Successfully Completing a Chapter 13 Bankruptcy
You have filed a Chapter 13 bankruptcy and it has been confirmed. If possible, you want to complete your Chapter 13 to insure you receive a discharge at the end of your plan.
You will need to:
- Make sure your payments get to the bankruptcy trustee. One of the best ways to do this is with a Wage Order which will deduct the payments by payroll deductions. If you change employment during the term of your Chapter 13, you will need to contact the Chapter 13 office or your attorney in order to put a new Wage Order in place. Payments can be mailed to the trustee, but it is important to note that you are responsible for making sure your payments get to the Chapter 13 office. Be sure and include your Case Number if you mail a check. Failure to make payments on time will result in your case being dismissed for Failure to Pay.
- Provide required documents to the trustee. Usually you are required to submit a budget annually, turn over a copy of your tax return and remit any tax refund you receive to the trustee. Do not spend your tax return as this is one of the reasons a Chapter 13 can be dismissed. When in doubt, call your attorney for guidance.
- While you are in bankruptcy, you must keep the court in the loop because your money is controlled by the bankruptcy court. Contact your attorney if there are changes in your personal situation which could impact your Chapter 13 bankruptcy. If you lose your job, become disable, get married, get divorced, have a baby, need a new car, or need to borrow money, call your attorney. Don’t to panic because change is inevitable – especially if you are in a Chapter 13 for 3-5 years. Your attorney will work with you to make sure your plan is successful BUT you must keep him informed.
- As you near the end of your plan, check with your attorney in order to take the required Debtor Education Class and fill out and sign any additional documents which are required in order to get your Discharge.
It is important for you to understand the difference between a Discharge and a Dismissal of your case. If your case is dismissed you are no longer protected from creditors. You will still owe your debts and will be subject to harassing calls from creditors. They will be permitted to foreclose on your home, repossess your car, and garnish your wages.
Nationwide the success rate for completion of a Chapter 13 bankruptcy is low but it can be done. Work closely with the bankruptcy trustee and your attorney to insure completion of your Chapter 13 and a Discharge of your Debts so you can have a fresh start.