The Automatic Stay
Once your chapter 13 bankruptcy case is filed, there are a series of processes and events that take place. Each of these events are required and mandated by the United States Bankruptcy Code and assist in the smooth process of chapter 13 for all parties involved. The first thing that happens is the creation of the automatic stay. The automatic stay happens immediately upon the filing of the chapter 13 bankruptcy case. The creation of the automatic stay puts creditors on notice that certain collection activities for certain debts must cease. This is an immediate benefit that you will receive upon the filing of a chapter 13 bankruptcy case.
Notice To Creditors
Shortly after filing, the Clerk of the United States Bankruptcy Court will send proof of your filing to all of your creditors. This notice will be sent by regular mail to all creditors listed in your petition, all co-debtors listed in your petition, to you and to your attorney. This notice contains very important information. The notice will list the date of filing, date for the meeting of creditors, trustee’s information, debtor’s attorney’s information, date of a confirmation hearing, date to file a proof of claim and date to file an objection to discharge. This information is critical to all parties involved to ensure that proper notice was given regarding the case.
There are some creditors that your attorney will want to notify immediately. This may include a mortgage creditor to stop foreclosure or pending sale, and auto lender to stop an imminent repossession or sale, or a creditor who may have court action pending such as a garnishment or citation to discover assets. Your attorney will send notice of the bankruptcy filing via email, fax or overnight mail in some cases. The goal is to get you immediate relief. Although filing the bankruptcy automatically creates the stay, actual notice of the stay is very critical as well.
Meeting Of Creditors
Approximately 4 to 6 weeks after filing the bankruptcy case, the debtor, debtor’s attorney, creditors and the trustee will convene at a 341 meeting of creditors. This meeting is an opportunity for creditors to inquire regarding the assets, liabilities, income and expenses and statement of financial affairs of the debtor. However, creditors rarely appear at the meeting named in their honor. Instead, the chapter 13 trustee, through either an attorney or staff person, conducts the meeting. The trustee wants to ensure that the information is true and accurate and that the debtor is providing all of his or her disposable income towards the repayment of creditors. This meeting is mandated by the Bankruptcy Code and the information gathered at the meeting will assist the trustee in determining whether or not to recommend the plan provided by the debtor or to object to the plan and demand modifications.
Shortly after the meeting of creditors, the debtor might experience motions from creditors and from the trustee. A creditor may object to confirmation. A creditor may move to modify the automatic stay based upon non-payment, lack of insurance or other factors, such as the debtor’s desire to surrender specific property. The trustee may bring motions to dismiss the case for failure to make amendments, failure to fund the plan or otherwise fail to comply with the provisions of the bankruptcy code. Your attorney will be able to navigate and handle all of these objections and motions on your behalf. You as the debtor may have to provide additional information, show proof of insurance, show proof of funds or otherwise comply with trustee’s requests for further information.
The next step in the process is the actual confirmation hearing. This is where the trustee either recommends to the judge that your plan be confirmed or that it not be confirmed. Cases are typically not confirmed on the first confirmation date. They are often continued several times in order for the debtor to make compliance with trustee’s requests or to otherwise give the trustee time to evaluate whether or not the debtor’s case should be confirmed. If the case is confirmed, the debtor will proceed in the payment plan as depicted in the petition and schedules. If the case is not confirmed, it is often dismissed at that time. The debtor may then bring a motion to vacate the dismissal or possibly refile a new chapter 13.
As you can see, the process for filing a chapter 13 bankruptcy case and having the case confirmed can be lengthy. There are several ups and downs throughout the process. There are many responsibilities and obligations placed on the debtor to make a chapter 13 case work. These include, but are not limited to, appearing at a meeting of creditors, testifying as to assets, liabilities, income and expenses, providing documentation to the trustee and of course, making timely payments pursuant to the terms of the plan. This all should be done with the help of a bankruptcy attorney. An experienced chapter 13 bankruptcy attorney can make a huge difference in the success of your case. For those reasons, choose your chapter 13 bankruptcy attorney wisely.