Five Tips for Surviving Your Chapter 13 Bankruptcy

Can you survive your Chapter 13 bankruptcy? Chapter 13 bankruptcy is not a quick process. Instead, you will be spending several years reorganizing your debts and catching up on missed payments. But, in return, you will keep your assets and not have to liquidate property.

While there are pros and cons to Chapter 13 bankruptcy, once you have filed, you must follow through if you want relief from your creditors. The process of Chapter 13 can last anywhere from three to five years, depending on the terms of your agreement. You will have a bankruptcy trustee to whom you make your payments, and he or she will distribute them in accordance with the agreement. If you do not make all necessary payments, your case could be dismissed.

To ensure that you survive the process and make it to the end successfully, there are five things that you need to know.

1. Always be Honest in Your Bankruptcy Paperwork

Bankruptcy is not a time to hide assets or lie to the court. Instead, you need to be honest in all documents that you complete for the bankruptcy. If you misrepresent information, you could have a dismissal of your case and possibly face criminal prosecution.

2. Only Propose and Accept a Repayment Plan You Can Afford

Do not overreach when you create a repayment plan. Instead, you need to budget appropriately and ensure that you can make each payment on time and without issue. If you have a lot of debt obligations that you are paying through your plan, you may not have total control over the monthly payment amount. That is why it is important to hire an attorney to get assistance with the repayment plan and its terms; that way, you are not paying more than you can afford.

3. Create a Budget and Stick to It

Once you are on a repayment plan, you need to create a budget and stick to it. Making payments on time is critical if you want to eventually have your case discharged and your debts satisfied. If you make excessive purchases outside of your monthly budget, you may not have enough to cover your monthly obligation to the court.

4. Notify Your Attorney When Circumstances Have Changed

The one issue with Chapter 13 is that you could be making payments for three to five years. In that timeframe, your circumstances could change (e.g., you lose your job, get a new job, get married, get divorced, etc.).

Any time you have a major circumstance change, you should notify your attorney. Your attorney can then let the bankruptcy trustee know, and you can work on a modification to make the terms more affordable.

5. Provide Your Documents in a Timely Manner

If the courts require that you provide certain documents, such as your tax returns, do so as quickly as possible and never past the due date. By providing them when they are required, you can avoid an unnecessary case dismissal.

Speak with a Bankruptcy Attorney

If you are considering Chapter 13 bankruptcy for your financial problems, you will need to consult an attorney first.  Whether you qualify for Chapter 7 or you need to file Chapter 13, we are here to work as your advocates. Contact us today for a no-obligation consultation.