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Chapter 13 Bankruptcy
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is sometimes referred to as a “repayment” plan because debtors pay some or all of their unsecured debts (interest free) over a 3-5 year plan. Your payment is based on what you can afford to pay (income minus expenses). If you can afford to pay $200.00 a month for 36 months, but your debt totals $50,000.00, the remaining unsecured debt of $42,800.00 is eliminated upon discharge- tax free. Fantastic debt solution right? We think so.
While in the chapter 13 bankruptcy, all creditor collection activity must cease, by law. To ensure your rights are protected, choose a Minnesota bankruptcy lawyer that has been filing bankruptcies since 1972: LifeBack Law Firm.
Our client’s only regret comes from waiting too long to file bankruptcy. Filing a chapter 13 bankruptcy allows you to move on with life with a payment you can afford. Now that is a practical debt solution.
Chapter 13 Bankruptcy Process: 5 Steps to a Debt Free Life
When filing a Chapter 13 bankruptcy, there are certain steps that every Minnesotan must go through. They include:
Step 1
Free No Obligation Consultation
(30 minutes to 1 hour)
The consult can be done in person, by phone or FaceTime/Skype. If Chapter 13 bankruptcy makes sense for you, we will sign you up during this consultation. This takes only minutes.
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We will then help you with the worksheets (we never send you home with a pile of forms you do not understand) and we pull your credit report. |
Step 2
REVIEW AND SIGN APPOINTMENT
(2 HOURS)
At your review and sign appointment, you will meet with our staff and your bankruptcy attorney to make sure the information on the petition and schedules is complete and accurate. You sign and we file your Chapter 13 bankruptcy within a day or two of this meeting.
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Upon filing, creditor collection activity must stop-by law. |
Step 3
341 Meeting of Creditors
(5-10 minutes)
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Your LifeBack Law Firm lawyer is with you as a bankruptcy trustee asks that you verify the information on the bankruptcy schedules is true, correct, and complete. The questioning typically lasts 5-10 minutes and typically creditors do not appear. |
Step 4
Confirmation Hearing
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The repayment plan that you file is a proposed plan. During the confirmation hearing the court will approve or deny the plan. Attendance at this hearing is NOT required unless your lawyer tells you it is, which is very rare. |
Once the plan is confirmed, it is a court order and all your creditors must comply with it.
Step 5
Discharge Order
Upon completion of your chapter 13 payments, any unpaid debt will be eliminated, tax free. It is a new beginning for you and your family.
Who Can File chapter 13 Bankruptcy?
There are a few specific eligibility requirements to be able to file a chapter 13 bankruptcy in Minnesota. Generally, a debtor must have the ability to make a payment on a Chapter 13 bankruptcy plan. Also, your debt may not exceed:
ADVANTAGES/DISADVANTAGES
ADAVNTAGES TO FILING A CHAPTER 13 BANKRUPTCY IN MINNESOTA
- After your repayment period ends, any unpaid debt is eliminated, tax free
- Creditors must comply and harassment will stop upon filing
- Attorney fees will be paid through the plan
- You lose no assets – exempt or non exempt
- Protects co-signers
- Helps prevent foreclosure and repossessions
DISADVANTAGES TO FILING A CHAPTER 13 BANKRUPTCY IN MINNESOTA
- Your plan, and therefore your debt, last 3-5 years.
- You don’t receive a discharge for 3-5 years.
Chapter 13 Bankruptcy Filing Fees & Costs
Attorney Fee: In chapter 13 bankruptcy the court sets our fees. If you are under the median income, the base attorney fee for chapter 13 bankruptcy is $3,000. The base attorney fee, if you are above the median income is $3,500. Occasionally, we bill our time hourly. The attorney fee is paid when you make a payment on your chapter 13 plan.
Costs: The chapter 13 filing fee is $313. The cost of the credit counseling courses and credit report is an additional $47. A total of $360 must be paid prior to filing chapter 13.
