Chapter 13 bankruptcy is designed for folks with a steady income and a desire to pay back all or most of their debts, but they need more time to regain the financial equilibrium. Usually you have three to five years to pay back debts under Chapter 13.
This type of bankruptcy is more complex than others, so if you desire to handle it yourself, be prepared to perform extensive research. Businesses that declare Chapter 13 bankruptcy can continue to operate and work out agreements with creditors.
Here are the nine steps to filing Chapter 13 without a lawyer:
1. Review Your Alternatives
If you elect Chapter 13, find resource material on the Internet, such as Chapter 13 Bankruptcy Basics from the United States Courts, and at the library to guide you through the process in detail.
Your unsecured and secured debt can’t exceed $269,750 and $807,750, respectively, and you can’t file if a previous bankruptcy petition was dismissed in the last 180 days.
2. Assemble All of Your Information
This information includes your assets (including exempt assets), liabilities, income and expenses. Include any executory contracts, unexpired leases, liens, judgments and court ordered obligations.
Create a list or spreadsheet using this information, identifying all accounts and creditors. You’ll need this information to fill out various U.S. Courts forms.
3. Take a Credit Counseling Class
Enroll in and take the mandatory credit counseling from a bankruptcy-approved credit-counseling agency. Upon completion, you’ll receive a certificate that you include in your filing.
4. File Your Chapter 13 Petition
You can do this with the federal bankruptcy court for your home district. The forms you need to file can be found on the U.S. Courts Bankruptcy Forms page and are available at stationary stores. Be prepared to fill out at least a dozen detailed forms, including the Chapter 13 Meeting of Creditors Notices.
Alternatively, hire a bankruptcy preparation service to fill these forms out on your behalf. The court will then appoint a trustee to oversee your bankruptcy, but the trustee will not provide any legal advice.
5. Fork Over Your Fees
The court will charge you a case filing fee of $235 and an additional $75 for miscellaneous expenses. You pay the clerk of the court when filing the petition, and you can opt to stretch out your payments over four installments, with the last one due within 120 days of filing.
6. File a Repayment Plan
You can do this either with the petition or within 14 days after petitioning. It should contain your schedule for making fixed regular payments to the court trustee.
7. Meet the Creditors
The trustee will convene a meeting with you as the star witness. Your creditors will ask you questions to elicit information about your finances. The meeting typically occurs within 50 days of petitioning. You may be able to reach settlements with some of the creditors at this meeting, which will cause you to update your repayment plan.
8. Go to the Confirmation Hearing
The court holds a hearing to confirm your repayment plan. Creditors can attend and object to the plan at this time.
9. Start Writing Checks
You are committed to making biweekly or monthly payments to your trustee for at least three years (unless you repay before then).
With a little help and a lot of hard work, you can successfully file for Chapter 13 bankruptcy yourself.