Proceedings commenced under Chapter 13 are commonly referred to as “wage earner’s” or “individual debt-adjustment” proceedings.
Pre-filing financial briefing and filing
Within 180 days prior to filing, you (the debtor) must obtain a pre-filing financial briefing. A Certificate of Completion is attached to Exhibit D and filed with the petition and schedules. If you cannot obtain a certificate before filing the petition, you may file a statement to that effect, but the certificate must be filed within 14 days after filing the petition. If a matrix is filed with the petition, you have 14 days in which to file the Schedules and other documents, including the Chapter 13 plan.
After a petition is filed, the clerk will mail an order for relief to all interested parties.
The automatic stay will go into effect upon filing. However, if you (the debtor) had a pending case dismissed within one year of the current filing, the automatic stay will terminate in 30 days unless the court finds that you are refilling in good faith. The case will be deemed to be filed in bad faith if you had more than one case under Chapters 7, 11, or 13 dismissed within the previous year for failure to provide the court with essential documentation and there has been no change in your financial condition. If you filed two or more cases in the previous 1-year period, the stay will not go into effect.
Meeting of creditors
As the debtor, you are required to attend a Section 341 meeting of creditors that will be held no fewer than 21 days and within 50 days of filing. However, the U.S. Trustee may set a later date for the meeting.
At least 7 days before the meeting of creditors, you (the debtor) must file your tax returns for the preceding year. If requested by the trustee, creditor, or any party in interest, you must file additional tax returns going back an additional three years. The trustee may extend the meeting of creditors for up to 120 days to give you time to obtain the tax returns. If a creditor requests a copy of your tax return, you must provide it. If you fail to file the tax returns, the case may be dismissed. In addition, you must authorize release of tax transcripts for the future four years to the trustee.
At the meeting of creditors, you (the debtor) are required to provide the trustee with the following documents:
- Picture identification.
- Social security card or proof of social security number.
- Pay stubs for the 60-day period preceding the filing date.
- Bank statements for all financial accounts, including investment accounts.
- Statement disclosing any changes in income or expenses expected to occur in the 12-month period following filing the petition.
Chapter 13 repayment plan
The debtor’s repayment plan may be filed with the petition or within 14 days after filing the petition. The time for filing the plan may not be extended with good cause shown. Your bankruptcy attorney may be required to furnish the clerk with enough copies of the plan to provide one to each creditor.
If the debtor’s income as shown on the Statement of Monthly Income and Means Test Calculation is under the state’s median income, the plan will be for a three-year duration. If the debtor’s income is above the state median, the plan will have a five-year duration.
After the §341(a) meeting of creditors, the court will schedule a confirmation hearing to confirm the plan. The confirmation hearing will be held between 20 and 45 days of the meeting of creditors, unless the court orders otherwise.
Some trustees require the debtor to start making payments under the plan 30 days after the petition is filed, even though the plan has not been confirmed. Other trustees require the debtor to bring the initial plan payment to the meeting of creditors.
If you (the debtor) are engaged in business, you may continue the business but must keep an accurate record of payments and receipts. The debtor has the responsibility of filing monthly operating reports and summaries of the business activities with the court, the trustee and taxing authorities. The report should contain sufficient information to determine the financial condition of the debtor and whether the debtor is meeting the plan payments and requirements. The debtor must also provide the trustee with a complete inventory of the property of the estate and should notify its bank to send a copy of the monthly bank statement to the trustee.
Financial management course
Before the plan is completed, you must attend a financial management course that has been approved by the U.S. Trustee. A certificate showing completion of the course is filed with official form 23, Debtor’s Certification of Completion of Instructional Course Concerning Personal Financial Management. The documents must be filed before the last payment required under the plan.
After the plan has been administered, the trustee will file a final report and accounting and request a discharge. After a hearing thereon, the estate is in a position to be closed.