If you are falling behind on your payments majorly, bankruptcy is the best bet. Here you can catch up on your arrears and manage your debts in a structured manner. Given below are the commonly asked questions before foiling forb bankruptcy under chapter 13 –
- What is the procedure to file for chapter 13 bankruptcy?
The first and foremost step while filing for bankruptcy is the credit counseling meeting. This must be taken within 180 days prior to filing for bankruptcy. Once you have the certificate, you can apply for bankruptcy, pay the fees and submit your documents to proceed.
- What is the role of the bankruptcy Trustee?
A bankruptcy trustee is your complete guide while you file for bankruptcy. It is mostly the trustee with who you will need to connect as they will be collecting all documents and data, holding the creditor’s meeting, walk you through the entire filing procedure. Also, the trustee will guide you in formulating the repayment plan. In short, they will help you from A-Z while you file for bankruptcy.
- What documents do I need to submit?
You will need to furnish all documents related to the bankruptcy case, which include –
- Credit counseling certificate
- Income and expense proof
- List of creditors
- Tax Return of 4 years
- List and details of all expenses
- All property and assets owned by you
- Proposal for a repayment plan (how you plan to pay off the loan within 3-5 years)
- What are the fees for filing under chapter 13?
The fee for filing under chapter 13 is $310. However, you can pay the fees in 4 installments. But it is important to note to pay the last installment within 120 days from the day you filed for bankruptcy.
- Will debt collection from creditors stop if I file for bankruptcy?
Yes, when you file for bankruptcy an automatic stay will come into effect which will stop all collection attempts from the creditors. However, you will still need to pay debts like – domestic support obligations, tax, pension loans, and student loans.
- Will I be able to discharge the student loan debt?
The student loan is a non-dischargeable priority debt and must be paid in full. However, if you are able to prove that paying the student loan is causing you “undue hardship” then the court may discharge the debts under certain situations.
- Will the creditors begin collections if I miss a payment under the repayment plan?
Yes, under most circumstances, the creditor will start collection attempts if you default on your payments under the repayment plan. Therefore it is important that you make the payments on time. Since, missing a payment, the creditors can file for “action of dismissal”, to get the automatic stay removed
If you have any more doubts as to filing for bankruptcy under chapter 13, you can consult an attorney who can guide you step by step through the process. To get in touch, log on to – call 888-297-6203.