The Chapter 13
Bankruptcy Process
The Chapter 13 Bankruptcy Process
Likewise, the Major Steps in the Bankruptcy Process are the same for all chapters of the bankruptcy code. However, because Chapter 13 bankruptcy centers on the Chapter 13 plan, there are specifics steps that exist in Chapter 13 bankruptcy process regarding the submittal and ultimate confirmation of the Chapter 13 plan. The initial deadline to file Chapter 13 plan is within 14 days after you file your bankruptcy case. This 14-day deadline to file Chapter 13 plan can be extended through an order from bankruptcy court.
The Chapter plan outlines how you will pay your creditors during the Chapter 13 plan. Remember, unsecured debt like credit card debt and medical bills, typically only receive a small portion of the total balance in Chapter 13 bankruptcy. Firstly, all payments under the Chapter 13 plan are made directly to the Chapter 13 trustee. Moreover, then trustee distributes those payments to your creditors in accordance with your Chapter 13 plan. Once the Chapter 13 plan is confirmed by the bankruptcy court, the confirmed plan becomes your new contract with your creditors.
Duration
Although it typically takes approximately 90 days to get the Chapter 13 plan confirmed by the bankruptcy court, the required payments outlined under the plan begin 30 days after the day you filed the Chapter 13 bankruptcy case (even though the court hasn’t approved the plan yet). The reason it typically takes about 90 days to have the plan confirmed is because your general creditors have 70 days to file their Proof of claim in your bankruptcy case, and “governmental units” like the IRS have 180 days to file their Proof of claim. In Chapter 13, Meeting of creditors is scheduled approximately 20-40 days after Chapter 13 plan is filed.
Confirmation Hearing
Each month after plan is filed, a plan confirmation hearing is held, which we attend on your behalf. To sum up, the purpose of the confirmation hearing is to ensure that your plan is moving in the right direction in terms of meeting the requirements of the bankruptcy code and properly addressing the Proof of claims filed in your case. Amended plans are often filed to make adjustments to the plan, as necessary.
Once Proof of claim deadline has passed, your Chapter 13 plan is then ready to be confirmed by bankruptcy court. If ultimately confirmed, your Chapter 13 plan becomes your new contract with your creditors. You will continue to send your monthly plan payments to the Chapter 13 trustee. Subsequently, trustee will distribute the payments to your creditors pursuant to the confirmed plan. After you complete all of your plan payments over the three to five-year duration of the plan, we can then seek entry of your Order of Discharge. As in Chapter 7, Order of Discharge will discharge any and all remaining balances on your dischargeable unsecured debt.
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