The "Who" Answer for a Chapter 13 Bankruptcy.

Any individual, even if self-employed or operating an unincorporated business, is eligible to file for Chapter 13 protection. You should have unsecured debts less than $307,675 and secured debts less than $922,975 to qualify for this protection. Regular and consistent income is another important component as you will be agreeing to a monthly payment plan that must be honored for three to five years into the future. A corporation or partnership may not file for Chapter 13 bankruptcy protection. You could also be barred from filing for Chapter 13 bankruptcy if, within the most recent 180 days, you had a petition dismissed for your willful failure to appear before or comply with orders of the bankruptcy court. Therefore, it is critical that you file all Chapter 13 bankruptcy forms properly and follow all Chapter 13 bankruptcy rules to the letter.

Filing For Chapter 13 Bankruptcy

As always, the process begins with the filing of a petition with the bankruptcy court in the area where you have a domicile or residence. If you live near Detroit, you would use Michigan bankruptcy lawyers to handle your petition. Right after filing your petition, you must also file the following.

• A schedule of assets and liabilities;
• A schedule of current income and expenses;
• A schedule of any contracts and unexpired leases you may have; and
• A personal financial statement;
• Since the revised law went into effect (October 2005), you must also file a “certificate of credit counseling”;
A copy of your debt repayment plan (now created through the credit counseling process); and
• Evidence of your current monthly net income.

When Must Creditors Stop Collection Activity?

Your creditors must cease all ongoing collection activity as soon as you file your completed petition with the appropriate bankruptcy court. Also, they can no longer initiate any new collection action after you file. You need to prepare and file all other required documents (schedule of assets and liabilities and income and expenses, personal financial statement, proof of current income, reorganization plan) on time with the court to guarantee your continued protection. Finally, per the new regulations, you must provide the court with evidence of completion of a credit counseling course. Please remember that, should you not make Chapter 13 payments to any “secured” creditors (mortgage lender, auto finance lender, etc.), your protection from them can stop and they can initiate new collection action to protect their collateral.

Chapter 13 Bankruptcy Discharge.

A Chapter 13 bankruptcy discharge is much more complex than a Chapter 7 discharge. This applies whether you are using Michigan bankruptcy lawyers, Oregon bankruptcy lawyers, or any other qualified attorney based on your jurisdiction. Discharge of debts has become even more convoluted since the implementation of bankruptcy reform laws which took effect in October 2005. In general, when discharged, you will be “released” from all debts included in your plan (which you filed with the court). Be aware, however, that some debts cannot be discharged, such as some long term obligations (a home mortgage), alimony, child support, taxes, and government funded or guaranteed student loans. Also, in Chapter 13, but not Chapter 7 bankruptcy, property settlements in divorce or separation proceedings can also be discharged.