chapter 13 bankruptcycan take up to five years, and it requires that you think about and handle your finances in a new way. You’ll pay back some or all of your debts under a court-approved repayment plan. While living on a budget isn’t always easy, it can be done if you follow the tips below.
Get a Handle on the Paperwork
Most Chapter 13 repayment plans average about forty pages or more, because you must provide information on your expenses, assets, debts and financial history. If you omit anything, it can come back to you later in the form of additional paperwork and fees. In some jurisdictions, leaving out a creditor or pertinent information can leave you vulnerable to criminal prosecution.
Create a Budget–and Stick to It
Your bankruptcy proceedings will not be successful if you don’t make payments as planned. All Chapter 13 plans are based on the amount of debt to be repaid, and the debtor’s ability to repay. Of those two factors, only the budget is easily controllable, and it can serve as a ‘reality check’ for you. If you can’t afford to repay debts as set forth in your Chapter 13 plan, you may want to consider other options besides bankruptcy. However, if you can budget successfully, you’ll make it through Chapter 13.
Keep in Touch
Once your repayment plan is approved by the court, that is not the end of your bankruptcy case. You should pay careful attention to all mail you get from court trustees, your attorney, and those of your creditors. Learn about the ledgers sent to you by the trustee’s office, which detail your payment history and how those payments were applied.
If changes need to be made to your case, let your lawyer and your trustee know. Bankruptcy can help you eliminate some debts, but it isn’t right for everyone. In some cases, Chapter 13 may no longer be in your best interest, and you may want to convert your case to Chapter 7, or dismiss it entirely. Your chapter 13 lawyer in Lancaster County PA can guide you through the process and recommend the best course of action.
