How To Develop A Chapter 13 Bankruptcy Plan
A central part of the typical Chapter 13 bankruptcy filing is the repayment plan. If the judge approves your petition, the court will order you to follow a plan to repay part of what you owe to your creditors. The law expects you to submit a plan, and the court will review it. Likewise, the creditors will have the right to question it.
The judge will be the one to decide how the plan will go. You can help your cause, though, by filing a well-structured plan. Here's how to develop a repayment plan.
Obtain Counsel
Try not to file a Chapter 13 repayment plan on your own. Consult with a Chapter 13 bankruptcy attorney. A lawyer can help you to write the proposal and present it to the court. Likewise, they can advise you about what a plan normally entails. Down to filling in forms and providing support evidence, an attorney can help you take some of the sting out of the process.
Assess Your Financial Situation
Before you petition the court for relief, it's a good idea to assess your finances. Usually, the judge will want to see some evidence that a repayment plan is even necessary. You can present basic financial information to help the judge see what's going on. For example, a Chapter 13 bankruptcy attorney will probably encourage you to include a couple of years' worth of tax returns with your petition.
Identify All the Creditors
Be aware that your plan only applies to creditors named in the case. This protects their rights by ensuring that you and the court will have to notify them of all proceedings. Also, it gives your plan a better chance of success because any unnamed creditor has the right to keep pursuing a debt regardless of what happened in court if you didn't file the case the right way. Bear in mind that any creditor you don't name in the case will also be within their legal rights to continue pursuing the collection of outstanding debts.
Three Years' Worth of Payments
The standard Chapter 13 plan requires the petitioner to make payments over the course of three years. In a few cases, a court might stretch this out as far as 5 years, but you shouldn't bet on that happening. You also can file a shorter plan if you believe you can cover all of your unsecured obligations in full. Most folks should focus on the three-year plan, though. Figure out how much disposable income you'll have during the repayment period and use that number to propose a repayment amount.
For more information, contact a company like McManus & Associates.
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