In order to have a successful Chapter 13 case, you need to do your part in providing us with the information and documentation required by the bankruptcy laws. The following is a brief list of what we will need from you so that we can move forward with successful filing and completion of your case.
Proof of Income for the Last 6 Months
The bankruptcy law requires that we provide proof of all sources of income for the 6 months before you file your bankruptcy. This includes income from all sources, including, but not limited to the following items:
- Pay stubs
- Proof of Unemployment Income
- Proof of Social Security Income
- Proof of Child Support
- Proof of food stamps
- Proof of disability income
- If you are self employed, we need documentation of your income from all available sources and all other proof that you can supply, including profit and loss statements and other business records, bank deposits, etc.
- There is also a special rule that requires each and every pay stub and other proof of income for the 60 day period before your bankruptcy has been filed. By way of example, if we file your bankruptcy on July 1, in addition to the above, we need proof of all income for the period from May 1 through June 30.
All of this information is required before your case can be filed with the Court.
Credit Counseling and Debtor Education Program
Credit counseling must be completed before your bankruptcy is filed. The charge for credit counseling before bankruptcy is usually $50.00. It is usually very simple and straightforward, and it normally can be done by a phone conference that takes about 45 minutes or less. This session must be done within 180 days before your bankruptcy has been filed.
You also have to complete a debtor education program. You can do your own session for about $50, or you can attend a free session that the trustee offers. This program is also very simple and straightforward. If you don't complete the education program, your bankruptcy case can be dismissed without a discharge, and it will be quite costly to reopen your case, so you must make sure to complete the program.
Your Responsibility for Making Monthly Payments to Trustee
You are required to make monthly payments to the chapter 13 Trustee, Ms. Isabel Balboa. The payments are to be sent every month by way of money order. The address for sending the payments is:
Isabel C. Balboa, Trustee PO Box 1978 Memphis, TN 38101-1978
These payments are due on the first of the month. There is some flexibility, however, as far as the due date. If you send in your payment any time before the 15th of the month, you should be okay.
Requirement to Pay Mortgage Payments
If you are making mortgage payments, you are required to keep up with all regular mortgage payments after your bankruptcy has been filed.
Requirement to Pay Car Payments
If you are making car payments outside of your bankruptcy, you must continue to make those car payments on time.
If you are making a rent payment outside of your bankruptcy, you must continue to make these payments on time.
Child Support Payments
Regular child support payments must be made on time after you file for bankruptcy.
Tax Returns for the Last Two Years
We need a copy of your tax returns for the year 2016 and 2017. This is required in order for your case to be filed with the Court.
If You Own Real Estate, the Following Is Required:
- Proof of your mortgage payments
- Proof of the mortgage payoff – meaning, the amount of money you would have to pay the mortgage company to pay off your mortgage in full. This is required for each mortgage on your home or any other real estate that you own.
- Proof of the value of all real estate that you own. This includes time shares, vacant land, and condos. The Court will require what is called a market analysis or an appraisal. These normally cost $100.00 as a minimum, and possibly as much as $300.00, depending on how detailed the appraisal is. For Cumberland County clients, we normally recommend John Randanella for appraisals. He charges $100. His phone number is 825-9517. If you get a recording, leave a detailed message and he will get back to you promptly. Proof of the value of all of your property by way of market analysis or appraisal is required before your bankruptcy can be filed with the Court.
- We need a copy of the deed for every property that you own.
It is very important that we have documentation of the value of your property and the payoff of each mortgage. The main reason for this is because in order to wipe out your unsecured bills in a Chapter 13, you normally have to demonstrate that you do not have more than $20,200 equity per owner in your residence. The amount of equity you are permitted to have in non residential property is much lower.
If you have more equity in your real estate than permitted by the bankruptcy laws, then you might have to repay a portion or all of your unsecured creditors.
What to Do if You Can't Make Your Payments on Time
Sometimes unexpected things occur and you can't make a Trustee payment on time, or a mortgage payment on time, or other required payments. There is some flexibility in the bankruptcy law to give you additional time if something unexpected occurs.For example, if you have employment difficulties, medical difficulties, or other unexpected events that occur during your bankruptcy that prevent you from making payments on time, we can file a motion with the Court requesting the suspension of payments.
If you simply don't make the payments and don't communicate with us, then your bankruptcy will be in jeopardy of being dismissed and your creditors can come after you, because you will lose the protection that you have while you are in bankruptcy.
If there is a basis for your inability to make payments on time and you let us know, then we can protect you by filing a motion on your behalf. Please make sure to notify us of any difficulties that you might have in making payments on time in the future.
You are required to file a document with the bankruptcy court called a pre-confirmation certification within the 7 day period before your confirmation hearing. This is a form document that indicates that you have been making all of your required payments since you filed your bankruptcy. This form must be completed and signed in order to have your case confirmed and successfully approved by the bankruptcy court.
What to Do if You Are Buying a House, Selling a House, or Refinancing
There are strict rules that control the purchase and sale of property and refinancing of property while you are in bankruptcy. If you are intending to sell real estate or other property that you own, you normally must get bankruptcy court approval. If you are intending to refinance any real estate you own then, you must get bankruptcy court approval. If you want to make a purchase of a car, home, or other significant purchase during your Chapter 13 bankruptcy, you normally have to get bankruptcy court approval.
Therefore, be sure to let us know as soon as possible of any proposed sales, purchases, or refinancing of property so that we can make appropriate applications to the bankruptcy court to protect you. If there is a real estate broker involved, that real estate broker needs to be approved by the bankruptcy court in order to be paid his/her commission
Personal Injury Claims, Malpractice Claims, and Other Law Suits
If you have a lawsuit pending or a possible lawsuit that you intend to pursue when you file your bankruptcy, this must be disclosed in the bankruptcy petition and you must let us know. These items are considered assets that we have to disclose to the bankruptcy court. Failure to disclose the existence of these claims can lead to dismissal of your bankruptcy case and denial of a discharge, meaning that you will not be protected from your creditors.
Please be sure to let us know of any personal injury claims, malpractice claims, or other claims (such as if people owe you money) that you are pursuing or intend to pursue where you might get money in the future.