say much beyond “Yes” and “No” answers, although you are sometimes questioned about your expenses, income, transactions before the bankruptcy, your assets, and what caused you to file your case. We usually receive a “Status Sheet” a day or two prior which gives us an indication of the specific issues the Trustee might address at this hearing.
It is probable that the Trustee will file an objection in your case. This is a matter of course and to be expected. Additionally, mortgage, tax, and car creditors often file objections. Again, this is standard and not something to worry about. That is what you hire an attorney for.
The second hearing is called the “Confirmation Hearing”, which takes place about 1 ½ months after the “Meeting of Creditors”. (We try our best to make it so our clients do not need to appear at this hearing, but the time off should be scheduled by you.) If we must appear, for most judges, status conferences are held with the creditors, debtor attorneys and trustee and matters are typically resolved and the Plan is confirmed, or sometimes an adjournment granted for outstanding issues to be resolved. It is uncommon to actually go in front of the judge. This usually occurs only when resolution of issues with the Trustee or creditors cannot be made. The single greatest cause of going in front of the judge is failure to make payments, so make sure your payments are being made timely.
After your case is confirmed, your 36-60 month plan begins. Any changes in financial circumstances must be brought to your attorney’s attention to ensure the health of your case. Meeting with the attorney for case review at least once a year is required. Also, Court approval must be obtained to retain federal tax refunds, to incur debt of more than $1,000, and to get a car. Keeping in contact with your attorney and staying actively involved in your case ensures the greatest success for you.