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Understand the process of filing for Chapter 13

| Aug 11, 2020 | Chapter 13 |

Even after people decide to file for Chapter 13 bankruptcy, they may still have many questions about the process.

There are a few things people have to do to begin the bankruptcy process. According to Nerd Wallet, people have to attend credit counseling. During these sessions, people learn about Chapter 13 and whether it is the best option for their situation. Additionally, counselors discuss other financial solutions that people may not have considered. Even if people know that filing for bankruptcy is their only option, they still need to attend this counseling. They typically cannot file for bankruptcy unless they have a certificate that says they completed credit counseling.

Collect paperwork

People need to provide detailed information about their finances before they file for bankruptcy. According to the United States Courts, a Chapter 13 petition needs to include a complete list of creditors, as well as how much people owe to each one. Additionally, people need to compile a list of their expenses. The petition also needs information about people’s income and their property. People may also need to include their tax returns.

Put together a plan

People usually only have two weeks to file their repayment plan with the court once they file for bankruptcy. This means that they already need to have a plan in mind as they start the petition. This plan has to specify how much people will pay toward their debts and how often they will make these payments. The court has to approve this plan before the bankruptcy is legally valid. If a court does not approve the first plan, people need to make modifications and resubmit the plan.