Bankruptcy is often a tool that may help you get out of a tricky situation. Your situation is unique, which means you need to understand which bankruptcy option fits your needs the most.
Chapter 13, as the United States Courts describes, is an option that offers you the opportunity to pay off your debts while still saving your home from foreclosure. Knowing what to expect over the coming months may help you organize your schedule and financial situation.
Mandatory credit counseling
Before your application for Chapter 13 bankruptcy, you must have a certificate of credit counseling. You earn these from courses approved by the Department of Justice U.S. Trustee Program. These courses advise you on how to manage your debt and help you draft a potential debt repayment plan.
Initial paperwork filing
With your certificate in hand, you need three schedules and a statement:
- Assets and liabilities
- Current income and expenses
- Executory contracts and unexpired leases
- Past and current financial affairs
Once filed, the courts put a stay on qualifying debts to pause collections. This is what helps pause your foreclosure.
Starting payments and appeals
You start your repayment plan soon after you file, even if the courts have not approved it yet. Within 21 to 50 days, you meet with creditors who then have a certain window to object to the plan. With objections out of the way, the courts hold a hearing on whether or not to confirm the bankruptcy.
Chapter 13 bankruptcy may take an average of one to five months, depending on how complex your case is. When handling that complexity, it is important to learn more about bankruptcy and your situation in particular.