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Chapter 7 Bankruptcy Timeline
Chapter 7 is generally a much quicker process than filing chapter 13. A typical chapter 7 case will last about 6 months from the date of filing. In some cases if there are assets to sell a case take take much longer. Before a client can file a chapter 7 case they must complete a credit counseling course. A client must also pay a filing fee of $335 to file a chapter 7 case.
Automatic Stay
After the case is filed the “automatic stay” goes into effect. The automatic stay gives instant relief to a debtor who is being harassed, garnished, foreclosed, or being sued by a creditor. The automatic stay immediately stops all collection activity from the creditors. So, at least temporarily, creditors cannot garnish your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service.
Bankruptcy Court’s Control Over Your Financial Affairs: Once a debtor files chapter 7 bankruptcy the court will control your property owned and determine which if any assets can be sold to pay some or all of the creditors. You can’t sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court’s consent.
The Bankruptcy Trustee for Chapter 7 Bankruptcy
The court will put a trustee in charge of the estate of the debtor after the petition is filed. The trustee’s primary duty is to see that your creditors are paid as much as possible of what you owe them.
The trustee will examine the petition to make sure they are complete and to look for nonexempt property to sell for the benefit of creditors. The trustee will also look at your financial transactions during the previous year to see if any money should be returned and distributed to your creditors. A debtor must use caution when filing a chapter 7 to ensure all assets are protected and not sold.
The 341 Creditors Meeting
About 30 days after you file, you must attend the 341 meeting of the creditors. The bankruptcy trustee runs the meeting and, after swearing you in, he will go over some of the details of your petition, and your creditors will also have a chance to ask questions in the meeting.
What Happens to Your Nonexempt Property: If the trustee determines that you have some nonexempt property, you may be required to either surrender that property or provide the trustee with its equivalent value in cash. However, which property is exempt varies by state. That’s why it’s important you contact a bankruptcy attorney in your state to review your state’s exemptions.
How Your Secured Debts Are Treated
If you have used property as collateral for a loan, the loan is called a secured debt. The most common examples of collateral are houses and automobiles. If you’re behind on your payments, the creditor can ask to have the automatic stay lifted in order to repossess or foreclose on the property. If you are current on your payments, you can keep the property and keep making payments as before — unless you have enough equity in the property to justify its sale by the trustee. Before a client can file a chapter 13 case they must complete a credit counseling course. A client must also pay a filing fee of $310 to file a chapter 7 case.
The Chapter 7 Bankruptcy Discharge
At the end of the bankruptcy process, all of your debts are wiped out (discharged) by the court, except: debts that automatically survive bankruptcy, such as child support, most tax debts, and student loans, unless the court rules otherwise, and debts that the court has declared non-dischargeable because the creditor objected (for example, debts incurred by your fraud or malicious acts).
Bankruptcy laws vary from state to state. Get the assistance from a bankruptcy attorney experienced with the laws in Idaho. Call us at the Law Office of Kristen Pearson today at 208-916-4511 or fill out our contact form and speak to an experienced bankruptcy attorney to see if you qualify for a chapter 7 bankruptcy filing.
Chapter 7 is generally a much quicker process than filing chapter 13. A typical chapter 7 case will last about 6 months from the date of filing. In some cases if there are assets to sell a case take take much longer. Before a client can file a chapter 7 case they must complete a credit counseling course. A client must also pay a filing fee of $335 to file a chapter 7 case.
Automatic Stay
After the case is filed the “automatic stay” goes into effect. The automatic stay gives instant relief to a debtor who is being harassed, garnished, foreclosed, or being sued by a creditor. The automatic stay immediately stops all collection activity from the creditors. So, at least temporarily, creditors cannot garnish your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service.
Bankruptcy Court’s Control Over Your Financial Affairs: Once a debtor files chapter 7 bankruptcy the court will control your property owned and determine which if any assets can be sold to pay some or all of the creditors. You can’t sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court’s consent.
The Bankruptcy Trustee for Chapter 7 Bankruptcy
The court will put a trustee in charge of the estate of the debtor after the petition is filed. The trustee’s primary duty is to see that your creditors are paid as much as possible of what you owe them.
The trustee will examine the petition to make sure they are complete and to look for nonexempt property to sell for the benefit of creditors. The trustee will also look at your financial transactions during the previous year to see if any money should be returned and distributed to your creditors. A debtor must use caution when filing a chapter 7 to ensure all assets are protected and not sold.
The 341 Creditors Meeting
About 30 days after you file, you must attend the 341 meeting of the creditors. The bankruptcy trustee runs the meeting and, after swearing you in, he will go over some of the details of your petition, and your creditors will also have a chance to ask questions in the meeting.
What Happens to Your Nonexempt Property: If the trustee determines that you have some nonexempt property, you may be required to either surrender that property or provide the trustee with its equivalent value in cash. However, which property is exempt varies by state. That’s why it’s important you contact a bankruptcy attorney in your state to review your state’s exemptions.
How Your Secured Debts Are Treated
If you have used property as collateral for a loan, the loan is called a secured debt. The most common examples of collateral are houses and automobiles. If you’re behind on your payments, the creditor can ask to have the automatic stay lifted in order to repossess or foreclose on the property. If you are current on your payments, you can keep the property and keep making payments as before — unless you have enough equity in the property to justify its sale by the trustee. Before a client can file a chapter 13 case they must complete a credit counseling course. A client must also pay a filing fee of $310 to file a chapter 7 case.
The Chapter 7 Bankruptcy Discharge
At the end of the bankruptcy process, all of your debts are wiped out (discharged) by the court, except: debts that automatically survive bankruptcy, such as child support, most tax debts, and student loans, unless the court rules otherwise, and debts that the court has declared non-dischargeable because the creditor objected (for example, debts incurred by your fraud or malicious acts).
Bankruptcy laws vary from state to state. Get the assistance from a bankruptcy attorney experienced with the laws in Idaho. Call us at the Law Office of Kristen Pearson today at 208-916-4511 or fill out our contact form and speak to an experienced bankruptcy attorney to see if you qualify for a chapter 7 bankruptcy filing.
Benefits of Filing Chapter 13
- Stops Foreclosures
- Stops Repossessions
- Stops Wage Garnishments
- Stops Lawsuits and Collections
- Will Provide a Period of Three to Five Years to Repay Outstanding Debt Under Court Supervision
- Has Less of an Impact on Credit than a Chapter 7
- During the Repayment Plan, Past Due Payments on Home Loans and Car Loans Can Be Brought Current
Chapter 13 bankruptcy is known as a reorganization bankruptcy. It’s typically used by debtors whose income exceeds the limits of Chapter 7 or who has assets from being sold by the trustee if they file a chapter 7. Chapter 13 bankruptcy has its own set of rules and eligibility requirements.
Chapter 13 is sometimes called a “repayment debt relief” plan. Chapter 13 can be used to stop foreclosures, garnishments and repossessions immediately without a creditor’s consent, and it allows you to catch up defaults over a period of years through a court supervised plan. As soon as debtor files the appropriate paperwork and pays the filing fee, an automatic stay takes effect. The automatic stay prohibits creditors from further attempts to collect a debt. This means that any lawsuit proceedings must cease, a creditor may not report the debt to credit reporting agencies, and the debtor’s property and income are safe from repossession or garnishment.
In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time. The time period generally is based on a 36 or 60 month repayment schedule. The repayment period will be determined based on the size of your household, debts, and income.
Chapter 13 Repayment Plan
The most important part of a Chapter 13 bankruptcy is the repayment plan, which describes in detail how (and how much) you will pay for each of your debts. In order for your bankruptcy to go forward, the court must approve your repayment plan and also determine that you have enough income to meet your payment obligations under the plan.
In a Chapter 13 plan must pay certain debts in full. These debts are called “priority debts,”. Priority debts include child support and alimony, wages you owe to employees, and certain tax obligations. In addition, your plan must include your regular payments on secured debts, such as a car loan or mortgage, as well as repayment of any arrearages on the debts (the amount by which you’ve fallen behind in your payments).
The plan must show that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You don’t have to repay these debts in full. You just have to show that you are putting any remaining income towards their repayment.
Chapter 13 Trustee
Similar to the Chapter 7 trustee, the Chapter 13 trustee is an important part of the chapter 13 filing by the debtor. The trustee will review the proposed payment plan of the debtor, and has the ability to object and challenge the plan in bankruptcy court if he or she believes that it is improper. If the Chapter 13 plan is confirmed by the bankruptcy court, the trustee acts as an intermediary between the debtor and creditors receiving payments. Specifically, the debtor makes payments each month to the trustee. The trustee then divides up the payment, as established in the Chapter 13 plan, and issues payments to the creditors.
Restrictions During Chapter 13 Bankruptcy
Chapter 13 bankruptcy carries with it a few restrictions which are not present in Chapter 7 bankruptcy. Obviously, a debtor must continue to make the monthly payment. The debtor must not incur substantial debt without court approval, such as a car loan. The debtor must also maintain insurance on any collateral, such as a car that is collateral for a car loan.
Chapter 13 bankruptcy isn’t for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you’ll have to prove to the court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13.
Contact my office today to see if you qualify for a chapter 13 bankruptcy filing.
Chapter 13 is sometimes called a “repayment debt relief” plan. Chapter 13 can be used to stop foreclosures, garnishments and repossessions immediately without a creditor’s consent, and it allows you to catch up defaults over a period of years through a court supervised plan. As soon as debtor files the appropriate paperwork and pays the filing fee, an automatic stay takes effect. The automatic stay prohibits creditors from further attempts to collect a debt. This means that any lawsuit proceedings must cease, a creditor may not report the debt to credit reporting agencies, and the debtor’s property and income are safe from repossession or garnishment.
In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time. The time period generally is based on a 36 or 60 month repayment schedule. The repayment period will be determined based on the size of your household, debts, and income.
Chapter 13 Repayment Plan
The most important part of a Chapter 13 bankruptcy is the repayment plan, which describes in detail how (and how much) you will pay for each of your debts. In order for your bankruptcy to go forward, the court must approve your repayment plan and also determine that you have enough income to meet your payment obligations under the plan.
In a Chapter 13 plan must pay certain debts in full. These debts are called “priority debts,”. Priority debts include child support and alimony, wages you owe to employees, and certain tax obligations. In addition, your plan must include your regular payments on secured debts, such as a car loan or mortgage, as well as repayment of any arrearages on the debts (the amount by which you’ve fallen behind in your payments).
The plan must show that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You don’t have to repay these debts in full. You just have to show that you are putting any remaining income towards their repayment.
Chapter 13 Trustee
Similar to the Chapter 7 trustee, the Chapter 13 trustee is an important part of the chapter 13 filing by the debtor. The trustee will review the proposed payment plan of the debtor, and has the ability to object and challenge the plan in bankruptcy court if he or she believes that it is improper. If the Chapter 13 plan is confirmed by the bankruptcy court, the trustee acts as an intermediary between the debtor and creditors receiving payments. Specifically, the debtor makes payments each month to the trustee. The trustee then divides up the payment, as established in the Chapter 13 plan, and issues payments to the creditors.
Restrictions During Chapter 13 Bankruptcy
Chapter 13 bankruptcy carries with it a few restrictions which are not present in Chapter 7 bankruptcy. Obviously, a debtor must continue to make the monthly payment. The debtor must not incur substantial debt without court approval, such as a car loan. The debtor must also maintain insurance on any collateral, such as a car that is collateral for a car loan.
Chapter 13 bankruptcy isn’t for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you’ll have to prove to the court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13.
Contact my office today to see if you qualify for a chapter 13 bankruptcy filing.
Phone 208.916.4511| P.O. Box 2984, Hayden, Idaho 83835