How do Bankruptcy Courts Handle Chapter 13 Bankruptcies?
Many people experiencing overwhelming debt choose to file Chapter 13 bankruptcy. This is also known as “Wage Earner” bankruptcy. Bankruptcy courts have a standard schedule when proceeding with these cases.
Before accepting a Chapter 13 filing, the Bankruptcy court requires that you undergo credit counseling. At the heart of a Chapter 13 filing is your debt repayment plan, which you should develop over the course of your counseling.
Once this is complete, you can file with the Bankruptcy court. The judge will immediately issue a “stay,” which stops any collection action against you or your property. You then are required to submit a good deal of paperwork to the Bankruptcy court, including detailed information regarding your assets, debts, and personal information.
You also submit your debt repayment plan to the Bankruptcy court. If the court accepts your plan, the judge will assign a trustee to your case. Over the life of the repayment plan you are responsible for making timely payments to the trustee, who will then distributes those payments to your creditors.
Once you have completed your repayments, there will be a final hearing in the Bankruptcy court. At that time, the judge will discharge all remaining debts.
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Last Modified: 09-23-2008 03:29 PM PDT
