Chapter 13 bankruptcy can offer a much-needed reprieve from overwhelming debts. It allows consumers to consolidate debt and repay it with an affordable payment plan. However, the bankruptcy process is complex, and laws are constantly changing. It can be challenging to know how to approach a Chapter 13 bankruptcy.
The Chapter 13 bankruptcy lawyers at Luftman, Heck & Associates have helped countless clients achieve their long-term financial goals through debt relief. If you have questions about Chapter 13 bankruptcy, call (614) 224-1500 or use our online contact form to reach out for a consultation.
What Is Chapter 13 Bankruptcy?
Chapter 13 is a type of consumer bankruptcy that allows individuals to consolidate debts into a single payment plan over three to five years. It offers people who have become overwhelmed by debt to regain control of their lives.
How Long Does Chapter 13 Bankruptcy Take?
The Chapter 13 filing and court process takes several months. However, you can arrange for payment for up to five years. You may be able to pay off debts early if your circumstances change.
Chapter 13 Bankruptcy vs. Chapter 7 Bankruptcy
Chapter 13 and Chapter 7 are both types of consumer bankruptcies for people facing debt that they cannot repay. However, there are critical differences.
Chapter 13 Bankruptcy Features
- Allows you to create a repayment plan that includes all your debts
- Bankruptcy may take up to five years
- You must make enough money to be able to pay on your plan consistently
- There are maximum debt limits for Chapter 13
- You typically get to keep all your assets
Chapter 7 Bankruptcy Features
- Faster bankruptcy, taking only months to complete
- It wipes out all of your debt immediately
- You may need to liquidate some of your assets to repay some creditors
- You must meet strict income requirements to qualify for Chapter 7. If your income is too high, you won’t be able to take advantage of this type of consumer bankruptcy.
How to File for Chapter 13 Bankruptcy in Ohio
There are several steps you must take to file for Chapter 13 bankruptcy.
Step 1: Gather Your Financial Documents
You will need to show many financial documents to your Chapter 13 bankruptcy attorney. They will glean the necessary information from these documents to complete your bankruptcy forms for the court. You should organize your data in a folder and bring it to our office. We will make copies so you can keep the originals.
Documents You Will Need
Some of the documents you will need to provide include:
- Paycheck stubs for the last six months
- Information about additional income for the previous six months
- State and federal tax returns for the last four years
- Bank statements for the previous four months
- Bills showing account numbers and creditor addresses
- Vehicle titles
- Driver’s license
- Social security card
- Life insurance policy declaration pages
- Retirement account statements
- Lawsuits filed against you, including foreclosures and garnishments
- Divorce or dissolution agreement if your marriage ended in the last eight years
- Child support orders
- Spousal support orders
- Lawsuits or insurance claims within the previous four years
- Previous bankruptcy filing documents
- Real estate deeds
Step 2: Determine if You Qualify for Chapter 13 Bankruptcy
To file Chapter 13, you must have enough income to cover your current monthly living expenses as well as your proposed monthly payment plan.
Your debt must also be under a specific limit. You cannot have more than $394,725 in unsecured debt and $1,184,200 in secured debt (these figures are for 2021 – this amount changes annually).
Step 3: Attend a Pre-Filing Online Credit Counseling Course
You must attend an hour-long credit counseling course before you can file for Chapter 13 bankruptcy. It will discuss other options for dealing with your debt. If you have any questions about your options for debt management, Luftman, Heck & Associates can help. We are a full-service debt management law firm.
Step 4: Complete & File Bankruptcy Forms
The forms you need to begin your Chapter 13 bankruptcy are on the Ohio bankruptcy court website. However, your Chapter 13 lawyer can provide them for you and help you complete them. It’s important to let your attorney review them before filing. Mistakes on these forms could delay your bankruptcy.
Step 5: Pay a Chapter 13 Filing Fee
You must pay a court filing fee when you file your Chapter 13 bankruptcy. The filing fee for Chapter 13 in Ohio is currently $313 for 2021.
Step 6: Provide Your Trustee with Documents
The bankruptcy court will assign you a trustee to manage the administration of your case. The trustee must have access to all documents used to file for bankruptcy, along with other information. To avoid delaying your bankruptcy, meet all deadlines.
Step 7: Attend the Meeting of the Creditors (341 Meeting)
You will be required to attend a meeting of the creditors, often called a “341 Meeting.” During this hearing, your trustee will confirm the information you provided about your income, assets, debts, and repayment plan. Creditors may attend this meeting, but they rarely do.
Step 8: Attend a Hearing to Confirm Your Payment Plan
You will attend a final court hearing where the judge reviews your repayment plan and the information you have submitted. They will decide at that hearing whether to confirm the schedule.
Step 9: Complete Your Payment Plan
You must immediately begin making payments on the court-approved plan. Your first payment will be due within 30 days from when the court approves your bankruptcy. If you miss a payment, the court may dismiss your case, and you will forfeit all the benefits of Chapter 13 bankruptcy.
Chapter 13 Bankruptcy FAQ
The Chapter 13 bankruptcy attorneys at Luftman, Heck & Associates are here to answer your questions.
Is There a Chapter 13 Bankruptcy Attorney Near Me?
Yes. Luftman, Heck & Associates provides legal assistance to clients throughout Ohio. We are conveniently located in Columbus, Cleveland, and Cincinnati. We can also begin your case evaluation over the phone. Call us today at (614) 224-1500 or use our online contact form to set up a consultation.
Will Filing Chapter 13 Stop Collections, Foreclosure, and Repossession?
Yes. When you file bankruptcy, the court will put an immediate hold on creditor collection activity. They will no longer be able to:
- Call, email, or send you mail
- Garnish your wages
- Foreclose on your house
- Repossess your car and other property
- Draft money from your bank accounts
Your Chapter 13 bankruptcy lawyer can talk to your creditors and handle any collections activity. If they continue to contact you, you should give them your attorney’s contact information.
Are There Alternatives to Filing Bankruptcy?
Yes. Luftman, Heck & Associates is a full-service debt management law firm. We offer many strategies for dealing with your debt. For example, suppose bankruptcy is not suitable for you. In that case, we can call your creditors and negotiate lower debt settlement offers with them.
We guide you to resources for financial management. Bankruptcy is not your only option. We help you make an informed decision.