I am in a Chapter 13. I am making my plan payments to the trustee so that is all I need to do in order to get my discharge right?

No. Your monthly obligation in a Chapter 13 is to make your Chapter 13 plan payment to the trustee. However, there are many other aspects that go into a Chapter 13. The first step is to meet with an attorney to determine whether a Chapter 13 is your best option. If so, you need to retain an attorney, pay the attorney’s fees and court costs involved. The attorney will likely provide you with a paper or online packet of information to complete that the attorney will need in order to prepare your petition. You will also need to complete a credit counseling certificate which you can complete online or over the phone. This certificate is required to be completed prior to the filing of the bankruptcy. Upon completion of the petition your attorney will meet with you to review everything to ensure it is complete and accurate. Once all corrections are made you will sign the petition. The attorney will then file the petition.

At this point you are now in a Chapter 13 bankruptcy. You are issued case number by which your creditors can reference your case. Any creditors who are aggressively pursuing collection such as an upcoming foreclosure, repossession or garnishment should be notified immediately. Following the filing of the petition the court also mails out notice to you, your attorney and all of your creditors including the ones that were given immediate notification.

The first Chapter 13 plan payment is due within 30 days of the case being filed. This payment can be made by mailing a cashier’s check or money order to the trustee. The payment can also be made by wage order where your employer withholds the money from your paycheck after tax and sends it directly to the trustee. This is known as a wage order. The benefits to the wage order include not having to go out and purchase a money order or cashier’s check each month. This seems like a minimal expense however $3-5 per month for 60 months can certainly add up to an amount that can be better used elsewhere. Another benefit is that the money never touches your hand. It goes directly from your employer to the trustee taking away any temptations on your part to spend the money elsewhere. Getting behind on plan payments can be devastating to your Chapter 13, can lead to ultimate dismissal of your case and result in foreclosure, repossessions, garnishments that you likely filed to prevent.

Shortly after filing your bankruptcy petition, your attorney or someone from their office will forward the trustee required documents that must be reviewed prior to your meeting of creditors or 341 meeting.  The documents include a copy of your most recently filed federal tax returns or transcripts as well as paystubs for you and your filing spouse, if applicable, covering the 60 days prior to your bankruptcy case being filed. In addition, while it is not necessary to send them to the trustee, it is a requirement that Debtors have filed all federal, state and local tax returns that were due in the past four years prior to the bankruptcy.

Approximately 30 days after the bankruptcy is filed you will be required to attend a meeting of creditors or 341 meeting. Your attorney should attend this meeting with you. You need to bring your ID and SS card with you as they trustee must reviewed these to ensure the information on your petition is listed correctly. In a Chapter 13 there is a form that the trustee asked that you complete prior to your meeting. If you did not receive one prior to the meeting date or forgot to bring yours there are usually copies at the meeting place. If this is the case, you will want to arrive a few minutes early to complete the form and review it with your attorney prior to your case being called. At this meeting the trustee will review your petition with you asking that you verify certain key pieces of information. They may also ask you to clarify some things that may not be clear based on your petition. In addition, there are several required questions that the trustee will ask as a mandatory part of the 341 meeting or meeting of creditors.

Approximately 30 days later, 60 day from the time the petition was filed, a confirmation hearing will be held. If the trustee has objections to your petition or your proposed Chapter 13 plan, objections are typically held prior to this hearing. Any outstanding issues can be addressed at the hearing however it is typically best practice if issues are addressed and worked out with the trustee prior to the hearing. If all issues are resolved, the plan can be confirmed. Once the plan is confirmed this allows the trustee’s office to begin payment to your creditors. Up until this point all money that has been sent in is on hold with the exception of certain adequate protection payments that may be disbursed to ensure that secured creditors are adequately protected in the case of surrender or destruction of the collateral.

As creditors began to receive notice of your bankruptcy they should begin to file a proof of claim with the court detailing what debt they believe is owed to them along with proof of the debt as well as proof perfection or lien in the case of secured creditors. Creditors have 120 days from the time of the 341 meeting or meeting of creditors to file such proof of claim. While the trustee may have money on hand intended to be paid to certain creditors, the trustee cannot disburse payments to any creditor without a proof of claim. Governmental creditors have 180 days from the petition date in order to file a proof of claim. Periodical throughout your bankruptcy you or your attorney should review the case to ensure that every creditor that you want paid (i.e. secured creditors, priority creditors and non-dischargeable general unsecured creditors) has filed a proof of claim. If a creditor has not filed a proof of claim you can contact them and ask them to do so. If this is not successful, your attorney can file a proof of claim on their behalf. It is in your benefit to do this in certain cases to ensure that money intended for secured creditors is not being sent to unsecured creditors as well as to be sure that debts are not still owed upon completion of the bankruptcy.

Prior to completion of the Chapter 13 bankruptcy you must complete a financial management course and obtain the certificate so that it can be filed with the court. In addition, there will be a reminder filed with the court that Debtors need to sign certifying that all Debtors are current on pre-petition and post-petition domestic support obligations. Failure to be current can result in closing of bankruptcy without discharge so it is crucial that all domestic support obligations be paid. Finally, your bankruptcy is complete, you receive your discharge and can move on with rebuilding your credit.