Before filing for chapter 13 bankruptcy, you must first make sure that you are eligible to do so. You’ll want to keep in mind both the amount of debt you have and your income. If your debt is too high, you may not be eligible to file. Conversely, if your income is too low, you may not be able to propose a payment plan that the court will approve of. If you’re uncertain of whether you’re eligible, consider contact chapter 13 lawyers to help you examine your financial situation.
When you file for chapter 13 bankruptcy, you’ll be required to propose a repayment plan. This plan outlines how you’ll repay your debt over a 3—5 year period. This plan must be made in good faith—or, in other words, it must be made with the best interests of the creditors in mind. Once the 3—5 year period is complete, you should be mostly debt-free. This type of bankruptcy is often ideal for those who have the ability to eventually pay off their debt, but simply need a little more time to do so.
The first step to filing is to fill out the required forms. At this point, you may wish to contact a chapter 13 bankruptcy attorney for assistance. You will also be required to take a credit course before you can submit your forms. Once everything is submitted, you will be required to attend a couple of hearings. During these, your trustee—or the individual in charge of helping you repay your debt—will discuss your payment plan with you. Creditors may appear to ask questions. Afterward, the court will determine whether or not to approve your plan. If the plan is approved, then you will begin making payments.