Read the latest Bankruptcy FAQs from Higgins and Associates
What happens if a debtor is unable to complete the chapter 13 payments?
A debtor who is unable to complete the chapter 13 payments has three options: dismiss the chapter 13 case, convert the chapter 13 case to chapter 7, or if the debtor is unable to complete the payments due to circumstances for which he or she should not be held...
When should a husband and wife file jointly under chapter 13?
If both spouses are liable for any significant debts, they should file jointly under chapter 13, even if only one of them has income. Also, if both of them have regular income, they should file jointly.
What if the debtor later decides to discontinue the chapter 13 case?
The debtor has the right to either dismiss a chapter 13 case or convert it to chapter 7 at any time for any reason. However, if the debtor simply stops making the required chapter 13 payments, the court may compel the debtor or the filed employer to make the payments...
May a husband and wife file jointly under chapter 13?
A husband and wife may file jointly under chapter 13 if each of them meets the requirements listed in the answer to Question 18 above, except that only one of them need have regular income and their combined debts must meet the debt limitations described in the answer...
What should the debtor do if he or she moves while the case is pending?
The debtor should immediately notify the bankruptcy court and the chapter 13 trustee in writing of the new address. Most communications in a chapter 13 case are by mail, and if the debtor fails to receive an order of the court or a notice from the chapter 13 trustee...
Who is eligible to file under chapter 13?
Any natural person may file under chapter 13 if the person resides in, does business in, or owns property in the United States, has regular income, has unsecured debts of less than $250,000, has secured debts of less than $750,000, is not a stockbroker or a...
What if the debtor incurs new debts or needs credit during a chapter 13 case?
Only two types of credit obligations or debts incurred after the filing of the case may be included in a chapter 13 plan. These are: (1) debts for taxes that become payable while the case is pending, and (2) consumer debts arising after the filing of the case that are...
How are cosigned or guaranteed debts handled under chapter 13?
If a cosigned or guaranteed consumer debt is being paid in full under a chapter 13 plan, the creditor may not collect the debt from the cosigner or guarantors. However, if a consumer debt is not being paid in full under the plan, the creditor may collect the unpaid...
What if the debtor is temporarily unable to make the chapter 13 payments?
If the debtor is temporarily out of work, injured, or otherwise unable to make the payments required under a chapter 13 plan, the plan can usually be modified so as to enable the debtor to resume the payments when he or she is able to do so. If it appears that the...
How are secured creditors dealt with under chapter 13?
There are four methods of dealing with secured creditors under chapter 13: The creditor may accept the debtor's proposed plan, The creditor may retain its lien and be paid the full amount of its secured claim under the plan, Debtor may surrender the collateral to the...
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