Chapter 13 Bankruptcy

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Chapter 13 Bankruptcy

In a chapter 13 bankruptcy, a person makes monthly payments to the chapter 13 trustee who distributes the funds to the person’s creditors.

The debtor gets to decide whether she or he gets to keep his/her house or car. It can be a painless procedure if the right resources and tools are used. Chapter 13 bankruptcy cases are often complex and involve numerous issues and factors. Bankruptcy is a “no fault” situation so it does not matter why the person is filing bankruptcy or why these debts were incurred. Typically, the amount of the monthly payment has nothing to do with the amount of the unsecured debt.

The filing of the chapter 13 bankruptcy stops all collection activities, such as, garnishments, lawsuits, hate-mail, repossession, harassing telephone calls, and any other type of debt collection. Debt collectors will promptly receive notice that a debtor has filed a bankruptcy.

If a creditor or debt collector continues to call you or send you bills after the bankruptcy has been filed, then contact my office with any questions and we may sue the creditor/debt collector over the dispute and you may be able to recover money from this violation of federal law. We are always happy to be at your service.

Under federal law, a debtor must file his or her bankruptcy within the federal district in which he or she lives. Indiana, much like Ohio, has two federal districts: Northern and Southern. For instance, debtors whose home addresses are in Marion County reside in Indiana’s Southern District, and it is a federal requirement that they file there. A debtor’s residence also determines the location of his or her meeting of creditors. Although the meeting of creditors may feel like an administrative or judicial proceeding, debtors appear not before a Chief Judge, committee, or judge, but instead in front of a trustee. These meetings normally take place at a federal courthouse. However, due to Covid-19, meetings of creditors are currently being held telephonically or via Zoom. A debtor’s counsel will be present at the meeting. It is necessary for that counsel to be admitted in the appropriate federal district in order to file bankruptcy cases there. Additionally, in any jurisdiction, if debtors are legally married and continue to share an address, they may file their bankruptcy case jointly. However, one may only file jointly with one’s spouse, not just any family member.

If a creditor or debt collector continues to call you or send you bills after the bankruptcy has been filed, then contact my office and we may sue the creditor/debt collector and you may be able to recovery money from this violation of federal law.

Why Choose My Chapter 13 Bankruptcy Firm?

Chapter 13 is not for everyone. Typically, chapter 13 is used for the following purposes:

  • Stop foreclosure and save your home
  • Protect your car from repossession
  • Eliminate your 2nd mortgage
  • Lower your car loan’s interest rate
  • Pay back debts that are not dischargeable in chapter 7 such as tax debt

Additionally, people who have filed chapter 7 in the past 8 years must file chapter 13 and really high income earners may have to file chapter 13.

A Brief Description of Chapter 13 Bankruptcy

The case begins with the filing of the bankruptcy petition and the filing of a proposed payment plan. . Debtors have an obligation to provide counsel with documents showing proof of their financial information and certain private property before the petition can be filed electronically. For example, a tax return, a certificate of credit counseling, and statements of bank accounts are requirements. Furthermore, a copy of your utility bills maybe used to acquire your credit reports. The copy of a credit report will be taken from the appropriate database to show proof of a debtor’s unsecured debts including credit card debt. Other documents and articles may also become requirements pending on the case. These necessary requirements are protecting debtors against potential problems over the life of their bankruptcy. Attorneys document all of the information in the petition as necessary to show that no fraud is being committed. Before a case is electronically filed in Indiana, the court requires funding of a filing fee to be paid to the clerk of the court. After that is paid, a hearing called the first meeting of creditors or 341 hearing is scheduled in about 4 weeks. Typically, creditors do not attend this meeting.

The hearing is not in front of a judge and it is not in a courtroom. The hearing is conducted by a trustee who is an attorney who conducts the hearing and his/her role is to ensure that the creditors are properly treated in the proposed payment plan.
The counselors in this office have had numerous hearings with each trustee so once we see who your case is assigned to we will be able to explain exactly what you can expect from the meeting and this process. The trustees each have their own set of FAQs, also known as frequently asked questions. For example, trustees frequently ask questions such as: Where is the debtor employed? How is the debtor paid? Is the debtor an employee or self-employed. These questions are usually pretty easy for debtors to answer.

What Happens After a Chapter 13 Bankruptcy?

A chapter 13 bankruptcy case takes 3 to 5 years depending on various factors. The debtor makes payments to the chapter 13 trustee while the case is pending. Throughout the 3 to 5 years, the debtor will want to stay on time with these payments so as not to become delinquent. Upon completion of the chapter 13 plan, the client will receive an order of discharge of his/her debts, which means that all debts at that point will be eliminated, not exchanged or consolidated. However, some debts may not be able to be eliminated if not paid off in full over the 3 to 5 years. Examples of debt that may not be able to be eliminated are alimony, most tax debt, and student loans, assuming the debtor did not enjoy a free education at no cost.

Bankruptcy is not the end of credit. It is just the beginning. Typically, most clients receive numerous offers for credit after the filing of the bankruptcy case. If the client is careful about credit, the client’s credit score will rebound quickly. After the bankruptcy has been completed, my office will obtain your credit reports to ensure that all your creditors are properly reporting your debts.

Credit reporting errors occur very frequently and we advise all clients that, for the next five years, if they ever try to obtain financing and they are declined, then contact us. We will not charge the client to review their credit reports to determine whether a creditor or debt collector is reporting an error on the credit report.

If any debt collector or creditor continues to contact you after your bankruptcy has been completed, please contact this office with that information and we will sue the creditor or debt collector and you may be able to recover money from this violation of federal law.

Frequently Asked Questions Regarding Chapter 13 Bankruptcy

Q: Will I appear before a judge?
A: You will appear before a trustee. The only times in which a bankruptcy judge may become involved are instances during the 3 to five year period of the bankruptcy that call for something to be modified.

Q: What should I bring to my 341 hearing or meeting of creditors?
A: Due to Covid-19, hearings are being held telephonically or via Zoom. It is not necessary for you to have any particular documents on you during those times. However, once the meetings go back to being in-person, it will be necessary for you to bring your identification and social security card with.

Q: May I file my bankruptcy jointly with someone else?
A: Only if that someone else is your spouse. Choosing to file with your spouse may or may not be in your best interest. Your attorney will go over the procedures with you to ensure that you will be choosing wisely.

Q: What sort of accessibility will I have to the trustee?
A: The only time you will speak directly to the trustee is at your meeting. Do not attempt to contact a trustee outside of the meeting. Any questions should be directed to your attorney who may contact the trustee if necessary.

Q: Does my level of education or where I went to school have any effect on my bankruptcy?
A: No.

Q: I live in Indiana now, but I incurred most of my debt years ago when I lived in Ohio. May I file in Ohio instead of Indiana where I currently live?
A: No. Those who live in Indiana must file in Indiana.


Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for Chapter 13 bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

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