WHAT IS CHAPTER 13?
Chapter 13 or "wage earner plan" is the long term (three to
five years) repayment of debt. While a trustee is appointed, a debtor usually
retains possession and control of their property. Even though debts may be paid
by voluntarily liquidating assets, they usually are paid out of the disposable
portion of future earnings. Debts are paid following a plan submitted by the
debtor, which must be approved by the bankruptcy court. Once the debtor has paid
their debts under the plan, the court grants a discharge.
To be eligible to file a Chapter 13 petition, an INDIVIDUAL
must meet the following criteria:
- They must have regular income
- Their total unsecured debt must be less than $100,000
- Their total secured debt must be less than $350,000
To be eligible to file a joint Chapter 13 petition, an
individual and spouse must meet the following criteria:
- One of them must have regular income
- Their total unsecured debt must be less than $100,000
- Their total secured debt must be less than $350,000
DEBTOR'S DUTIES IN A CHAPTER 13 CASE
Individuals who file Chapter 13 bankruptcy are given the
following responsibilities:
- To file a list of creditors, and unless the court orders
otherwise, a schedule of assets and liabilities, a schedule of current
income and expenditures, a statement of the debtor's financial affairs, and
a chapter 13 repayment plan
- Cooperate with the trustee in all matters
- Appear at meetings and hearings as directed by the court
THE ATTORNEY'S DUTIES IN A CHAPTER 13
CASE
A Chapter 13 bankruptcy can be very complicated and usually
requires an attorney whose role is as follows:
- Evaluate the debtor's obligations and decide the best
course of action for them
- Help the debtor prepare a workable budget
- Inspect lien and security agreements to determine their
validity as a secured debt and to what extent, if any, they may be avoided
by the debtor, claim them as an unsecured creditor
- Set up a "game plan" for dealing with secured creditors,
surrender property, pay debt (inside or outside the plan), and negotiate the
debt down.
- Help the debtor design a realistic and workable repayment
plan
- Prepare the necessary pleadings, documents, forms, and
schedules, and file them with the court
- Attend the meeting of creditors, the confirmation hearing
and other hearings as required by the court
- Help the debtor get their plan approved as necessary
- Review claims filed against the debtor, file objections
to improper claims, and represent the debtor at hearings on the claims
- Represent the client in adversarial matters including
hearings on such matters
- Help the debtor conquer legal obstacles appearing during
the case and assist as necessary to gain a discharge for their client
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