Chapter 13 Bankruptcy North Palm Beach

Chapter 13 bankruptcy applies a practical approach to managing outstanding debt. It allows working individuals who secure consistency monthly income to propose a repayment plan that outlines how all debts will be paid. Debtors who do not make payments according to the plan will either have their claim dismissed or converted into a Chapter 7 liquidation claim.

How Chapter 13 Works

Once you have completed a financial management course, you can petition a Chapter 13 bankruptcy claim to the local court. Along with the petition you must bring a list of documents that indicate your financial situation. These documents should include accounts of assets, liabilities, current income, expenditures, all financially-binding contracts, unexpired leases, and all other things regarding financial affairs. Married who have filed jointly must bring documents for both individuals.

Not long after the application is submitted, a trustee is assigned to your case. This person measures the soundness of the case as an independent, distributes monthly payments to each creditor, and launches the “automatic stay”, which eliminates the daily stress of collection calls and increasing interest rates. After three months, the applicant, the trustee, and all of the creditors meet. The debtor’s financial status is discussed at length during the meeting. Judges do not attend in an attempt to secure an objective viewpoint.

An advisory meeting with an attorney before hand is recommended. A good legal advisor will walk you through the entire process so that you know what to expect.

The Repayment Plan

Payments must begin within 45 days after submission, regardless of whether or not it has been confirmed. Payroll deduction is usually the preferred form of payment, although debtors may choose to pay in various other methods. Plans may be modified before and after the plan’s confirmation.

Debtors usually identify three types of claims: priority claims, involving taxes and associated bankruptcy fees; secured claims, involving secured property debt; and unsecured claims, which refers to most other forms of debt. Only priority claims must be paid in full.

All of the information provided is not meant to be substituted for legal counsel. It is meant to provide only information rather than be the sole source of advice.

Should you have questions, call our North Palm Beach, FL bankruptcy lawyers at 561-353-2800.

Portions reprinted from the office of the US Department of Justice.