Expert Legal Guidance You Can Trust

Welcome to Daniels Law.  Here, we understand the stress that you feel when you have past due medical bills, credit card bills, etc.  Even worst is when your creditors start to garnish your wages, levy your bank accounts, or place liens against your property.  When that happens, your future and financial security can begin to appear pretty scary.  Daniels Law is knowledgeable of the bankruptcy laws, which were created to provide debtors such as you a fresh start and protection against annoying collection letters, harassing telephone calls, and threats of lawsuit for outstanding debts.  As an Illinois boutique law firm that specializes in Chapter 7 and Chapter 13 consumer bankruptcies, Daniels Law can assist you in saving your home, car, and much more.

Chapter 7 Bankruptcy

Chapter 7 is the most common type of bankruptcy filing.  The two most common types of bankruptcy filings by individuals are Chapter 7 and Chapter 13.  The term "Chapter 7 Bankruptcy" comes from the United States Bankruptcy Code, in which the 7th chapter of the bankruptcy laws describes this type of bankruptcy. 

A Chapter 7 bankruptcy is commonly described as a “liquidation”, “complete”, “full”, or the bankruptcy that “wipes everything out.”  Though this is not entirely accurate, a Chapter 7 bankruptcy is a type of bankruptcy in which a debtor (the person who files for bankruptcy) has to  meet certain qualifications and have assets that can be fully exempted (protected) by state or federal law in order to safely eliminate all unsecured debts (i.e. credit cards, medical bills, payday loans, etc.) or secured debts that they do not wish to keep (i.e. home mortgage and car loans).

How Chapter 7 Bankruptcy Can Help

When you file your bankruptcy case, a Trustee will be assigned in order to monitor your case.  The goal of the Trustee will be to determine whether or not you possess any valuable assets that are not fully exempted or protected by law and that can be sold at auction in order to use the proceeds in order to repay your creditors as much as possible.

When you are considering filing for Chapter 7 bankruptcy, it is important to understand that there are different types of bankruptcies, and that being the case, there are specific reasons as to why an individual should file one bankruptcy over another.  It is not necessarily true that one bankruptcy is better than the other.  This is because one individual could benefit significantly from filing a Chapter 7 bankruptcy while a different individual who has different assets, debts, and income would not benefit from filing a Chapter 7 bankruptcy. 

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy gets its name from the United States Bankruptcy Code in which the 13th chapter of the bankruptcy laws describes the second most common, but less recognizable type of bankruptcy. Chapter 13 is a bankruptcy that is referred to as a “restructuring” or “modification” of your debts through a monthly repayment plan.  Many people assume that a monthly repayment plan means that all debts have to be repaid.  However, most people who file Chapter 13 bankruptcy do not repay all their creditors.  In fact, these people usually pay “pennies on the dollar” to unsecured creditors (i.e. credit cards, medical bills, payday loans, etc.), and then they receive various benefits in repaying debts that they wish to repay (i.e. home mortgage and car loans) or that they have to repay (i.e. most taxes, child support and student loans).

How Chapter 13 Bankruptcy Can Help

In every bankruptcy case, a Trustee is assigned to monitor your case.  A Chapter 13 Trustee seeks to receive monthly payments over a 36 to 60 month time period in order to pay the debts that you haver to pay according to your income, assets, and debts. 

When considering whether or not to file a bankruptcy case, it is important to understand that there are several types of bankruptcies.  There are specific reasons why a person should file one bankruptcy type over another.  It is a myth to believe that one bankruptcy type is better than another.  While one person could greatly benefit from filing a Chapter 13 bankruptcy, a different person with different assets, debts, and income would not benefit from filing a Chapter 13 bankruptcy.  The same is true for the other types of bankruptcies.

Here is a list of common Chapter 7 Bankruptcy Questions and Answers: 

1. What is a Chapter 7 Discharge?

It is a court order that releases a debtor from all of their dischargeable debts, as well as instructs creditors not to attempt to collect debts from the debtor.  A debt that is discharged releases the debtor from the obligation to repay it.  Nonetheless, there are some debts that are not dischargeable under Chapter 7.

2. Which Debts Are Not Dischargeable Under a Chapter 7 Bankruptcy?

These are the most common debts that are not dischargeable under Chapter 7:

a. Certain tax debts and debts that were incurred to pay federal tax debts;

b. Debts that are not listed on the debtor’s Chapter 7 forms (unless the creditor knew of the case in time to file a claim);

c. Debts for fraud, embezzlement, or larceny (if the creditor files a timely complaint in the case);

d. Debts for alimony, maintenance, or support;

e. Debts for intentional injury to the person or property of another (if the creditor files a timely complaint);

f. Debts for certain fines or penalties;

g. Debts for personal injury or death caused by the debtor’s operation of a motor vehicle while intoxicated;

h. Debts for obtaining money, property, services, or credit by false pretenses, fraud, or a false financial statement (if the creditor filed a timely complaint in the case);

i. Debts for luxury goods or services and debts for cash advances made within 90 days before the case is filed;

j. Debts for educational benefits and student loans (unless a court finds that not discharging the debt would add an undue hardship on the debtor and their dependents).

3. May a Husband and Wife File Jointly Under Chapter 7?

Yes.  If a joint petition is filed, only one set of bankruptcy forms is required, as well as one filing fee.

4. Under What Conditions Should Both Spouses File Under Chapter 7? 

Both husband and wife should file if one or more substantial dischargeable debts are owed by both spouses.  If both spouses are liable for a substantial debt and only one spouse files under Chapter 7, then the debt could still be collected from the other spouse.

5. How Does the Filing of a Chapter 7 Case Affect Collection and Other Legal Proceedings That Have Been Filed Against the Debtor in Other Courts?

Filing a Chapter 7 case automatically stays (or stops) almost all collection and other legal proceedings that are pending against the debtor.  After a Chapter 7 case is filed, the court mails a notice to all creditors that orders them to stop any further action against the debtor.  A creditor who intentionally violates the automatic stay order may be held in contempt of court as well as may be held liable to the debtor in damages. Proceedings that are criminal in nature, actions to collect alimony, maintenance, or support from exempt property or property acquired by the debtor after the Chapter 7 case was filed are not affected by the automatic stay.  The automatic stay, too, does not protect co-signers and guarantors of the debtor, so a creditor may continue to collect debts of the debtor from those persons.

6. May a Person File Under Chapter 7 if His or Her Debts are Being Administered by a Financial Counselor or Debt Settlement Company?

Yes.  A financial counselor and a debt settlement company have no legal right to prevent anyone from filing under Chapter 7. 

7. Are the Names of Persons Who File Under Chapter 7 Made Public?

When a Chapter 7 case is filed, it becomes public record, and the name of the debtor may be published by some credit-reporting agencies.  However, newspapers do not usually report or publish the names of consumers who file under Chapter 7.

8. Are Employers Notified of Chapter 7 Bankruptcy Cases?

Employers are not usually notified when a Chapter 7 case is filed unless an employer is a creditor.  However, the trustee in a Chapter 7 case may contact an employer in order to seek information about the status of the debtor’s wages or salary at the time the case was filed.  If there are compelling reasons for not informing an employer in a particular case, the trustee should be informed as to this, and he or she may be willing to make other arrangements to obtain the needed information.

9. Does a Person Lose Any Legal or Civil Rights by Filing Under Chapter 7?

No.  Filing under Chapter 7 is not a criminal proceeding, and a person does not lose any civil or constitutional rights by filing.

10. May Employers or Governmental Agencies Discriminate Against Persons Who File Under Chapter 7?

No.  It is illegal for private or governmental employers to discriminate against a person as to employment because that person has filed under Chapter 7.  Similarly, it is illegal for local, state, or federal governmental units to discriminate against a person in the granting of licenses (including a driver’s license), permits, student loans, and similar grants because that person has filed under Chapter 7.

11. Does a Person Lose All of His or Her Property by Filing Under Chapter 7?

Usually not.  Certain property is exempt and therefore cannot be taken by creditors unless it is encumbered by a valid mortgage or lien.  A debtor is usually allowed to retain his or her unencumbered (or unsecured) exempt property.

12. When Must a Chapter 7 Debtor Attend the 341 Meeting of Creditors? What Happens at that Meeting?

The 341 meeting of creditors usually occurs about a month after the case is filed.  At this hearing, the debtor is put under oath and questioned by the trustee about his or her debts, assets, income and expenses.  In most Chapter 7 consumer cases, no creditors appear in court, but any creditor that does appear is usually allowed to question the debtor.

13. What Happens After the Meeting of Creditors?

After the meeting of creditors, the trustee may contact the debtor about the debtor’s property, and the court may issue certain orders to the debtor.  These orders are sent by mail, and they may require the debtor to give certain property to the trustee or provide the trustee with certain information.  If the debtor does not comply with these orders, then the case may be dismissed, and the debtor may be denied a discharge.

14. What is a Trustee in a Chapter 7 Case?

The Trustee is an officer of the court who is appointed to examine the debtor, collect the debtor’s nonexempt property, pay the expenses of the estate, and the claims of creditors.  Too, the trustee has certain administrative duties in a Chapter 7 case, and he or she is the officer in charge of seeing to it that the debtor performs the required duties in the case. A trustee is appointed in a Chapter 7 case, even if the debtor has no nonexempt property.

15. What are the Debtor’s Responsibilities to the Trustee?

The law requires the debtor to cooperate with the trustee in the administration of a Chapter 7 case, including the collection by the trustee of the debtor’s nonexempt property.  If the debtor does not cooperate with the trustee, then the Chapter 7 case may be dismissed, and the debtor may be denied a discharge.

16. What Happens to the Property that the Debtor Turns Over to the Trustee?

It is usually converted to cash, which is used to pay the fees and expenses of the trustee, as well as to pay the claims of unsecured creditors.

17. What if the Debtor has No Non-exempt Property for the Trustee to Collect?

If it appears from the debtor’s Chapter 7 forms that the debtor has no non-exempt property, a notice will be sent to the creditors advising them that there appears to be no assets from which to pay creditors, that it is unnecessary for them to file claims, and that if assets are later discovered, then they will be given an opportunity to file claims.  This type of case is referred to as a “no-asset case.”

18. How are Secured Creditors Dealt with in a Chapter 7 Bankruptcy Case?

Secured creditors are creditors with valid mortgages or liens against the property of the debtor (e.g. car or home).  Property of the debtor that is encumbered by a valid mortgage or lien is called secured property.  The claim of a secured creditor is called a secured claim, and secured claims have to be collected from or enforced against secured property.  Secured claims are not paid by the Trustee.  The debtor may reaffirm or redeem certain types of secured personal property.

19. How are Unsecured Creditors Dealt with in a Chapter 7 Bankruptcy Case?

An unsecured creditor is a creditor who does not have a valid lien or mortgage against the property of the debtor.  If the debtor has non-exempt assets, then unsecured creditors may file claims with the court.  The Trustee will examine these claims and file objections to those that are considered improper.  When the Trustee has collected all of the debtor’s non-exempt property and converted it to cash, and when the court has ruled on the Trustee’s objections to improper claims, then the Trustee will distribute the funds in the form of dividends to the unsecured creditors according to the priorities set forth in the Bankruptcy Code.  Administrative expenses, claims for wages, salaries, and contributions to employee benefit plans, claims for the refund of certain deposits, claims for alimony, maintenance support, and tax claims are given priority in the payment of dividends by the Trustee.  If there are funds remaining after the payment of these priority claims, then they are distributed pro rata to the remaining unsecured creditors.

20. May a Utility Company Refuse to Provide Service to a Debtor if the Company’s Utility Bill is Discharged Under Chapter 7?

The debtor furnishes a utility company with a deposit or other security to ensure the payment of future utility services.  It is illegal for a utility company to refuse to provide future utility service to the debtor, or to otherwise discriminate against the debtor, if its bill for the past utility services is discharged in the Chapter 7 case.

21. How is a Debtor Notified When His or Her Discharge has Been Granted?

Usually by mail.  Most courts send a form called “Discharge of Debtor” to the debtor and to all creditors.  This form is a copy of the court order discharging the debtor from his or her dischargeable debts, and it serves as notice that the debtor’s discharge has been granted.  It is usually mailed about four months after a Chapter 7 case is filed.

22. What if a Debtor Wishes to Pay a Dischargeable Debt?

A debtor may repay as many dischargeable debts as desired after filing under Chapter 7.  By repaying one creditor, a debtor does not become legally obligated to repay any other creditor.  The only dischargeable debt that a debtor is legally obligated to repay is one for which the debtor and the creditor have signed a “reaffirmation agreement.” The reaffirmation agreement must be approved by the court to be valid.  If a dischargeable debt is not covered by a reaffirmation agreement, a debtor is not legally obligated to repay the debt, even if the debtor has made a payment on the debt since filing under Chapter 7, has agreed in writing to repay the debt, or has waived the discharge of the debt.

23. How Long Does a Chapter 7 Case Last?

A Chapter 7 case begins with the filing of the case and ends with the closing of the case by the court.  If the debtor has no non-exempt assets for the Trustee to collect, then the case will most likely be closed shortly after the debtor receives his or her discharge (which is usually about four months after the case is filed). If the debtor has non-exempt assets for the Trustee to collect, then the length of the case will depend on how long it takes the Trustee to collect the assets and perform his or her other duties in the case.  Most consumer cases with assets last about six months, but some last considerably longer.

24. What Should a Person Do if a Creditor Later Attempts to Collect a Debt that Was Discharged Under Chapter 7?

When a Chapter 7 discharge is granted, the court enters an order prohibiting the debtor’s creditors from later attempting to collect any discharged debt from the debtor.  Any creditor who violates this court order may be held in contempt of court and may be liable to the debtor in damages.  If a creditor later attempts to collect a discharged debt from the debtor, then the debtor should give the creditors a copy of the order of discharge and inform the creditor in writing that the debt has been discharged under Chapter 7.  If the creditor persists, then the debtor should contact an attorney. If a creditor files a lawsuit against the debtor on a discharged debt, it is important not to ignore the matter, because even though a judgment entered against the debtor on a discharged debt can later be voided, voiding the judgment may require the services of an attorney (which could be costly to the debtor).

25. How Does a Chapter 7 Discharge Affect the Liability of Co-signers and Other Parties Who May be Liable to a Creditor on a Discharged Debt?

A Chapter 7 discharge releases only the debtor.  The liability of any other party on a debt is not affected by a Chapter 7 discharge.  Therefore, a person who has co-signed or guaranteed a debt for the debtor is still liable for the debt regardless of the debtor’s Chapter 7 discharge.

Important Disclaimer: The information throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney.  There are many intricate rules of law that govern bankruptcy, and there are  several exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances.

Here is a list of common Chapter 13 Bankruptcy Questions and Answers: 

1. How Does A Chapter 13 Bankruptcy Work?

In a Chapter 13 case, the debtor (the person who files for bankruptcy) has to submit a plan for the repayment of all or a portion of his or her debts to the court. The plan has to be approved by the court in order to become effective.  If the court approves the debtor’s plan, then creditors will be prohibited from collecting the debts from the debtor during the course of the case.  The debtor has to make regular payments to the Chapter 13 Trustee, who collects the money paid by the debtor. The Chapter 13 Trustee then disburses the money to creditors as prescribed by the plan.  Upon completion of the payments that are required in the plan, the debtor is then released from liability for the remainder of his or her dischargeable debts.

2. How Does Chapter 13 Differ From Chapter 7 for a Debtor?

The basic difference between Chapter 7 case and Chapter 13 case is that under Chapter 7, the debtor’s non-exempt property (if any exists) is liquidated in order to pay as much as possible of the debtor’s debts.  But, in most Chapter 13 cases, a portion of the debtor’s future income is used to pay as much of the debtor’s debts as is required, considering the debtor’s circumstances.  Also, a Chapter 13 case usually lasts much longer than does a Chapter 7 case.

3. When is Chapter 13 Preferable to Chapter 7 for a Debtor?

Chapter 13 is usually best for a person who:

• Wants to repay all or most of his/her unsecured debts;
• Has the income to do so within a reasonable time;
• Has valuable non-exempt or exempt property securing debts, and either would be lost in a Chapter 7 case;
• Is not eligible for a discharge under Chapter 7;
• Has one or more substantial debts that are dischargeable under Chapter 13 but not under Chapter 7, or
• Has sufficient assets to repay most debts, but needs temporary relief from creditors in order to do so 

4. How Does Chapter 13 Differ From a Private Debt Consolidation Service?

In a Chapter 13 case, the bankruptcy court can provide assistance to the debtor that private debt consolidation services cannot provide.  For example, the bankruptcy court has the power to prohibit creditors from attaching or foreclosing on the debtor’s property; to force unsecured creditors to accept a Chapter 13 plan that pays only a portion of their claims; and to discharge a debtor from unpaid portions of debts.  Private debt consolidation services have none of those powers.

5. What is s Chapter 13 Plan?

It is a written plan (document) that is presented to the bankruptcy court by a debtor and his or her attorney.  The plan states the amount of money and/or other property the debtor will pay to the Chapter 13 Trustee, how long the debtor’s payments to the Trustee will continue, how much will be paid to each of the debtor’s creditors, which creditors will be paid outside of the plan, and certain other technical matters.

6. What Is a Chapter 13 Trustee?

A Trustee is a person who is appointed by the United States Trustee to collect payments from the debtor, make payments to creditors in a manner as set forth in the debtor’s plan, and administer the debtor’s Chapter 13 case until it is closed.  In some cases, the Trustee is required to perform certain other duties, and the debtor is always required to cooperate with the Chapter 13 Trustee.

7. What Debts Can Be Paid Under a Chapter 13 Plan?

Most debts, and this is whether or not they are secured or unsecured.  Even debts that are non-dischargeable (e.g student loans, alimony or child support) can be paid under a Chapter 13 plan.

8. Do All Debts Have to be Paid in Full Under a Chapter 13 Plan?

No.  While priority debts (e.g alimony, child support and certain taxes) and fully secured debts have be paid in full under a Chapter 13 plan, only an amount that the debtor can reasonably afford have to be paid on most other debts.  The unpaid balances of most other debts that are not paid in full are discharged upon completion of the plan.

9. How Much of a Debtor's Income Must be Paid to the Trustee Under a Chapter 13 Plan?

Usually, all of the debtor’s and the debtor’s spouse’s disposable income has to be paid to the Chapter 13 Trustee. Disposable income is income that is received by the debtor and his or her spouse that is not reasonably necessary for the support of the debtor’s dependents.  Detailed calculations determine disposable income and should be calculated by an experienced bankruptcy attorney.

10. When Does a Debtor Begin Making Payments to the Chapter 13 Trustee, and How Do They Have to be Made?

The debtor has to begin making payments to the Chapter 13 Trustee within 30 days after the debtor’s plan is filed with the court.  The payments have to be made regularly on a monthly basis.  If the debtor is employed, then the court requires that the payments be made by the debtor’s employer on each pay period.

11. How Long Does a Chapter 13 Plan Lasts?

A Chapter 13 plan must last for three years, unless all debts can be paid off in less time.  If necessary, a Chapter 13 plan can last for as long as five years, and in a small percentage of cases, five years is required.

12. How are Co-signed or Guaranteed Debts Handled Under Chapter 13?

If a cosigned or guaranteed consumer debt is being paid in full under a Chapter 13 plan, then the creditor may not collect the debts from the co-signer or guarantor. However, if a consumer debt is not being paid in full under the plan, then the creditor can collect the unpaid portion of the debt from the co-signer or guarantor. A consumer debt is a non-business debt. Creditors can collect business debts from co-signers or guarantors even if the debts are to be paid in full under the debtor’s plan.

13. When Should a Husband and Wife File Jointly  Under Chapter 13?

If both spouses are liable for any significant debts, they should consider filing jointly under Chapter 13, even if only one of them has income.

14. May a Self-Employed Person File Under Chapter 13?

Yes.  A self-employed person who meets the eligibility requirements can file under Chapter 13.  A debtor who is engaged in business can continue to operate the business during the case.

15. May a Chapter 7 Case be Converted to a Chapter 13 Case?

A pending Chapter 7 case can be converted to Chapter 13 at any time at the request of the debtor, upon meeting certain qualificatiions.  

16. Will a Person Loose Any Property if He or She Files Under Chapter 13?

Usually not.  Under Chapter 13, creditors are usually paid out of the debtor’s income and not from the debtor’s property.

17. How Does Filing Under Chapter 13 Affect Collection Proceedings and Foreclosures Previously Filed Against the Debtor? 

The filing of a Chapter 13 case automatically stays (stops) all lawsuits, attachments, garnishments, foreclosures, and other actions by creditors against the debtor or the debtor’s property.  A few days after the case is filed, the court will mail a notice to all creditors advising them of the automatic stay.  Most creditors are prohibited from proceeding against the debtor during the entire course of the case.  If the debtor is later granted a discharge, then the creditors will be prohibited from collecting the discharged debts from the debtor after the case is closed.

18. Can a Person Whose Debts are Being Administered by a Financial Counselor or Debt Settlement Company File Under Chapter 13?

Yes.  A financial counselor and debt settlement company has no legal right to prevent a person from filing any type of bankruptcy case, including a Chapter 13 case.

19. Are the Names of Persons Who File Under Chapter 13 Published?

When a Chapter 13 bankruptcy case is filed, it becomes a public record, and the name of the debtor may be published by some credit reporting agencies.  However, newspapers do not usually publish names of persons who file under Chapter 13.

20. Is a Person's Employer Notified When He or She Files Under Chapter 13?

In most cases, yes.  The court requires a debtor’s employer to make payments to the Chapter 13 Trustee on the debtor’s behalf.  Also, the Trustee may contact an employer to verify the debtor’s income. However, if there are compelling reasons for not informing an employer in a particular case, it may be possible to make other arrangements for the required information and payments.

21. Does a Person Loose Any Legal Rights by Filing Under Chapter 13?

No.  Filing a Chapter 13 bankruptcy claim is a civil proceeding and not a criminal proceeding.  Therefore, a person does not lose any legal or constitutional rights by filing.

22. May Employers or Government Agencies Discriminate Against Persons Who File Under Chapter 13?

No.  It is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed under Chapter 13.  It is also illegal for local, state, or federal government agencies to discriminate against a person as to the granting of licenses, permits, student loans, and similar grants because that person has filed under Chapter 13.

23. What is Required for Court Approval of a Chapter 13 Plan? 

The court may confirm a Chapter 13 plan if:

• The plan complies with the legal requirements of Chapter 13;
• All required fees, charges, and deposits have been paid;
• Priority claims will be paid in full under the plan;
• The plan was proposed in good faith;
• Each unsecured creditor will receive at least as much as it would have received  under Chapter 7;
• It appears that the debtor will be able to make the required payments and comply with the plan; and
• Each secured creditor has been addressed in this plan to b paid or surrendered

24. What if the Court Does Not Approve a Debtor's Chapter 13 Plan?

If the court does not approve the plan that is proposed by a debtor, then it will usually give its reasons for refusing to do so.  The debtor may modify the plan and seek court approval of the modified plan.  A debtor who does not wish to modify a proposed plan may either convert the case to Chapter 7 or dismiss the case.

25. How are the Claims of Unsecured Creditors Handled Under Chapter 13? 

Unsecured creditors must file their claims with the bankruptcy court within 90 days after the first date set for the meeting of creditors in order for their claims to be allowed.  Unsecured creditors who fail to file claims within that period are barred from doing so, and upon completion of the plan, their claims will be discharged without having to be paid.  The debtor may file a claim on behalf of a creditor, if desired.  After the claims have been filed, the debtor may file objections to any claims that he or she disputes.  When the claims have been approved by the court, the Chapter 13 Trustee begins paying unsecured creditors as provided for in the plan.

26. 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, then 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 debtor’s inability to make required payments will continue indefinitely or for an extended period, then the case may be dismissed or converted to Chapter 7.  A debtor has several options, each with certain requirements, that require assistance from your bankruptcy attorney.

27. What if the Debtor Incurs New Debts or Needs Credit During a Chapter 13 Case?

Debts or credit obligations incurred after the case is filed have to be paid by the debtor outside the plan, and cannot be included in the current Chapter 13 bankruptcy.  The court issues an order prohibiting the debtor from incurring new debts during the case unless they are approved in advance by the Chapter 13 Trustee.  Therefore, the approval of the Trustee should be obtained before incurring credit or new debts after the case has been filed via your bankruptcy attorney.  The incurrence of regular debts (e.g telephone service and utilities) do not require the Trustee’s approval.

28. What Should the Debtor do if He or She Moves While the Case is Pending?

The debtor should immediately notify his or her attorney so that the bankruptcy court and the Chapter 13 Trustee records can be updated.  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 Trustee because of an incorrect address, then the case may be dismissed, or another unfavorable action may be taken.

29. 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 if he or she qualifies at any time for any reason.  However, if the debtor simply stops making the required payments, then the court may compel the debtor or the debtor’s employer to make the payments and to comply with the orders of the court.  Therefore, the debtor who wishes to discontinue a Chapter 13 case should do so through his or her attorney.

30. What is the Role of the Debtor's Attorney in a Chapter 13 Case?

The debtor’s attorney performs the following functions in a typical case:

• Examining the debtor’s financial situation;
• Determining whether or not a Chapter 13 is feasible, and if so, whether a single or a joint case should be filed;
• Assisting the debtor in the preparation of a budget;
• Devising and implementing methods of dealing with secured creditors;
• Assisting the debtor in devising a plan that meets the needs of the debtor and is acceptable to the court;
• Preparing the necessary pleadings and Chapter 13 forms;
• Filing the Chapter 13 forms and pleadings with the court;
• Attending the meeting of creditors, confirmation hearing, and any other required court hearings;
• Assisting the debtor in obtaining court approval of a Chapter 13 plan;
• Checking the filed claims, filing objections to improper claims, and attending court hearings;
• Assisting the debtor in overcoming any legal obstacles that may arise during the course of the case;
• Assisting the debtor in obtaining a discharge upon the completion or termination of the plan

Important Disclaimer: The information throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney.  There are many intricate rules of law that govern bankruptcy, and there are  several exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances.