Repayment Plan

Under Chapter 13, your unsecured creditors must receive at least as much money through monthly payments as they would have received under a Chapter 7 liquidation. Generally, this means the more nonexempt assets you have, the more your creditors can recover through the Repayment Plan. As with a Chapter 7 bankruptcy, exemptions are not automatic. Once you have submitted your questionnaire, your attorney will perform due diligence on your assets and select the exemptions that minimize the value your creditors would receive, giving you the lowest monthly payment possible.

Credit Counseling and Debtor Education Courses

No more than 180 days before you file for bankruptcy, you must complete a mandatory Credit Counseling course from a qualified non-profit agency.

After you have filed for bankruptcy, you will be required to complete an additional Debtor Education course as well.

The flat fee includes the cost of both mandatory courses.

Automatic Stay

The Automatic Stay will halt nearly any lawsuit, foreclosure action, eviction action, wage garnishment, utility shutoff, or other debt collection activity with few exceptions. The Automatic Stay goes into effect as soon as you file for bankruptcy——no hearing is required. The stay provides immediate relief and puts almost any legal action against you before the Bankruptcy Court, at least temporarily. Because the Automatic Stay has immediate legal effect and may be limited in duration, it is often at the center of the question of when to file for bankruptcy. You should consider the effects of the Automatic Stay prior to filing for bankruptcy to maximize its benefit to you and avoid unfavorable legal outcomes.

Meeting of Creditors

Section 341 of the Bankruptcy Code requires all Chapter 13 filers to attend the Meeting of Creditors after filing for bankruptcy, usually within 30 days. The meeting allows the Bankruptcy Trustee and any creditors in attendance to ask you questions regarding the information you provided in your Petition and Schedules, such as your assets, debts (including debts owed to you), and income. The Trustee is also required to ask you about your awareness of the effects of discharge (including on your credit history) and reaffirmation. Failure to appear may result in your case being dismissed and your filing fee being forfeited. Meeting are currently being held virtually via Zoom in both D.C. and Maryland.

You will need to show or provide the following to the Bankruptcy Trustee:

• Government-issued identification (e.g., driver’s license, passport);

• Evidence of your Social Security number (e.g., Social Security card, Form W-2, Form 1099-K);

• Evidence of current income (e.g., paystubs for past 60 days);

• Your two most recent tax returns;

• Statements for all depository and/or investment accounts; and

• Statements of your current monthly income and living expenses (see forms).

Plan Confirmation Hearing

Most Chapter 13 filers are also required to attend their plan confirmation hearings, during which the Bankruptcy Court determines whether it will approve or deny the proposed Chapter 13 repayment plan. The Bankruptcy Trustee or a creditor may object to a proposed plan on a variety of grounds.

Chapter 13 confirmation hearings are currently being conducted remotely via Zoom in Maryland. Hearings in D.C. may be conducted in person or remotely via Zoom.

Discharge

Once your final plan payment has been submitted to the trustee, the remaining balances on debts that are dischargeable under Chapter 7, like credit card debts and medical debts, are similarly discharged. If you do not complete your plan, however, these debts will not be discharged.

If you would like to learn more about filing for bankruptcy under Chapter 13 or would like to speak to an attorney, please contact us to schedule a free Initial Consultation.