The goal in a Chapter 13 bankruptcy is to pay back some, if not all, of your creditors over a 3 – 5 year period. The obvious question is, “Why would anyone want to pay back their debts if they can get them discharged in a chapter 7?” There are many reasons why someone may want to file a Chapter 13 Bankruptcy instead of a chapter 7.

You may want a Chapter 13 Bankruptcy if…

• You are behind on some of your secured debt payments and need time to get caught up, i.e. facing foreclosure or repossession.
• You are upside down on your home and have a second mortgage/equity line/HELOC you want to eliminate.
• You have taken the chapter 7 means test and do not qualify for a chapter 7 discharge because your income is too high.
• You filed a chapter 7 previously. There is a waiting period of 6 to 8 years between filing repeated chapter 7s. If you are not yet eligible to file another chapter 7, but you desperately need protection from creditors, then a chapter 13 would be the right solution.
• You ethically and morally feel that paying back your debts is the right thing for you to do., but you just need some breathing room to do so. For you, a chapter 13 bankruptcy is the right solution.

What is involved in filing a Chapter Bankruptcy 13?

A Chapter 13 Bankruptcy uses most of the same forms as chapter 7, along with one more form known as The Plan. So, as far as paperwork goes, they are similar. But, this is where the similarity ends.

The fundamental element in a Chapter 13 Bankruptcy is The Plan. The Plan is the one or two page document in which you propose to the court how you are going to pay the creditors. Unlike the petition and schedules which are standardized and prescribed by the official federal bankruptcy forms, there is no such a thing as a standard Chapter 13 Bankruptcy plan for all courts. Each court uses its own plan and the plan used in one district often looks nothing like the plan used in another.

Any natural person or married couple can file a Chapter 13 Bankruptcy, provided that they have “regular income.” What is regular income? Regular income is any income that you receive that is likely to continue on a periodic basis. This includes employment income, commissions, disability benefits, self-employment income and regular support payments.

Chapter 13 Bankruptcy Basics

Qualifying for a Chapter 13 Bankruptcy as Determined by the Means Test. Under the new bankruptcy laws, there is now a means test. If you pass the means test, you qualify to have your debts eliminated through a Chapter 7 bankruptcy. If you do not pass the means test, you will be required to file a Chapter 13 Bankruptcy instead of a Chapter 7. The bankruptcy means test is not an exam that you take, but is a 7-page document with about 85 questions and calculations that you answer and perform. The answers to these questions require the brain power of a computer, since it relies not only on financial information under your control, but requires access to complex data compiled by the IRS, the Census Bureau, the Department of Health and Human Services and others.

If you were to do this by yourself, just finding out if you qualify to file Chapter 13 bankruptcy could take you weeks of frustrating, nail-biting agony. When you retain us, we take care of determining your eligibility by processing the information you provide through our means test calculator.

Preparing the Chapter 13 Bankruptcy Petition

The new Chapter 13 bankruptcy law is paper intensive. It has caused a typical bankruptcy petition to balloon from approximately 25 – 35 pages under the old law, to about 50 – 75 pages under the new. You need not be concerned about this because we take all the responsibility of preparing the paperwork ourselves. You will complete an online questionnaire for us and we prepare the bankruptcy petition from the information you provide.

After your Chapter 13 bankruptcy petition has been prepared, we will file it electronically with the bankruptcy court. The benefit of filing electronically is that we can file 7 days a week, 24 hours a day, even when the court is closed. About 45 days after filing, you will need to attend the mandatory creditor meeting. This is tone of the easiest part of the process. The meeting generally lasts only 5 to 10 minutes, and usually no creditors attend. It is primarily a formality. As your attorney, we will attend this meeting with you and will be at your side during the entire process.

We will be with you every step of the way during the Chapter 13 bankruptcy process, making sure everything is done completely and correctly, and that you are well informed.