Debt Reorganization
Chapter 13 Bankruptcy Q&A
Understanding the Repayment Plan and Your Path to Financial Recovery
Common Questions About Chapter 13
Chapter 13 bankruptcy is a powerful tool for individuals who have a regular income but are struggling with debt. It allows you to keep your property while paying back creditors over time. Below are answers to the most frequent questions regarding the Chapter 13 process in Grand Rapids.
The process begins by filing a petition and a repayment plan. This plan outlines how you will pay your bills over the next 36 to 60 months. Once filed, you will receive instructions on where to mail your monthly payments to the Trustee.
A Chapter 13 plan must last a minimum of 36 months and cannot exceed 60 months. If you are able to pay your creditors 100% of what is owed, you may be able to complete the plan earlier than 36 months.
If you face a hardship like unemployment, you have options. We can often modify the terms of your plan to lower payments, or you may choose to convert your case to a Chapter 7 bankruptcy if you qualify.
Generally, no. During the term of your plan, you must provide the Trustee with copies of your tax returns. Refund money is considered "disposable income" and is typically paid into the plan to benefit your creditors.
Yes, but you usually need permission from the Court. If you are purchasing a vehicle for cash under $1,000, you may not need to contact us, but for any real estate transactions or larger loans, a court order is required.
The Trustee's office sends quarterly statements showing your progress. Once your final payment is made, the Trustee performs an audit and the Court issues a Notice of Discharge, officially clearing your remaining dischargeable debts.
Important Note on Dismissal
If you receive a "Motion to Dismiss" from the Trustee, it usually means a payment was missed or information is missing. Contact our office immediately so we can cure the problem and keep your bankruptcy protection in place.
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