Chapter 7 bankruptcies are designed to totally liquidate debt. A Chapter 13 bankruptcy is sometimes an alternative for those who fail the means test. Other individuals seek Chapter 13 because they are interested in creating a repayment plan rather than liquidating. For a small business, the difference is that the company may thereby be able to remain in operation. Chapter 13 bankruptcies can be quite complex, and you will find that it is in your best interests to hire a College Station bankruptcy attorney to assist you.
Preparing to File
You do not need to take a credit counseling class in order to file Chapter 13, though you may have done so for a Chapter 7 that failed. You will need to gather information about all of your assets and debts. Make sure to obtain up to date credit reports. It is important to keep in mind that there are some debts that cannot be reorganized, such as student loans, recent taxes, and delinquent child/spousal support. Moreover, you will not be able to discharge these after the 3-5 year reorganization/payback period.
Filing Your Bankruptcy
You will need to obtain a petition for Chapter 13 bankruptcy from the court clerk in the bankruptcy court in your jurisdiction. Texas is divided into four bankruptcy districts: the Northern, Southern, Western and Eastern. There are other documents that accompany the petition. Your attorney will tell you which ones you will need.
You must complete the petition and include all pertinent information. Don’t try to hide assets, because the bankruptcy trustee will probably find these, and doing so will jeopardize your case. Assets and property fall into specific categories, and you will need to fill out different schedules in the petition for each. These include, among others:
- Real property
- Exempt property
- Personal property
- Secured and unsecured assets or property being held as collateral by creditors
- Debts for which you have a co-debtor
- Your personal income
- Summary of all monthly expenses
You will then need to calculate the commitment period for your bankruptcy and the amount of disposable income you will have. This is generally called a Chapter 13 means test. This test will determine whether your repayment plan will be for three or five years.
You and your attorney will then file the petition with the bankruptcy court. You will be notified about the date your meeting of creditors is scheduled for, after which you will attend a bankruptcy hearing, at which time the judge will either accept or reject your petition.
If You Need to File Chapter 13
The decision to file Chapter 13 is a serious matter, and should not be taken lightly. That said, sometimes it is the best course for a person to take, given his circumstances. When you file, it is important that you do everything properly in order to avoid having the petition rejected. A College Station bankruptcy lawyer will help. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.