Filing bankruptcy can be daunting especially for those struggling with debt but have valuable property they don’t want to give up. A Chapter 13 bankruptcy may give you the fresh start you’re looking for while protecting your valuable assets. It’s a consumer bankruptcy that will reorganize your debts in a repayment plan spanning three to five years. This guide takes you through the steps to prepare for a bankruptcy filing, go through the proceeding, and receive your bankruptcy discharge.

Prepare your bankruptcy petition

1. Make sure you qualify to file for bankruptcy Chapter 13.

Gathering the necessary documents will take some time, so it’s important to make sure that you are eligible for a Chapter 13 bankruptcy before doing so. As long as a debtor doesn’t exceed the limits for various types of debt, they are eligible to declare bankruptcy for Chapter 13. If you’re unsure whether Chapter 13 is for you, talk to a bankruptcy lawyer about debt-settlement and other types of bankruptcy you can consider. 

2. Evaluate your disposable income and personal property.

Petitioners should have a list of the property owned to know how much you’ll be able to keep after bankruptcy, and whether you need to repay lenders for a nonexempt property you wish to keep. Since bankruptcy laws require some debts to be paid in full, it’s important to analyze your living expenses and monthly income to gauge whether debt-repayment is feasible for you.

3. Fill-out your bankruptcy forms.

bankruptcy chapter 13The official court forms require debtors to provide bankruptcy information about your case. This includes a list of all secured debts and unsecured debts of the petitioner, the amount owed to claimholders, the property you claim to have bankruptcy protection, bank statements, and other documents that paint a picture of your financial situation. Since this process is extensive, consult with a bankruptcy attorney or hire a bankruptcy petition preparer to ensure your paperwork is complete.

4. Take a credit counseling course.

Taking a pre-filing course is mandatory in filing Chapter 13 bankruptcy. Upon completion, you’ll be given a certificate which you will have to submit along with your petition in bankruptcy.

Start your bankruptcy proceedings

5. File your petition for bankruptcy.

Once bankruptcy petitions are filed to the bankruptcy court and filing fees have been paid, the bankruptcy process has started. A temporary debt relief called automatic stay takes effect once the bankruptcy was filed. This can stop foreclosure proceedings and stops debt collectors and collection agencies from pursuing you while the case is ongoing.

6. Send the requested paperwork to your case trustee.

After filing bankruptcy, a trustee is assigned to a bankruptcy case to verify the information you provided in the petition. Trustees may request you for supporting documentation, so make sure to submit these to avoid delays in the bankruptcy procedure.

7. Attend your bankruptcy hearing.

There are two court hearings in a Chapter 13 bankruptcy: the meeting of creditors and the confirmation hearing. In the meeting with creditors, the trustee in bankruptcy reviews your paperwork and payment plan and allows your creditors to ask questions. Afterward, a bankruptcy judge decides whether or to confirm the plan, taking into account the arguments presented and the objections filed beforehand.

Complete your repayment plan

8. Start making payments.

Once your repayment plan is confirmed, you should start to pay off your debts based on the terms of your plan. If this is not done within 30 days or you have missed payments, then your case may be dismissed in court.

9. Complete the debtor education course.

Before completing your debt repayment plan, you should take a post-filing course. Debtor education courses are mandatory because you will need the certificate for the next step.

10. Get your bankruptcy discharge.

Once you have paid in full according to your repayment plan, your debts will be discharged. The discharge removes your liabilities for qualifying debts, but not for unsecured debts that are exempt, such as alimony, child support, tax debts, and student loans.

Are you considering bankruptcy in Arizona to deal with overwhelming debt? Call Phoenix Fresh Start Bankruptcy Attorneys, PLLC today to discuss your debt relief options and get the legal assistance you need to get back on the road to financial success.