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The FAQs of Filing for Bankruptcy

Filing Bankruptcy should not be a bewildering, daunting experience, in which you face a gamut of unfamiliar words and phrases.

Many of you have questions about the process, and we’re here to help. From figuring out what “Trustee” means to knowing which of your debts are “dischargeable,” this frequently asked questions section will address many of your concerns and put you in a calmer state of mind for your transition from debt into bankruptcy.

Many of you have questions about the process, and this section is designed to help. From figuring out what “Trustee” means to knowing which of your debts are “dischargeable,” this frequently asked questions section will address many of your concerns.

Who is the “debtor”?
In bankruptcy law, the debtor is the person who files bankruptcy because he or she owes money to a creditor or creditors. If you file for bankruptcy, then you are the debtor.

Who can be a Debtor?
Legal Residents Are Eligible to File for Bankruptcy. There is no requirement that you must be a U.S. citizen to file for bankruptcy. You can file a bankruptcy if you reside, have a domicile, or own a business or other property in the United States. There is no debt limits to file a Chapter 7 Bankruptcy.

As of April 1, 2016, any individual that is either employed or self-employed in business is eligible for chapter 13 bankruptcy relief provided the individual’s unsecured debts are within these limits of $394,725 unsecured / $1,184,200 secured.

Who are “the creditors”?
The creditors are the people to whom you, the debtor, owe money or property.

Your Trustee is an impartial government representative who administers a bankruptcy objectively, and you should make all attempts to ally yourself with them, as their actions help you relieve yourself of debt.

What is a bankruptcy petition?
A bankruptcy petition is an official form that initiates a bankruptcy case in federal court, which includes multiple forms and schedules. The forms and schedules document income about your assets and debts, income and expenses.

Are you required to take a credit Counseling course before you file Bankruptcy Petition?
Credit counseling is required for all individuals filing petitions under chapters 7, 11, 12, and 13. In a joint case, each spouse must take the course. You must complete the counseling session within 180 days before filing your case, and file the certificate proving completion with the court. The credit counseling course focuses on your existing debt.

What are the Forms and Schedules that must be filled out?
A Chapter 7 or a Chapter 13 Bankruptcy petition will include the following:

Voluntary Petition for Individuals Filing for Bankruptcy. On this form, you’ll
disclose personal information such as your name, address, type of bankruptcy you wish to file, and prior bankruptcies. You’ll also attach your credit counseling certificate to the voluntary petition.

Schedule A/B: Property. Here you’ll disclose all of your real property, such as real estate, and your personal property, which is everything else. There is a specific section for most types of assets, including your home, cash, bank accounts, cars, and household goods. If an asset doesn’t fit into a particular category, there is a catch-all section at the end of the form for all other kinds of personal property.

Schedule C: The Property You Claim as Exempt. Schedule C is one of the most important forms of your Chapter 7 paperwork because it’s where you list and claim your bankruptcy exemptions to protect your property from being taken by the bankruptcy trustee. Prior to filing your case, check your state’s exemption laws (or talk to a bankruptcy attorney) to make sure you can exempt all of your assets. If you can’t exempt an asset, then the trustee can sell it to pay your creditors.

Schedule D: Creditors Who Have Claims Secured by Property. If you have a secured debt (such as a mortgage or car loan), you must list it on Schedule D.

Schedule E/F: Creditors Who Have Unsecured Claims. This is where you’ll disclose all of your unsecured debts (in other words, you’ll list all debts that you didn’t already list on Schedule D). You’ll include both priority unsecured debts—such as certain tax obligations and back child support and alimony—and nonpriority unsecured debts—like credit cards, medical bills, and personal loans.

Schedule G: Executory Contracts and Unexpired Leases. If you have any executory contracts (where the parties still have further obligations to perform) or unexpired leases, you’ll list them on
Schedule G.

Schedule H: Your Codebtors. If you have a codebtor on any of your debts (someone who is also responsible for the debt), you must disclose them here.

Schedule I: Your Income. Schedule I is where you’ll disclose your employment information and current income.

Schedule J: Your Expenses. Schedule J is where you’ll disclose all of your current expenses. Because it serves as a budget going forward, you won’t include payments for any debts that will be wiped out by your bankruptcy (such as credit card bills or a car payment if you’re returning it to the creditor).

Declaration About an Individual Debtor’s Schedules. On this form, you’ll declare under penalty of perjury that all of the information you provided on the bankruptcy petition and schedules is true and accurate.

Statement of Financial Affairs for Individuals Filing Under Chapter 7. On this lengthy form, you must disclose information about your prior financial affairs, including how much income you made over the past several years and previous payments to creditors. You’ll also report things such as lawsuits, repossessions, foreclosures, property transfers, storage facility use, and information about your business (if any).

Statement of Intention for Individuals Filing Under Chapter 7. If you have any secured debts—such as a mortgage or car payment—this is where you’ll tell the court whether you intend to keep the asset (the house or car) and continue making payments or surrender it to the creditor. You’ll also disclose whether you plan to keep an unexpired personal property lease (you won’t report real estate property leases).

Statement About Your Social Security Numbers. This is the form where you’ll disclose and verify your social security number.

Chapter 7 Statement of Current Monthly Income (Form 122A-1). This form determines whether you qualify to file for Chapter 7 bankruptcy. When you complete this form, you must disclose your average monthly income for the six-month period preceding your bankruptcy as well as the size of your household. Follow the instructions on the means test to calculate your income and compare it against the median income for a similar household in your state. If your income is below the median, you automatically qualify. If your income is above the median, you’ll complete the second form, Chapter 7 Means Test Calculation (Form 122A-2).

Chapter 13 Statement of Current Monthly Income (Form 122C-1)
When you file for Chapter 13 bankruptcy, you must file Form 122C-1 – Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period. On this form, you provide the court with detailed information about your income from the previous six months and determine how long your Chapter 13 plan must last.

Creditor Mailing List (Creditor Mailing Matrix). As part of your bankruptcy petition, you must prepare a list of all your creditors’ mailing addresses. The court uses the creditor mailing list to send notice of your case to your creditors. Each bankruptcy court has its own rules and required formatting for the creditor mailing list. Contact your local bankruptcy court to learn about the requirements in your district.

Am I required to take a 2nd course after I file for Bankruptcy?
After you file for bankruptcy under Chapter 7 or Chapter 13, you’ll need to complete a financial management course. Once you complete it, your attorney will file it with the court. The debtor education course teaches you hot to budge and responsibility manage your finances for the future.

In Chapter 7, you must complete the course within 60 days after the first date set for your meeting of creditors. In chapter 13 you must complete it before making your last plan payment.

What is the bankruptcy Estate?
A bankruptcy case is commenced by filing the bankruptcy petition paperwork with the Bankruptcy Court. The commencement of a bankruptcy case creates an “estate.” The estate becomes the temporary legal owner of all of the debtor’s assets and property rights, with a few exceptions. Assets that are part of the estate are subject to exclusive control and the protection of the bankruptcy court, unless and until those assets are removed from the estate. In contrast, assets that are not part of the estate are not controlled by the bankruptcy court, but those assets are also not subject to the protections of the the bankruptcy proceeding, such as the automatic stay. As a result, it is important for people who are considering filing for bankruptcy protection to know which assets become part of the bankruptcy estate, and which do not.

Who is the “Bankruptcy Trustee” and what does he/she do?
The Bankruptcy Trustee is a court official appointed on a rotating and random basis to oversee and administer your “bankruptcy estate”. The Chapter 7 bankruptcy trustee has many responsibilities that come with this appointment, including ensuring that your paperwork is accurate and selling property that you’re not entitled to keep for the benefit of your creditors.

When you exempt items, you remove them from the bankruptcy estate. Any exempted item cannot be sold to repay debt. Alternatively, through Chapter 13, you can keep unexempted property and pay the value of the unexempt property over 3-5 years.

A Chapter 13 Trustee will review your entire bankruptcy petition including your repayment plan and your documents. It is one of the trustee’s responsibilities to make sure that your income calculations are accurate and your expenses are reasonable, and that your Chapter 13 repayment plan is fair to your creditors.

After reviewing everything, the trustee will let you know if he or she has any objections to your bankruptcy and request more documentation if needed. Chapter 13 trustees are charged with maximizing the return to your unsecured creditors so most objections are centered around increasing your plan payments and distributions to creditors. If you cannot reach a resolution with the trustee, then a judge will hear both sides and make a determination as to what your plan payments should be.

What is the bankruptcy automatic stay?
Once you file for bankruptcy, an automatic stay kicks in and protects you from your creditors and bill collectors. The automatic stay stops any lawsuit that is filed against you by a creditor, collection agency, government entity or other person seeking money from you. The automatic stay will
· Stopping Your Utilities From Being Disconnected
· Stop Foreclosure Proceedings
· Stop Evictions
· Stop Wage Garnishments
· Stop Bank Levies
· Stop Government Agency from Taking back overpayment of Government Benefits

What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy protection allows debtors to get rid of most of their debts and start over with a clean slate. Chapter 7, also called “liquidation” or “straight bankruptcy,” is the process by which a debtor’s assets that cannot be exempt are sold, creditors receive payment, and you are then free from your debts.

What are Bankruptcy Exemptions?
In Chapter 7 bankruptcy, exemptions determine what property you get to keep, whether it be your home, car, pension, personal belongings, or other property. If property is exempt, you may keep it during and after bankruptcy. If property is nonexempt, the trustee is entitled to sell it to pay your unsecured creditors.

Each state has a set of exemptions that apply in bankruptcy. Most states require you to use those state exemptions. However, seventeen states allow debtors to choose between the state exemption system and another set of exemptions created by Congress, called the federal bankruptcy exemptions.

What States Allow the Federal Bankruptcy Exemptions?

The states that allow use of the federal bankruptcy exemptions are:

Alaska New Jersey
Arkansas New Mexico
Connecticut New York
District of Columbia Oregon
Hawaii Pennsylvania
Kentucky Rhode Island
Massachusetts Texas
Michigan Vermont
Minnesota Washington
New Hampshire Wisconsin

If you live in one of the above states, you may choose between using the federal bankruptcy exemptions or the exemption system created by your state. You cannot mix and match from the two different systems.

What are the Current Amounts for Federal Bankruptcy Exemptions?
The amounts allowed under the federal bankruptcy exemptions are adjusted every three years ending on April 1 to reflect changes in the Consumer Price Index. The federal bankruptcy exemptions were last adjusted in 2016.

If you are married and filing jointly, you may double all of the federal bankruptcy exemptions. For example, you may claim a homestead exemption of $47,350 (which is double the listed homestead exemption amount of $23,675).

If a dollar amount does not accompany a listed piece of property, the entire value of the property is exempt.

All code references are to 11 U.S.C. (Title 11 of the United States Code).

522(d)(1), (5) – Real property, including mobile homes and co-ops, or burial plots up to $23,675. Unused portion of homestead, up to $11,850 may be used for other property.

Personal Property
522(d)(2) – Motor vehicle up to $3,775.
522(d)(3) – Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $600 per item, and up to $12,625 total.
522(d)(4) – Jewelry up to $1,600.
522(d)(9) – Health aids.
522(d)(11)(B) – Wrongful death recovery for person you depended upon.
522(d)(11)(D) – Personal injury recovery up to $23,675 except for pain and suffering or for pecuniary loss.
522(d)(11)(E) – Lost earnings payments.

522(b)(3)(C) – Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
522(b)(3)(C)(n) – IRAS and Roth IRAs to $1,283,025.

Public Benefits
522(d)(10)(A) – Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.
522(d)(11)(A) – Crime victim’s compensation

Tools of Trade
522(d)(6) – Implements, books and tools of trade, up to $2,375.

Alimony and Child Support
522(d)(10)(D) – Alimony and child support needed for support.

522(d)(7) – Unmatured life insurance policy except credit insurance.
522(d)(8) – Life insurance policy with loan value up to $12,625.
522(d)(10)( C ) – Disability, unemployment or illness benefits.
522(d)(11)( C ) – Life insurance payments for a person you depended on, which you need for support.

522(d)(5) – $1,250 of any property, and unused portion of homestead up to $11,85

Exemptions can be somewhat complicated. For this reason, we strongly recommend that you hire a bankruptcy attorney to ensure you are correctly following the appropriate exemption rules

The complexity of the exemptions process only highlights the necessity of hiring an experienced attorney who is familiar with the specific exemption laws to ensure you are correctly following the appropriate exemption rules to keep your property.

How do Exemptions work in a Chapter 7 Bankruptcy?
Any property that you can fully exempt in Chapter 7 bankruptcy you get to keep and cannot be liquidated to repay your debt. Nonexempt property, on the other hand, will be sold by your case trustee to pay off your debts. I have filed thousands of cases and have successfully used the bankruptcy exemptions I have been able to protect all of my clients property.

What can I do if I don’t want an asset that I cannot fully exempt liquidated?
If you have property that you cannot fully exempt in a Chapter 7, then you can file a Chapter 13 Bankruptcy instead. There’s a number of requirements for chapter 13 plans; if the requirements are not met, the plan cannot be confirmed. A plan must be confirmed to successfully use chapter 13 to reorganize or repay debts

One such requirement is the “liquidation test” or best interests of creditors test of section. This test requires that the chapter 13plan pays unsecured creditors (e.g. charge card accounts, medical bills, and personal loans) at least as much as they would have been paid in chapter 7 liquidation. Although nonexempt assets won’t be handed over to your trustee for sale to pay off your debts, their value must be paid toward your “nonpriority unsecured debts” (e.g., credit cards, medical bills). In other words, you can keep your assets.

Who can file for Chapter 7 Bankruptcy?
In order to be eligible for Chapter 7 bankruptcy, you must meet several criteria. You must pass the Means Test. The Means Test is a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. If you fail the means test, you make to much money, then you will be required to file a Chapter 13 Bankruptcy and may be required to pay a portion or all of your debt. How much you need to pay shall be determined by your individual circumstances.

You cannot get another Chapter 7 bankruptcy discharge if you obtained a discharge of your debts in a Chapter 7 bankruptcy case within the last eight years, or a Chapter 13 case within the last six years. You cannot file for Chapter 7 bankruptcy if a previous Chapter 7 or Chapter 13 case was dismissed within the past 180 days because: you violated a court order, the court ruled that your filing was fraudulent or constituted an abuse of the bankruptcy system, or you requested the dismissal after a creditor asked for relief from the automatic stay.

What are the steps to file a Chapter 7 Bankruptcy?
1. Pre-bankruptcy credit counseling. Chapter 7 bankruptcy filers must get credit counseling from an approved agency within the six months prior to the bankruptcy filing.
2. Bankruptcy petition. You must file a packet of forms consisting of the bankruptcy petition, schedules (which contain detailed information about your finances), other forms (which calculate your income and expenses, let the court know which property you claim as exempt, and inform the court of various other information).
3. Automatic stay. Once you file your bankruptcy petition, the automatic stay goes into effect. The automatic stay prohibits almost all of your creditors from continuing collection actions against you.
4. The bankruptcy trustee. The court assigns a bankruptcy trustee to administer your case. The trustee will try to maximize assets in the bankruptcy estate to distribute to your unsecured creditors, look for inaccuracies in your paperwork, and check for any possible fraud
5. The Chapter 7 meeting of creditors. You must attend the meeting of creditors (341 hearing). This is not a court hearing, but a meeting run by your bankruptcy trustee. The trustee will ask you questions about your petition and finances. Creditors may, but often don’t, appear and ask questions.
6. Your property. If your property is exempt, you keep it. If you have some nonexempt property, the trustee must decide what to do: seize and sell it to repay your creditors or abandon it. Even if your property is not exempt, all is not lost.
7. Secured debts. You must decide what to do about your secured debts – those debts for which you pledged property as collateral, like a mortgage or car loan. Typically you can surrender (give back) the property, redeem (pay for) the property, reaffirm the loan, or do nothing and keep paying the debt.
8. Financial management course. Before you get your discharge, you must take a debtor’s education course. This is in addition to credit counseling you received before you filed for bankruptcy (see Step 1).
10. Your discharge. Somewhere between three and six months after you file for bankruptcy, the court will grant your bankruptcy discharge. When this happens, the automatic stay ends.
11. Case closed. After the court grants your discharged, it will close your case – usually a few days or weeks later.


A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

Who can file a Chapter 13 Bankruptcy?
A debtor must meet the following requirements to file a Chapter 13 bankruptcy:
· You cannot be a business entity (only individuals can file a Chapter 13)
· You have not filed a prior Chapter 7 within the past six years
· You have not had a prior case dismissed within the past 180 days and you willfully violated a court order or failed to appear before the court, or you
requested that the court dismiss the case after a creditor asked the court to lift an automatic stay.
· Your debts to do no exceed the debt limits: $394,725 in unsecured debt and $1,184,200 secured.

Your Proposed Plan Repays All Required Debts

Under Chapter 13, bankruptcy law requires the repayment of some debts in full. Debts in this category include:
· Priority debts: Unsecured debts, such as child support, alimony or support payments, and nondischargeable taxes.
· Secured debts that survive the repayment plan: Secured debts, such as a mortgage or a vehicle loan, must remain current during the repayment plan.
· Other secured debts: Secured debts, like judicial and tax liens, must be paid in full during the repayment time.

· Liquidation Test: Your Chapter 13 plan pays unsecured creditors (e.g. charge card accounts, medical bills, and personal loans) at least as much as they would have been paid in chapter 7 liquidation.
· You Have Sufficient Income to Pay Debt: A debtor must have enough income, after deducting allowable expenses, for all debt obligations that are required to be paid

Why are some common reasons that people file for
Chapter 13 Bankruptcy?

· Make to much money
· To prevent a trustee from selling assets that are not fully exempt
· To save their home
· To save their car
· To Stop Levies, Garnishments
· To repay non- dischargeable tax debt

What are the steps to file a Chapter 13 Bankruptcy?
1. Pre-bankruptcy credit counseling. Chapter 7 bankruptcy filers must get credit counseling from an approved agency within the six months prior to the bankruptcy filing.
2. Bankruptcy petition. You must file a packet of forms consisting of the bankruptcy petition, schedules (which contain detailed information about your finances), other forms (which calculate your income and expenses, let the court know which property you claim as exempt, and inform the court of various other information).
3. Automatic stay. Once you file your bankruptcy petition, the automatic stay goes into effect. The automatic stay prohibits almost all of your creditors from continuing collection actions against you.
4. Chapter 13 Plan. The Chapter 13 plan must be submitted with your bankruptcy petition. The Chapter 13 repayment plan establishes a very specific, regular way in which a debtor goes about paying off his or her debts. This involves making monthly payments to the trustee, who then distributes the funds to your creditors. The repayment plan lasts three to five years and must be approved by the bankruptcy court. During this time, you repay all or a portion of your debt. The trustee then distributes specifically outlined payments to all creditors according to the Chapter 13 plan.
5. The bankruptcy trustee. In a Chapter 13 bankruptcy, the trustee’s role is to: examine your proposed Chapter 13 repayment plan and make sure it complies with all legal requirements. receive the payments you make under the plan and distribute them to your creditors in the manner required by law.
6. The Chapter 13 meeting of creditors. At the Chapter 13 Meeting of creditors the trustee or staff attorneys will verify the information in your bankruptcy papers and ask you questions about your financial affairs. The Chapter 13 trustee also uses this time to determine whether your case is ready to be approved by the court. If the trustee believes that you should be paying more to your unsecured creditors, he or she can object to the confirmation of your Chapter 13 repayment plan
7. Your property. In Chapter 13 bankruptcy, exemptions determine, in part, how much you will have to pay to your nonpriority, unsecured creditors through your Chapter 13 repayment plan. If all or party of your property is not fully exempt then you will have to pay the unexmpt portion to your creditors over a three to five year period.
8. Financial management course. Before you get your discharge, you must take a debtor’s education course. This is in addition to credit counseling you received before you filed for bankruptcy (see Step 1).
9. Your discharge. Upon completion of all payments under the Chapter 13 plan so long as the debtor: certifies (if applicable) that all domestic support obligations that came due prior to making such certification have been paid; has not received a discharge in a prior case filed within a certain time frame (two years for prior Chapter 13 cases and four years for prior Chapter 7, 11 and 12 cases); and has completed an approved course in financial management. When this happens, the automatic stay ends.
10. Case closed. After the court grants your discharged, it will close your case – usually afew days or weeks later.

What is a Discharge and How Does it Work?
A discharge in a Chapter 7 or a Chapter 13 releases individual debtors from personal liability for the debt and prevents the creditor owed that debt from taking any collection actions against the debtor. In other words, the debtor is no longer legally required to pay any debts that are discharged.

Although a debtor is not personally liable for discharged debts, a valid lien that has not been avoided (made unenforceable) in the bankruptcy case will remain. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

Which debts are dischargeable?
Although not all debts are dischargeable, the majority of your debts will be discharged Among your dischargeable debt, only your debts that arose before the date of filing for Chapter 7 will be discharged. You will still be responsible for any debt you incur after filing your petition but before receiving a discharge.

These debts are discharged in bankruptcy, whether you file under Chapter 7 or Chapter 13:
· credit card charges (including overdue and late fees)
· collection agency accounts
· utility bills (past due amounts only)
· dishonored checks (unless based on fraud)
· repossession deficiency balances
· auto accident claims (except those involving drunk driving)
· business debt
· medical bills
· money owed under lease agreements (includes past due rent)
· civil court judgments (unless based on fraud)
· most debts arising from car accidents
· obligations under leases and contracts
· personal loans from friends, family, and employers
· promissory notes, and
· tax penalties and unpaid taxes past a certain number of years
· attorney fees (except child support and alimony awards)
· social security overpayments, and
· veterans assistance loans and overpayments
· any other debt that doesn’t fit into one of the nondischargeable categories, explained below.

What Debts are not Dischargeable?
There are three categories of debts that won’t be discharged in your bankruptcy case. Some debts are never discharged; some are not discharged unless you can successfully argue that they should be; and some are not discharged only if a creditor successfully argues that they should not be.

1) Debts That Are Never Discharged
You will continue to owe these debts after your bankruptcy case is over:
· child support and alimony
· fines, penalties, and restitution you owe for breaking the law
· certain tax debts, and
· debts arising out of someone’s death or injury as a result of your intoxicated driving.

2) Debts That Are Not Discharged Unless You Prove an Exception Applies

Certain debts will be discharged only if you ask the court to rule that it should
be. In other words, the default is that these debts are not discharged, unless you convince the court otherwise:
· student loans, and
· regular income tax debts

3) Debts That Are Discharged Unless A Creditor Successfully Objects
Some debts are discharged unless a creditor comes forward and convinces the court that they should not be. These debts include:
· debts arising from your fraud, including recent debts for luxuries of more than $675 (as of April 2016) or cash advances of more than $950 (as of
April 2016) within a certain period of time before you file
· debts arising from your willful and malicious acts
· debts arising from your embezzlement, larceny, or breach of fiduciary
duty, and
· debts or creditors you don’t list on your bankruptcy papers.

What is the Goal of a Chapter 7 Bankruptcy?
The main goal of filing for Chapter 7 bankruptcy is to discharge (wipe out) their debts. Although some debts are “nondischargeable,” most people filing for Chapter 7 will be able to discharge most or all of their debts.

When will my Chapter 7 discharge be issued?
The Bankruptcy Court issues discharges generally 75 days (3-4 months) following the date of the debtors’ meeting and examination with creditors unless the Trustee has filed an adversary proceeding against you requesting a denial of discharge or the creditor objects to the discharge of a debt, in which case a discharge will not be issued and you will be asked to abandon or convert your case.

What are the grounds for the Bankruptcy Court to deny me a discharge in my Chapter 7 case?
According to 11 USC §727, the grounds for denying a discharge include, but are not limited to:
1) the debtor (you) lying in Chapter 7 Bankruptcy Petition, schedules, or other pleadings; or
2) the debtor lying in the 341(a) meeting, where he or she is examined under oath by his or her Trustees and creditors; or

3) the debtor fraudulently transferred property within the past four years before filing bankruptcy; or
4) the debtor fails to supply required information for the Trustee or fails to turn over property the Trustee wishes to sell; or
5) the debtor has already received a Chapter 7 discharge in the past eight (8) years (Section 727 of the Bankruptcy Code); or
6) the debtor is a corporation or partnership and is therefore ineligible to receive any discharge through Chapter 7 and should instead seek Chapter 11 or 13.

What is the Goal of a Chapter 13 Bankruptcy?

The main goal of filing for Chapter 13 Bankruptcy is to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years

You may want to file a Chapter 13 Bankruptcy if …
· You are facing a repossession or foreclosure and need time to catch up on your past due payments.
· To use a “cram down” procedure to lower the amount or interest rate that must be paid to satisfy some debts, which are secured by assets such as a car or furniture. If you are upside down on your home and have a second mortgage/equity line/HELOC you may use a “cram down” to eliminate the mortgage. Cram down is used to modify obligations to reflect the value of the assets.
· You have taken the Chapter 7 means test and do not quality for a chapter 7 discharge because your income is to high.
· If you previously filed a Chapter 7 and are not yet eligible to file another chapter 7.
· Chapter 13 allows an individual to keep non-exempt property, which would otherwise be sold or liquidated in a Chapter 7 and instead, allows the individual to pay his or her creditors the value of the property through the Chapter 13 trustee, over a three- to five-year time period.
· To avoid judicial liens that impair exemptions can be stripped off of real estate or personal property and the property or real estate may be retained free of liens.
· To obtain a discharge of most kinds of unsecured debt while repaying amounts that cannot be discharged, such as most taxes or domestic support obligations
· The Co-debtor stay. In a Chapter 13 bankruptcy, you may be able to stop your creditors from trying to collect from your children, parents, spouse or other loved

ones who co-signed a debt for you, while you restructure your obligations and get back on your feet.
· You would like to pay back your debt because you believe it is the right thing to do and want to utilize the process to consolidate your debt and repay all of part of the principal balance.

If I am bankrupt, how can I afford to pay an Attorney?
When you consult with an attorney and decide to file, your attorney will advise you to stop paying on most, if not all, of your unsecured debts. Those funds that you would have paid out for those minimum payments that go all to interest, and barely anything to principal, will now be paid to your attorney, instead.
If you haven’t been paying your debt, then with some minor changes to your monthly budget, you can free up money to pay the attorney. In a Chapter 13, the bulk of the legal fees are paid through the repayment plan.

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