Once you have filed a Chapter 13 petition, an impartial trustee will be appointed to administer your case. The trustee will evaluate your case and serve as a disbursing agent, collecting payments from you and distributing them to your creditors. Filing the petition automatically stays (stops) most collection actions against you and your property. As long as the stay is in effect, your creditors may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments.

Between twenty and fifty days after you file the Chapter 13 petition, the trustee will hold a meeting of creditors. During this meeting, the trustee places you under oath, and both the trustee and your creditors may ask you questions. You must attend the meeting and answer questions regarding your financial affairs and the proposed terms of the plan. The parties typically resolve any problems with the plan either during, or shortly after, the creditors’ meeting. You can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting. After this meeting, you, the Chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on your Chapter 13 repayment plan.

You must file a repayment plan for court approval within fifteen days of filing the petition. It must allow for payments of fixed amounts to the trustee on a regular basis, usually biweekly or monthly. As mentioned earlier, the trustee then distributes the funds according to the terms of the plan. Within thirty days of filing the bankruptcy case, even if the plan has not yet been approved by the court, you must start making plan payments to the trustee.

Within forty-five days after the creditors’ meeting, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards set forth in the Bankruptcy Code. Your creditors will receive twenty-five days’ notice of the hearing and may object to confirmation. If the court declines your plan, you may file a modified plan. You may also convert the case to a liquidation case under Chapter 7. If the court rejects your modified plan and dismisses your case, it may authorize the trustee to keep some funds for costs, but the trustee must return all remaining funds to you.

As a Chapter 13 debtor you are entitled to a discharge upon completion of all payments under the plan so long as you:

• certify (if applicable) that all of your domestic support obligations that came due prior to making such certification have been paid;
• have not received a discharge in a prior case filed within a certain time frame (two years for prior Chapter 13 cases and four years for prior Chapter 7, 11 and 12 cases); and
• have completed an approved course in financial management (if the U.S. trustee or bankruptcy administrator for your district has determined that such courses are available to you).

The court will not enter the discharge, however, until it determines, after notice and a hearing, that there is no reason to believe there is any pending proceeding that might give rise to a limitation on your homestead exemption. The discharge releases you from all debts provided for by the plan or disallowed, with limited exceptions. Creditors provided for in full, or in part, under the Chapter 13 plan may no longer initiate or continue any legal or other action against you to collect the discharged obligations.

Debts not discharged in Chapter 13 include:

• certain long term obligations (such as a home mortgage);
• debts for alimony or child support;
• certain taxes;
• debts for most government funded or guaranteed educational loans or benefit overpayments;
• debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs; and
• debts for restitution or a criminal fine included in a sentence on your conviction of a crime.

To the extent that they are not fully paid under the Chapter 13 plan, you will still be responsible for these debts after the bankruptcy case has concluded.

The following debts will be discharged unless a creditor timely files and prevails in an action to have such debts declared non-dischargeable:

• Debts for money or property obtained by false pretenses
• Debts for fraud or defalcation while acting in a fiduciary capacity
• Debts for restitution or damages awarded in a civil case for willful or malicious actions by you that cause personal injury or death to a person

The discharge in a Chapter 13 case is somewhat broader than in a Chapter 7 case. Debts dischargeable in a Chapter 13 case, but not in Chapter 7, include debts for willful and malicious injury to property (as opposed to a person), debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.

The bankruptcy law regarding the scope of the Chapter 13 discharge is complex and has recently undergone major changes. You should definitely consult legal counsel regarding the scope of the Chapter 13 discharge prior to filing.

If you are from the Denver, Aurora, Arvada, Wheat Ridge, Littleton, Englewood, Northglenn, Westminster, Broomfield, Lakewood, Brighton, Lafayette, or Golden, Colorado area, and have any questions, please feel free to contact me at: 303-955-7570, help@cobankruptcyhelp.com, or fill out the free consultation form.