Bay Area Chapter 13 Bankruptcy Protection: Repaying Debts

Chapter 13 is an alternative for individuals filing for bankruptcy. This bankruptcy lasts for the duration of a debt repayment plan, which is from three to five years.  Generally, you will only have to pay unsecured creditors a small percentage of what is owed, but some back taxes must be paid in full, as well as past due balances on secured debt (such as a mortgage or car loan). Under Chapter 13, individuals filing for bankruptcy may get to keep a home or car even if they have become seriously delinquent on the loans. At the end of a successful chapter 13 bankruptcy, most debts are extinguished through a discharge of debts.  One of the major advantages of filing for bankruptcy under Chapter 13 is that if you have a second mortgage or home equity line of credit on your primary residence, this can be discharged and you never have to pay another dime on this debt.

About five to six weeks after filing for bankruptcy under Chapter 13, you’ll attend a hearing known as the meeting of creditors. You’ll be informed about this meeting through a written notice from the bankruptcy court. All of your creditors will also receive a notice of this meeting of creditors.

This is not an optional meeting. You must attend or your case may be dismissed.

Usually, creditors don’t show up for this meeting and it is conducted entirely by the bankruptcy trustee.

The trustee may also request that you bring other documents and information to this meeting.

You’ll be placed under oath and the trustee will ask you about your bankruptcy petition, debts, assets and other financial interests. The trustee will ask you under penalty of perjury if all the information contained in your bankruptcy documents is true and correct.

After the Trustee has questioned you, any creditors who attend the meeting of creditors will have a chance to ask you questions.  Usually no creditors appear.

A creditor may object to your Chapter 13 bankruptcy by filing a written objection to confirmation and filing it with the bankruptcy court. This does not happen very often.

After the meeting of creditors, the trustee may have some objections to the fact that you are filing for bankruptcy under Chapter 13. These objections typically include doubt as to whether you have the money to fund your Chapter 13 plan and questions regarding the bankruptcy documents that you filed with the court.

After the meeting of creditors, the court conducts a hearing of confirmation. The purpose of this hearing is for the judge to formally approve your Chapter 13 plan. Until the court has approved your Chapter 13 plan, your case is in limbo. This confirmation hearing usually lasts only a few minutes.