6 Steps of Chapter 13 Bankruptcy

This is an outline of the basic steps of Chapter 13 Bankruptcy. Once you reach Step 5, if you make the payments required by the Chapter 13 plan, it can be fairly smooth sailing. But life does have some storms, right? These cases last for 3-5 years. Many different things can happen. Some problems can be fixed and others are more difficult. These steps are generally what happens.

Step 1

Prepare and file the case.

The first step is to meet with us. Carol, the attorney, will provide you with a list of documents needed to prepare your case. Once those are returned, your case is prepared. Chapter 13’s includes a “plan” that sets out how much you are going to pay and for how long. It also lists the debt you will be paying through the plan.

Step 2

Attend the Chapter 13 bankruptcy hearing.

Often called a “341 meeting” or “Meeting of Creditors”, the hearing will take place about a month after filing the case (more specifically, as little as 21 days and up 50 days after.)

Hearings dates and times are chosen by the Court a few days after the case is filed. The Court gives a minimum of 21 days notice before the hearing date. Each hearing is assigned a specific time like 9:15 am or 2:00 pm.

The people at the place of the hearings are usually other individuals waiting for their hearing, their attorneys, and the Trustee, along with his staff. The hearings take place in the Chapter 13 bankruptcy Trustee’s office in Tyler, Texas. Even though this hearing is called “Meeting of Creditors” creditors are not required to attend and seldom do unless the case is complex or there is a problem with a particular debt.

The attorney attends the hearing with the client and is present the entire time. The Trustee asks a series of questions relating to the debtor’s finances and their bankruptcy petition and schedules. By the time the hearing is held, the trustee already has documents that support your case and has examined them. He may have questions regarding assets, income, or expenses. Typically, the hearing will usually last from 10 to 30 minutes.

In the Tyler and Marshall Divisions, the Chapter 13 bankruptcy Trustee offers a free “Debtor Education” course. This course is required to receive a discharge and costs around $12-20 if not taken with the Trustee. The course is great because debtors get to meet the staff of the Trustee and learn more about how a Chapter 13 bankruptcy works in the Eastern District of Texas. The Trustee’s staff will give tips that will increase chances for success in the case. This course is scheduled the same day as the hearing for convenience.

Step 3

Get the Chapter 13 plan approved.

The Judge must approve the Chapter 13 plan. A hearing will be set at US Bankruptcy Court in Tyler, Texas.

Step 4

Make sure all the proper claims are filed. Object to claims that are not proper or should not be paid

Step 5

Trustee reconciles all claims.

Step 6

Get the discharge!

We hope these steps help you understand what’s involved in a Chapter 13 bankruptcy.

Return to Chapter 13 bankruptcy main page.