This video discusses the pre-filing requirements for someone looking to file Chapter 13 bankruptcy. They are similar, but not exactly the same as the requirements for filing Chapter 7 bankruptcy.
What are the prefiling requirements for Chapter 13?
David Siegel: Well, the first thing you have to do for Chapter 13, you have to provide your most recent federal, four years of federal tax returns.
Jesse Barrientes: Four years? Why four years?
David Siegel: Well, legislature felt that under Chapter 13, you should have to provide four. That’s not the case with other Chapters of the Bankruptcy Code but Chapter 13 is different. They want four years of federal tax returns. So if you have not filed and you needed file, you’re going to have to get that done before you are eligible to file Chapter 13.
Jesse Barrientes: Does the trustee, the bankruptcy trustee actually scrutinize your tax returns?
David Siegel: They do. And in fact, if you do not file the tax returns or show proof of filing within 46 days of your Chapter 13 bank of the case being filed, your case will automatically be dismissed. Therefore, a lot of attorneys want to make sure they see the four years of tax returns before they go ahead and file the case because there’s nothing worse than attorneys spending all kinds of time and energy on a bankruptcy case that’s going to be dead on arrival and 46 days of the client hasn’t really filed those federal returns. So that’s the first requirement.
Second requirement is proof of income for the last 60 days. This could be paycheck stubs, Social Security income, unemployment benefits, rental income, any source of income; even royalties or dividends that trustee wants to see because that’s all part of your estate.
And then the last requirement is the same as other Chapters of the Bankruptcy Code, you must take a credit counseling session. It’s a one hour session done on the phone, online or in person. It costs about $15 and takes about an hour. You have to go through this process of listening to information about income and expenses and budgeting to be eligible to file for Chapter 13.
Jesse Barrientes: So it’s a precursor. So I can’t – what happens if I file my bankruptcy and then an hour later, I take the class?
David Siegel: Well, there’s some case law now that says as long as you take that credit counseling on the same day as the filing, you are okay. However, I would play it safe and make sure you complete the credit counseling and get your certificate first because it is time stamped. Make sure you get your certificate first and then file your Chapter 13.
Jesse Barrientes: So if I file a Chapter 13 and then I took class the next day, what happens?
David Siegel: Well, the trustee is going to bring a Motion to Dismiss for in eligibility because you did not have the proper documentation before the filing. Also, a creditor can bring that motion, too. So if you are trying to save a home form foreclosure and you file before you’ve actually completed that credit counseling, the creditor can move to have your case thrown out.
Jesse Barrientes: So it’s important to speak with a seasoned bankruptcy attorney.
David Siegel: Exactly. So Chapter 13 is not something you want to try alone.
Jesse Barrientes: Or to do – yeah, on your own. There’s a lot of places to navigate through then.
