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How to proceed after filing for Chapter 13

A Virginia resident who files for Chapter 13 bankruptcy may worry about delays in action after the submission of required documentation. It is important to be aware of one's responsibilities if the plan is not approved within 30 days of filing. Payments on secured loans such as cars and homes may come due during this time, and protection payments should be made directly to the lenders in these instances. The amounts paid to these entities may be deducted from the amount to be paid to the trustee overseeing the case. Additionally, payments to the bankruptcy trustee must commence within 30 days of filing.

A meeting with creditors typically takes place during the Chapter 13 process, and a judge holds a hearing within 45 days of this event to assess the feasibility of the repayment plan. Creditors are given another opportunity to object to the confirmation of a plan within 28 days of confirmation. Typical complaints may include concerns that liquidation would be more advantageous to the creditor or that the terms don't appropriate enough of a debtor's disposable income.

Payments in a confirmed plan are made to the bankruptcy trustee and are then distributed to creditors. If circumstances change, a debtor might later change the case to Chapter 7 for liquidation purposes. Modifications may be made before or after confirmation of a Chapter 13 case if a creditor objects strongly or if a creditor was inadvertently omitted from the bankruptcy. Modifications could also occur if a debtor experiences a situation that affects their ability to comply with a payment plan.

Because bankruptcy can be confusing, it may be helpful to work with a lawyer at the outset. This may provide clear direction with regard to the types of bankruptcy available while ensuring that all important details are identified and listed accurately.

Source: U.S. Courts, "Individual Debt Adjustment", accessed on Feb. 17, 2015

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