How is a Chapter 13 different from Chapter 7 bankruptcy?
A Chapter 7 lets you get rid of (or discharge) debts you can't pay.
A Chapter 13 plan might let you keep your property and pay your debts.
A Chapter 13 sets up a payment plan OK'd by the court. This lets you pay all or part of your debts over time. A Chapter 13 protects you from being sued or having your property taken.
With a Chapter 13 bankruptcy you make one payment each pay period. This way you pay all or part of your debts. While you pay, your creditors can't take your property or your paycheck.
Who can file a Chapter 13 Plan?
Anyone with enough regular income to pay basic living expenses and Chapter 13 payments.
What happens when you file a Chapter 13 bankruptcy?
- You must talk to an approved credit counselor 2 times. Your lawyer will give you a list of these counselors.
- You must give your lawyer a list of all your debts, and everything you own (see list below).
- Your lawyer will help you figure out what type or bankruptcy will be best for you.
- Your lawyer writes your bankruptcy papers, and you sign them.
- Your lawyer files the papers with the court.
- The court tells everyone listed in your papers that you have filed bankruptcy. The court tells them when to come to a creditors' meeting.
- You and your lawyer must go to the creditors' meeting. The Bankruptcy Trustee will ask you questions to make sure your papers are complete and correct.
- If the court OK's your payment plan, you make payments to the Trustee. The trustee makes sure the money goes to your creditors each month. Usually the payments are taken out of your pay check and sent to the trustee.
What happens when you file a Chapter 7 bankruptcy?
- You must talk to an approved credit counselor 2 times. Your lawyer will give you a list of these counselors.
- You must give your lawyer a list of all your debts, and everything you own (see list below).
- Your lawyer will help you figure out what type or bankruptcy will be best for you.
- Your lawyer writes your bankruptcy papers, and you sign them.
- Your lawyer files the papers with the court.
- The court tells everyone listed in your papers that you have filed bankruptcy. The court tells them when to come to a creditors' meeting.
- You and your lawyer must go to the creditors' meeting. The Bankruptcy Trustee will ask you questions to make sure your papers are complete and correct.
- Once your bankruptcy is done, the court will say you do not have to pay your debts if:
There are no legal problems with your papers, and the debts are the kind that can be discharged.
List of items to bring to your lawyer:
- The name, address, and account number for each creditor.
- A list of any collection agencies, or attorneys who have contacted you about your debt.
- A list of all your assets.
- Your last 6 months pay stubs and most recent tax forms.
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