Once the decision to file Chapter 13 Bankruptcy has been made, there are documents that you should gather to make the process of filing bankruptcy easier. We already know that credit reports and asset reports should be pulled as part of the process. But, there is more information that is needed by your attorney. If you would like to be your attorney’s hero, starting gathering these documents now.

When you invoke the power of the bankruptcy court, seeking protection from your creditors, you also have duties as well. Section 521 of the Bankruptcy Code outlines many of these duties. Chapter 13 debtors must file a host of schedules with the bankruptcy court and these schedules are verified under penalty of perjury. As such, these schedules must be complete and accurate. Filing inaccurate or incomplete schedules with the bankruptcy court may result in debtor being denied confirmation of the Chapter 13 plan, and worse, a denial of discharge or being charged with bankruptcy fraud.

If you were to file a Chapter 7 Bankruptcy and you had transferred an asset to anyone within two years prior to the time you filed the Chapter 7 Bankruptcy, you are going to run into Section 548 of the Bankruptcy Code and you will not like it.

Section 547 of the Bankruptcy Code covers preferences. Think of a preference like this- on the eve of filing bankruptcy, you preferred one creditor over another by paying one creditor and not the others. There are, generally speaking, two types of preferences.

No one likes to think about losing their home to foreclosure. It’s a scary time - not only are you looking at the possibility of losing your home and having your family displaced, but foreclosure can also be financially disastrous. Aside from the damage to your credit, it also wipes out any value you have paid into the house such as your down payment and monthly mortgage payments. If you’re facing foreclosure, filing for Chapter 13 bankruptcy can help you avoid foreclosure and maybe even keep your home.

It’s widely known that overwhelming medical debt pushes many Americans into bankruptcy, even if the specific percentage of bankruptcy cases is hotly debated. If you’re recovering from a major illness, the overall numbers don’t matter - the important fact is that you’re drowning in medical debt. Maybe you’ve lost income, or maybe you’re now partially or totally disabled as a result of your medical condition. Whatever your situation, you’re probably extremely anxious about your future and understandably so.

Instead of liquidating assets, Chapter 13 bankruptcy requires you to make monthly payments for three to five years before you can receive a discharge. The court will want to make sure you have enough regular income to make reasonable payments toward your debts. If you don’t have enough income, you may have to file for Chapter 7 bankruptcy instead of Chapter 13. The following is some additional information about how repayment plans work in a Chapter 13 case.

In an earlier post, I started writing about a common issue in chapter 13 bankruptcy cases: a change in income experienced by the debtor while the chapter 13 plan is open.  The last post looked at why this is an issue - namely, the 2005 revision of the bankruptcy law that required chapter 13 bankruptcy debtors to annually send the chapter 13 trustee copies of filed state and federal income tax returns.  It’s from that tax information that a chapter 13 trustee can ask individuals already in confirmed chapter 13 plans to adjust their income and expense schedules to more accurately reflect the debtor’s month-to-month financial situation.

A chapter 13 bankruptcy is a very helpful tool for many people who are encountering overwhelming financial problems.  For individuals dealing with a potential mortgage foreclosure, chapter 13 offers a structured, affordable way to keep families in their homes.  For a person who has a car payment that has unexpectedly become too expensive, chapter 13 offers a way to restructure the car loan to make the payment more affordable.  For the person who is dealing with child support arrears, or back income taxes, chapter 13 provides a structure to pay these important obligations. 

While Section 109(a) describes who can file a Chapter 13 Bankruptcy, we want to know now where can the bankruptcy be filed?

It is not possible to move from one state to another and file Chapter 13 Bankruptcy the next day. 28 U.S. Code Section 1408 states that debtor may file a bankruptcy in the bankruptcy court of the federal judicial district in which the person filing bankruptcy has his/her principal residence, place of business, or principal assets. The domicile has to be where you were domiciled the greater part of the last 6 months and so, where you have been domiciled the last 91 days.

Sometimes, when a debtor files Chapter 7 Bankruptcy, there is a desire to convert to a Chapter 13 Bankruptcy. Maybe, it is because debtor’s income has risen or the US Trustee’s Office has a brought a motion to dismiss debtor’s Chapter 7 Bankruptcy for abuse. What does that mean? In English, it means the US Trustee’s Office believes debtor has the ability to pay back creditors something over a 3-5 year Chapter 13 plan.

Sometimes the unexpected happens.  Sometimes the expected happens with unexpected consequences.  When a loved one passes away and he or she had debt, what happens?  Are you responsible for the debt?  Can you get rid of that debt by filing bankruptcy?  Ah, the worlds of probate and bankruptcy collide at the worst time and your head is spinning. 

After about a decade of steady decline, bankruptcy filing rates have leveled off since about 2015. Many observers take that to mean the filing rates will start going back up, which has not happened since a spike in filings following the 2005 bankruptcy reforms.

The filing rates are usually higher in non-judicial foreclosure states like Minnesota. Other than bankruptcy, homeowners in these states have few options once the mortgage company begins foreclosure proceedings.

Most banks have very little patience when it comes to missed mortgage payments. In fact, many lenders begin pre-foreclosure proceedings after just two missed payments. So, distressed Minnesota homeowners have very little safety cushion.

What is a Chapter 13 Bankruptcy? How does it work? How does it look on my credit? These are all wonderful questions with straight forward answers. Here are some Chapter 13 facts you will find useful.