Choosing The Right Course of Action

About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.

What Does A Chapter 13 Plan Include?


When you file for Chapter 13 bankruptcy, the court will expect you to submit a plan. You might wonder, however, what exactly the plan should look like. Here are 4 items usually included in a plan submitted to the court.

Restructuring of Debts

The idea behind Chapter 13 bankruptcy law is that someone with sufficient means should be able to pay down their debts as long as they're given an opportunity. Depending upon your circumstances, your plan should include an explanation of how you intend to pay part or all of the debts you owe. At its core, Chapter 13 bankruptcy is considered a "wage earner's" plan, and that means it's a reprieve from rather than an outright discharge of your debts. A good-faith effort should be made to pay as much of the outstanding debts as possible.

Listing Your Creditors

When you submit your initial petition — well before you submit a plan, to be clear — you will need to supply the names of all your creditors. This allows the court to notify them, allowing the creditors an opportunity to examine and possibly contest the plan.

Once you've proceeded to the part where the plan is being submitted, you will be required to again list all your creditors and the debts you owe them. Make sure you get everyone. Failing to list a creditor means the debt will still be collectible after the court has ruled.

If you're not sure what you owe, contact your creditors. Tell them you need a full accounting of your outstanding debts. Do not agree to any offers they might make, and simply insist upon getting the information.

Expenses, Income, and Property

Your cost of living will be taken into account. Petitioners need to list any income they have, usually based on their most recent tax returns. Bills go in the plan, too. Houses, cars, clothing, and other items are also listed.

A Timeline

The majority of Chapter 13 plans fall into one of two timelines. If your income is below your state's median income, the plan will cover three years. If it is higher than the state's median income, then the plan will go for three years. A longer plan can be approved if the court finds there to be a cause to justify it. Presuming you've made all your payments on time, any remaining debts at the end of the plan are discharged.


10 December 2019