An Overview of the Chapter 13 Bankruptcy Process

When you file for Chapter 13 bankruptcy, your court papers must disclose what you own (real estate and personal property), your debts, and your financial transactions going back several years. You also will have to show that you’ve filed income tax returns for the previous four years. Your proposed repayment plan is due 15 days after you file your first papers.

But before you can even file for bankruptcy, you must complete some basic credit counseling. And you’ll have to get some personal financial management counseling after you file but before you get your Chapter 13 discharge.

The Creditors’ Meeting

About a month after you file for Chapter 13 bankruptcy, you are required to attend a creditors’ meeting, conducted by the trustee assigned to your case by the court. At this meeting the trustee will go over your proposed plan and explain how the trustee thinks it should be changed. Your mortgage lender may also send a representative to ask you questions about your plans for the property—and express any objections the lender has to your proposed plan. Plans seldom sail through the first time.

The Confirmation Hearing

About a month after the creditors’ meeting, you may be required to attend a confirmation hearing in the bankruptcy court. Despite its religious connotation, the confirmation hearing is where the bankruptcy judge decides whether or not to approve your latest proposed plan. If there is a problem with your plan—for example, you don’t show enough income to make the mandatory payments—the judge or trustee may shoot it down.

But unless the judge decides that you’ll never be able to submit a feasible plan, you will have an opportunity to change it so that it will conform to the judge’s view of the federal bankruptcy code requirements. If you are given the chance to amend, another confirmation hearing will be scheduled, usually about 30 days later.

If your amendment doesn’t satisfy the judge, or you have not properly notified your creditors of the amendment, you could either allow your Chapter 13 case to be dismissed or convert it to a Chapter 7 bankruptcy. If you do convert your case to Chapter 7 bankruptcy, you would have another two to three months in court even if the lender managed to get court permission to go ahead with the foreclosure before your Chapter 7 discharge.

The Typical Chapter 13 Timeline
Day 1 Papers filed to start the bankruptcy
Day 16 Repayment plan must be filed
Day 31 First plan payment must be made
Day 46 Creditors’ meeting held
Day 76 Confirmation hearing held
Day 106 Second confirmation hearing held, if necessary
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