Q: How do debtors know if they need to petition for Chapter 13 bankruptcy reorganization?
A: There are usually two instances where debtors are required to petition for Chapter 13 bankruptcy reorganization. In one instance, debtors can choose to petition for Chapter 13 bankruptcy reorganization if they wish to continue to make payments on something that they owe money on.
On the other hand, debtors may be forced into petitioning for Chapter 13 bankruptcy reorganization after they take a mandatory "means test" that measures a debtor's abilty to pay off their debts. If the results of this test show that the debtor could afford to pay back their debts, the debtor must file for Chapter 13 bankruptcy reorganization to set up a repayment plan.
Q: How does a debtor file for Chapter 13 bankruptcy reorganization?
A: Debtors who file for Chapter 13 bankruptcy must file a petition with a local bankruptcy court to set up a repayment plan. This petition includes information about the debtor's assets, debts and sources of income.
Q: Do debtors have to list all of their assets and debts on this petition?
A: Yes! Debtors who do not list all of their assets and debts could face purjury charges.
Q: What types of personal property can debtors exempt from their bankruptcies?
A: The types of personal property that are exempt depend on which personal property exemption laws one wishes to use. Each state as well as the federal government has its own set of personal property exemption laws that could be used to exempt various items.
As a result, it is a good idea for consumers to consult with a personal bankruptcy lawyer for more information about the different personal property exemption laws that exist.
Q: What happens after a debtor files for Chapter 13 reorganization?
A: Debtors are required to attend a creditors' meeting approximately 30 days after they have filed their petitions. These meetings are led by a court-appointed trustee that tries to develop a reasonable repayment plan for the debtor. Creditors may question the debtor under oath during this meeting but they can not harass the debtor during the proceedings.
Q: How does the trustee develop the repayment plan?
A: The trustee uses the information about the debtor's income, assets and debts to negotiate a reasonable repayment plan for the debtor.
Q: What happens if the creditors disagree with the terms of the repayment plan?
A: Creditors who object to the repayment plan may file an appeal with the judge who handles the debtor's case.
Q: How long do debtors have to complete the terms of the repayment plan?
A: Debtors are usually given 1-5 years to complete the terms of the repayment plan. However, these terms can vary because each debtor's case is unique.
Q: Who can debtors ask for more information?
A: Debtors can ask an experienced local bankruptcy attorney for more information.
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