Chapter 13 bankruptcy is a three to five year debt repayment plan. It is a short term fix to ensure long term prosperity. When you emerge from Chapter 13 bankruptcy you will be in a better financial position. However, neither your attorney, nor the bankruptcy court, nor the bankruptcy process can produce miracles. The lion’s share of the responsibility for change and long term success is on you. If you and your family follow the ten directions listed below, you will be on the path to recovery and financial health.
1. "Stay the course." You and your attorney have developed a realistic family budget. It is your responsibility to stick with it. Now is a good time to change your spending habits and become financially conservative.
2. Notify your attorney of any change (or potential change) in your income. The sooner your attorney knows about the financial change, the better your chances of a successful outcome. You and your attorney can discuss your options when there is a job loss, reduction of income, etc.
3. Make all plan payments on time. A voluntary wage deduction that sends your plan payment to the trustee every month has a greater chance of success.
4. Pay any post-petition debt on time every month, including mortgage or car payments. Scheduling bank debts ensures on-time payment.
5. Avoid bank overdrafts. Bank fees can quickly bust a budget.
6. Avoid gambling.
7. Do not apply for credit during your Chapter 13 case until you have discussed the matter with your attorney. Chapter 13 debtors are prohibited from using credit without prior permission.
8. Maintain insurance on your house and car.
9. Notify your attorney if you change addresses or telephone numbers. Your attorney must be in contact with you during your case to inform you of any requests from the trustee (such as providing income tax returns).
10. Open mail from your attorney, the bankruptcy trustee, creditors, or the bankruptcy court.
Remember, you and your attorney are partners in your bankruptcy case. Your attorney will guide you through the process, but it is up to you to manage your finances responsibly. Chapter 13 bankruptcy can provide a fresh financial start and a better financial future. Contact an experienced bankruptcy attorney to discuss your personal financial situation and learn how the federal bankruptcy laws can help you.