What Do I Need to Provide to File Chapter 13?
In order to complete and file a wager earner’s plan, you must provide the following information:
- A list and some background details on all creditors (amount owed, date incurred)
- A detailed list of your monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
- Information and details regarding the filing, pay-stubs, and your income
- A list of all of your property
- Driver’s license
- Social Security card
- A copy of your taxes from the year prior to filing
- A valid certificate of credit counseling
- A copy of any debt repayment plan prepared through a credit counseling agency
What Kinds of Debt Are Dischargeable in a Chapter 13 Bankruptcy?
In both Chapter 13 and Chapter 7 bankruptcies, most unsecured debts like credit cards, medical bills and unsecured loans are dischargeable. In Chapter 13, frequently taxes are not dischargeable, but can be paid through a Chapter 13 plan. The payments that go to the trustee can then be used to pay the taxes. For the most part, the debts that are dischargeable in Chapter 7 are also dischargeable in Chapter 13.
For the most part, unsecured debt is dischargeable in both Chapter 7 and Chapter 13, and backed-up secured debt, like back mortgage payments, can be “caught up” in Chapter 13, which is common practice.
Benefits of Chapter 13
This filing gives you the opportunity to save your home from foreclosure by creating a repayment plan for mortgage lenders. By filing under Chapter 13, individuals can stop foreclosure proceedings, and have the opportunity to cure delinquent mortgage payments over the course of the time established for completing the plan. Nevertheless, debtors must still make all mortgage payments in full that come due during the Chapter 13 plan period, on time as they come due.
Another advantage is that it allows individuals to re-amortize secured debts (other than a mortgage for their primary residence) and pay them over the life of the plan. Taking this action may lower the payments and make them more affordable.
Chapter 13 law also has a special rule that protects third parties who are liable with the debtor (co-debtors) on “consumer debts.” This co-debtor “stay provision” protects co-signers during the plan.
Finally, Chapter 13 acts like a consolidation loan under which the debtor makes the plan payments to a trustee who then disburses payments to creditors evenly.