Legally reviewed by Allen A. Kolber, Esq. - The Law Offices of Allen A. Kolber, Esq., P.C.
Key Takeaways
- Chapter 13 uses two separate debt ceilings, not one combined figure, and both are measured on your filing date.
- A petition dismissed in the last 180 days can bar you from filing again.
- Your repayment plan is due within 14 days of the petition, and payments start within 30 days.
- Plan length is set by your income against the state median, not by preference.
You may know for certain that you have racked up enough consumer debt that constitutes a consumer bankruptcy filing. But your uncertainty may lie with which type to pursue. Namely, Chapter 7 or Chapter 13 bankruptcy. With this, it is not so much deciphering which to choose but rather understanding which you are eligible for. With that being said, please continue reading to learn the requirements for filing for Chapter 13 bankruptcy and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you fulfill every last one.
Do I Qualify for Chapter 13 Bankruptcy in the First Place?
As the debtor of a Chapter 13 consumer bankruptcy case, you may be expected to pay off your outstanding creditors in a court-ordered, three- to five-year repayment plan. You may be drawn toward this bankruptcy type, as you may believe it is more honorable to pay off your debts rather than having them discharged from your immediate responsibility. But again, it is not necessarily in your authority to select the Chapter 13 bankruptcy option.
In reality, you must prove to the federal bankruptcy court handling your case that you receive a regular, substantial income, whether from wages, self-employment, pension, Social Security benefits, or otherwise. This is to confirm that you have the financial capability to keep up with a repayment plan.
Additionally, Chapter 13 applies two separate debt ceilings, rather than one combined figure. On the date you file, the noncontingent, liquidated unsecured debts must be less than $526,700 and your secured debts to less than $1,580,125. These figures are adjusted for inflation every three years, so confirm the amounts in force on your filing date. Lastly, you must demonstrate that you have filed all required New York State and federal income tax returns for the four years prior to your bankruptcy petition.
A Recent Dismissal Can Bar You for 180 Days
Meeting the income and debt tests is not the whole picture. If a past bankruptcy petition was dismissed in the prior 180 days because you willfully failed to appear or comply with a court order, or because you dismissed it voluntarily after the creditor moved for relief from the stay, you will be unable to file again until the window closes. This often impacts those who filed without counsel, let the case lapse, and assume they can simply start over.
What Are the Requirements for Filing for Chapter 13 Bankruptcy?
Once you confirm that you meet all the eligibility criteria for Chapter 13 bankruptcy, you may proceed forward with filing the petition. With this, you may be expected to meet certain requirements and overall follow the steps below:
- Attend and complete a Department of Justice-approved credit counseling course.
- Gather relevant financial documents that take inventory of your assets and debts.
- Consider your income and create a repayment plan proposal for the court to approve.
- Submit your bankruptcy petition, financial documents, and repayment plan proposal to the court.
- Attend a 341 meeting of creditors and answer questions posed by your bankruptcy trustee and creditors.
- Attend a confirmation hearing to learn the court’s approved three- to five-year repayment plan.
- Make monthly repayment plan payments to your trustee, who will then distribute them to your creditors.
- Attend and complete a debtor education course so you may not have to file for bankruptcy again.
- Patiently await the court to discharge your eligible debts and close your bankruptcy case for good.
What Deadlines Apply Once I File?
The steps above happen on the clock, and the early steps will arrive faster than most filers expect.
Your Plan Is Due Within 14 Days
Unless the court grants an extension, your repayment plan must be filed with the petition or within 14 days after filing the petition. This is why the plan is drafted prior to filing, rather than after.
Payments Begin Within 30 Days
Even if the court has not yet confirmed your plan, you must begin making plan payments to your trustee within 30 days of filing. As such, if a car or mortgage payment is due before your plan is officially confirmed, the money will go directly to the lender and is deducted from the funds received by the trustee.
Confirmation Follows the Creditors’ Meeting
Your 341 meeting is held between 21 and 50 days from filing, and the judge is required to hold the confirmation hearing no later than 45 days following the meeting. Whether your plan runs three years or five is not a preference. It turns on whether your current monthly income falls below or above the New York median for a household your size, and a plan may run shorter than that period only if unsecured claims are paid in full.
Contact an Experienced New York Bankruptcy Attorney
There is a lot to consider before pursuing a Chapter 13 bankruptcy filing. To help you make the right considerations, please consult with a skilled Rockland County bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq., P.C. will guide you toward the best decision. Contact us today to learn how we can represent you during these difficult times.
