Chapter 13 Bankruptcy FAQs

What is the United States Bankruptcy Code?

The United States Bankruptcy Code, also known as Title 11 of the United States Code, is a complex set of laws that govern the procedures for filing bankruptcy in the U.S. 

Where are bankruptcy cases filed?

Bankruptcy cases are filed through the federal court system. To start the process, the debtor files a petition in bankruptcy court. 

What are the most common bankruptcy options?

Chapter 7 and Chapter 13 are the two most common categories of bankruptcy. Chapter 7 bankruptcy is a liquidation process, while Chapter 13 is a reorganization. 

How does Chapter 13 bankruptcy work?

In a Chapter 13 bankruptcy debts are resolved often for pennies on the dollar by proposing and obtaining  approval of a three to five-year monthly repayment plan. Chapter 13’s are especially useful for people behind on their mortgage or with nonexempt assets they want to keep. 

What is a Chapter 13 repayment plan?

The Chapter 13 repayment plan sets forth how much you are going to pay each month for the duration of the plan, for how long, and how much will be paid to the various classes of creditors. The plan is calculated based on your monthly income and expenses, the type and amount of debt that is owed and the value of any nonexempt assets. 

How will the repayment plan be approved?

At some point after the Meeting of Creditors, the trustee will issue something called a “Recommendation”.  This is the trustee’s statement as to whether the plan and reorganization should be approved “as is”, or whether changes should be made or additional information is needed.  Recommendations rarely support approval of the plan “as is”, as normally at a minimum the trustee is going to want some additional information or documentation.  Ultimately, a bankruptcy court judge will sign an Order Confirming your Chapter 13 plan, signifying that your plan has been approved by the court.

When will my payments begin?

Payments in a Chapter 13 proceeding start 30 days after the Chapter 13 is filed. Normally, it takes somewhere from six to nine months to obtain approval of the Chapter 13 Plan.  Prior to approval, the trustee holds the payments you are making.

How long will it take to get my discharge in a Chapter 13 bankruptcy?

A Chapter 13 debtor must complete the three to five-year repayment plan before the court will grant a discharge. But while the debtor is performing the plan, creditors without permission of the court cannot take steps to collect pre-petition debts. 

Can my plan be modified if my circumstances change?

Once your plan is confirmed, it can be modified based on changed circumstances.  A trustee rarely will move to modify a plan based on an increase in income but it is possible. Most likely you will be required to supply the trustee with copies of your tax returns during the life of your Chapter 13, or at least for the next three years.

Chapter 13 Bankruptcy Terms

Chapter 13 bankruptcy trustee. The Chapter 13 trustee is an officer of the court appointed to administer your Chapter 13 case. The Chapter 13 trustee’s duties include overseeing the debtor’s repayment plan, collecting payments from debtors, disbursing funds to creditors in accordance with the repayment plan, and monitoring monthly income and expenses. 

Chapter 13 plan confirmation. Within 45 days of the meeting of creditors, a confirmation hearing presided over by a bankruptcy judge will be held to determine if the court will approve your repayment plan. This hearing may be conducted later to permit objections to the plan to be resolved.

Creditor.  An individual or business who is owed money by the debtor. 

Discharge of Debtor. A bankruptcy court order that releases a debtor from the obligation to repay the dischargeable debt. A Discharge of Debtor prohibits creditors from continuing collection attempts. 

Meeting of Creditors. About 4 to 5 weeks after you file for Chapter 13 bankruptcy, you must attend what bankruptcy law calls the “meeting of creditors.” This administrative hearing is conducted by the Chapter 13 trustee assigned to your case; no judge is present. An attorney from our office (if retained) will accompany you at the meeting. The trustee asks you very simple questions which can be answered with “yes” or “no.” Any of your creditors attending the meeting may then briefly ask you a few questions. This is rare, however, since in most consumer Chapter 13 cases none of the creditors appear at the meeting. 

Petition. The document filed with the bankruptcy court to start the formal process in that court. 

Schedules and Statements. Form documents that a debtor must file so the trustee and creditors will know  (a)  what the debtors assets are, (b) what assets are exempt, (c) what the debtor’s liabilities are, (d) their classification under the bankruptcy and (e) other information relevant to the process. 

Secured debt. Secured debt is money owed to a creditor that is backed by collateral, such as a house, a car, or other personal property. The collateral acts as a form of loan security in case the debtor fails to pay. A mortgage is an example of a secured debt. 

Unsecured debt. Unsecured debt is money owed to a creditor that is not backed by any collateral, such as a house, a car, or other personal property. Examples of unsecured debt are medical bills and credit card balances.

To schedule an initial consultation with a bankruptcy attorney, please call Hymson Goldstein Pantiliat & Lohr at 480-991-9077 or contact us via Email. We can provide the individually tailored advice you need to make strategic decisions for debt relief. We pride ourselves on responsive, personalized attention to each matter and understand that every member of our team plays a valuable role in your client experience. From our attorneys, to our legal assistants, to our administrative staff, we are committed to providing you with exceptional legal service.

Hymson Goldstein Pantiliat & Lohr, PLLC is a Debt Relief Agency under the bankruptcy code.

David B. Goldstein is an experienced bankruptcy attorney concentrating his practice in commercial and individual bankruptcies. He is listed with the United States Bankruptcy Court for the District of Arizona as a court-appointed mediator.