St. Louis Chapter 13 Bankruptcy Law Firm

Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as the “wage earner plan,” enables debtors to keep assets and establish a schedule to pay back creditors within an agreed upon time period. Filing Chapter 13 bankruptcy has several important benefits. Here is an explanation of how the process works.

After a client meets with our bankruptcy attorneys, and speaks with a credit counselor, their petition is filed with the Court. This petition will include a household budget showing how much disposable income the debtor can use to pay back creditors. It will also contain a plan for repaying each type of creditor owed (taxes, secured debts, unsecured debts, child support, etc.).

The Court will assign a Trustee to the case, and send a notice out to each creditor that the debtor has filed bankruptcy and is under the protection of the Court. Along with this notice, creditors will receive a Proof of Claim form to fill out and return to the Court so that they can be paid back through the bankruptcy. The notice will list the date, time and place of the Meeting of Creditors, which usually takes place about a month after the bankruptcy petition is filed.

The debtor(s) must go to the Meeting of Creditors, at which the Trustee will review their petition and ask any questions necessary to be sure he or she understands the debtor’s financial situation clearly. A lawyer from TBC also attends this Meeting to assist the debtor as needed. Creditors may also go to this meeting to ask questions of the debtor, but very few of them generally attend.

If the debtor is employed, a wage order is issued by the Court, telling the employer to withhold the amount of the plan payment from the debtor’s wages each month, and send the payment to the Trustee. The Trustee will then send the money from this payment out to the creditors, as outlined in the Chapter 13 plan. Sometimes this plan needs to be modified, if the debtor’s financial situation changes or if claims made by creditors amount to more than was anticipated. This plan must be approved by the Trustee and the Court.

The debtor must complete a brief Financial Management course. After the last plan payment has been made to the Trustee, the Court will issue an order discharging all remaining unsecured debts included in the bankruptcy.

Don't wait until till it may be too late to seek protection under the bankruptcy law. Schedule a FREE Consultation with one of our bankruptcy attorneys and learn how the bankruptcy law applies to your specific situation. Call TBC today at 314-961-9822


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