What You May Not Know About The Chapter 13 Bankruptcy Process

What You May Not Know About The Chapter 13 Bankruptcy Process

It can be disheartening and overwhelming to know that you cannot manage your debt on your own. This feeling of helplessness may only get worse when you fall behind on your mortgage, eventually receiving threats of foreclosure from creditors. The threat of losing your home can make you feel like all hope is lost, but you may still have an option in the form of Chapter 13 bankruptcy.

Chapter 13 is an option for individuals with certain types of debt, and this may be a beneficial choice by which you can halt the foreclosure process and regain good financial standing. Filing for bankruptcy is not the ideal option for every situation, but it may offer you a way to deal with debt and keep your Ohio home.

What should I expect from the Chapter 13 process?

It is normal to have reservations about the Chapter 13 bankruptcy process. It can be helpful to understand how the process works and what you will have to do as the applicant. Once you file a petition with the court, you will also have to submit the following:

  • List of your assets and liabilities
  • Outline of your current income and expenditures
  • List of any current leases
  • Full statement of your current financial state
  • Evidence of payment from employers
  • Copy of your debt repayment plan

Additionally, the applicant must also provide a tax return from the most recent year and any tax returns filed during the bankruptcy process. Two spouses may choose to file for Chapter 13 bankruptcy together.

After I file, what happens next?

Upon filing for bankruptcy, the automatic stay will go into effect. This stops all collections actions against you and halts all contact from creditors, including any foreclosure proceedings. This allows you time to pay on your outstanding balances according to the terms of your debt repayment plan.

A few weeks after the initial filing, you will have to attend a meeting of the creditors. You will be under oath and will have to answer any questions regarding your finances and repayment plan put forth by the trustee and any creditors who attend the meeting.

Seeking a strong financial future

You may have certain reservations about filing for Chapter 13 bankruptcy, but it would be a reasonable way by which you can confront and get rid of your debt once and for all. In addition to saving your home from the foreclosure process, you can actively pursue a stronger, more stable financial future.