Chapter 13 bankruptcy: Five things you need to know

1. Plan Ahead: If you are reading this blog, you have already taken the first step to begin the process of Chapter 13 preparation. The more information you have the easier the process will be. More importantly, the more you know the less anxious you will feel as you proceed forward through the legal process of bankruptcy.

An experienced bankruptcy lawyer is the best source for reliable information. Another great source is the U.S. Bankruptcy Court website (uscourts.gov/bankruptcy). You can find plenty of mis information on the internet. Be careful. We provide a free initial office consultation to help you identify your options and to explain the bankruptcy process.

2. Review your financials: If you file Chapter 13, you will have to prepare a monthly budget of expenses. Separate your fixed expenses from your discretionary expenses. Fixed expenses include home mortgage, car payment, food, utilities, transportation, insurance, and medical expenses. Unsecured credit card debt is discretionary along with entertainment, and deferrable expenses.

You will need to know how much available income you will have to fund your Chapter 13 Plan.

3. Documents you will need for Filing Chapter 13: Here is a list of the documents you will need for your first meeting with your bankruptcy lawyer. without the requisite documents the meeting will not be as productive:

• Last two years of federal tax returns. If you own a business you will need both Personal & Business returns.
• Last three months bank statements (checking account), if you have more than one account, bring all accounts.
• Last two months of all income statements, pay stubs for all sources of income for you or for both husband and wife, if married.
• List of all debts, mortgage statements, credit card statements, etc.
• Any court papers, if you are being sued or have been served with court papers or judgments you.

4. Advanced Planning: If you have a home mortgage, and you want to keep your house, continue to pay the mortgage. If you have a car loan and you want to keep the car, continue to pay the car loan. If you have unsecured debt, and you can’t afford to pay everything skip the credit card payments. If you have plans to file Bankruptcy, the size of your credit card debt is the least significant issue.

5. How Many Court Appearance will be Required: When you file Chapter 13, you will be required to go to court a minimum of two appearances. The first meeting will be before the U.S. Trustee, at a creditors hearing. This is an informal session, not in the court room. The second appearance will be before the Judge at the Confirmation Hearing. If all your papers are in order and you are current with your chapter 13 plan payments the hearing will be short and your lawyer will do all the talking for you.