Chapter 13 BankruptcyIn general, there are two types of bankruptcies that a Georgian consumers normally file and these are called Chapter 7 and Chapter 13. If a person qualifies to file for Chapter 7, at the end of the process the person’s eligible debts are wiped away (i.e. discharged) and the person is no longer responsible for any of those obligations.

Conversely, Chapter 13 bankruptcy requires the person to make regular payments on his or her debts normally over a three or five year period. These payments are made pursuant to a Chapter 13 repayment plan which must be approved by the bankruptcy court. However, at the end of the plan period, the person’s remaining debts are likewise wiped away.

Depending on your personal circumstances, a Chapter 13 bankruptcy may be the right solution for your financial problems. The purpose of this survival guide is to offer a number of helpful tips and tricks for getting through the Chapter 13 process.

Tip #1 – Make Sure ALL of Your Paperwork is in Order

Just like with all legal proceedings, the Chapter 13 bankruptcy requires mountains of paperwork (which is one reason why working with an attorney can be very beneficial). A typical Chapter 13 case will require the debtor to complete multiple schedules that provide the court and the bankruptcy trustee with detailed information regarding the debtor’s monthly expenses and bills, assets, any pending judgments against the debtor, the debtor’s previous history of filing for bankruptcy (if any), and several other pieces of information.

If a debtor accidentally leaves out any information, down the road he/she may be required to file more papers with the court, pay extra fees, amend the Chapter 13 payment plan, and complete additional steps in order to finish the process. Importantly, if a debtor forgets to include a creditor in the paperwork, the debt owed to that creditor may not be included in the Chapter 13 discharge – which means the debtor will still be responsible for that debt even after the bankruptcy ends.

Of course, it need hardly be stated that if a debtor fails to include any of the required information on purpose, the court may find that the debtor willfully committed fraud and could subject the debtor to fines and other criminal penalties.

Tip #2 – Make Sure Your Supporting Documentation is in Order

A debtor should have all of his/her financial documents available for the bankruptcy trustee to review. These documents include but are not limited to deeds, tax returns, paystubs, W-2 and 1099 forms, bank statements, retirement account statements, mortgages, and car loan paperwork. Our office recommends creating a separate file for each type of document and organizing the files by date to make sure that you can provide the trustee with a requested document easily and quickly.

It is important to continuously update these files throughout the process as a Chapter 13 case may take months to complete.

Tip #3 – Make Sure Your Chapter 13 Plan is Realistic

It’s no use filing for Chapter 13 if you will not be able to stick to your payment plan. Chapter 13 debtors should create a household budget that allows them to make the required payments and make them on time. An experienced attorney can provide invaluable assistance in creating a realistic budget and Chapter 13 plan by helping a debtor calculate the household’s disposable income.

If you or a loved one are considering filing for Chapter 13 bankruptcy and have further questions about the process, contact our office today to discuss your bankruptcy options. We look forward to working with you!