You've heard all about bankruptcy and you think that Chapter 13 may be what you need to do. While it is great that you have done some initial research, you need to talk to an experienced bankruptcy attorney before filing a Chapter 13 bankruptcy. If you're thinking about filing for Chapter 13 bankruptcy in Virginia, here are the basics of what you can expect to happen.
Once you've met with a Chapter 13 bankruptcy lawyer, you will need to have a petition prepared to be filed with the bankruptcy court in your area. To prepare the petition, you will need to provide information about your:
- Assets (possessions)
- Liabilities (debts)
- Income (from all sources)
- Expenses (for the household)
- Other financial information
You must pay filing fees when the petition is filed. Normally, your attorney will collect those fees from you and pay the court for you. The filing of the petition will stop most collection actions against you, although there are exceptions. Any foreclosure proceedings or repossessions will also be stopped.
One of the documents that is filed with the Court is a Chapter 13 Plan. This Plan will tell the Court and your creditors how you plan to handle your debts. The plan can provide for payment of mortgage arrears and for car loans. If you owe taxes, the plan will normally need to provide for the payment of most of those taxes.
After the petition is filed, a trustee will be appointed to administer the case; the trustee will hold a hearing which is called the meeting of creditors. However, normally no creditors attend the hearing. After the meeting, there will be period of time for the trustee and creditors to review your plan and determine if they have a valid objection to the proposed plan. If there are no objections to the plan, the Court will enter a Order Confirming the Plan which will be binding on all creditors listed and on you.
Your first payment to your trustee must be received within 30 days of the date that your case is filed. This may be before your meeting of creditors. Once the plan is confirmed, the trustee will disburse payments made by you to the creditors according to the plan. You will not need to be in touch with your creditors at any time because your trustee will act as the middleman. Creditors may not get full payments on their claims, depending on what type of claims are involved.
Once you have made all of your payments under the Chapter 13 plan—a process that will take from three to five years—you are entitled to a discharge. The discharge will release you from most debts provided for in the plan. Some debts will not be discharged in a Chapter 13, such as debts for alimony or child support, some taxes, debts related to a criminal conviction and most student loans. In addition a creditor may object to be included in the discharge if the debt was from injuries because of a debtor's drunk driving or debts that are deemed to be obtained through fraud.
If you think you need to file for Chapter 13 in the Virginia Beach area, contact Hampton Roads Legal Services or call us today at 757-320-2010. We will set up a time for you to meet with an attorney to discuss your situation.