Okay, your Chapter 13 case has been filed and your creditors have been notified. Congratulations– for the first time in a long time, your creditors aren’t calling you night and day. The automatic stay is in effect, which means that your creditors can’t sue you and have to abide by the terms of your Chapter 13 plan, once confirmed.
So, now what? How do you ensure Chapter 13 success? Well, once the papers are filed, the big thing is making your payments. Here are my tips:
- Federal Bankruptcy law states that your first Chapter 13 payment is due within the first 30 days of your case;
- If you fail to make a payment by the time of your 341 Trustee’s meeting, then the Trustee cannot confirm your case!
- Local Court Rules in Western Pennsylvania require debtors who work as employees of companies to make their Chapter 13 plan payments pursuant to wage attachments. If your wage attachment doesn’t seem to be working, then it’s still responsibility to make your payment;
- Only people receiving Social Security income are permitted to pay their plan payments via automatic bank drafts. Otherwise, payments must be made by certified checks or money orders;
- If you are mailing in certified checks, then try and mail your checks by the 15th of the month. The reason is that you must mail the checks to Memphis, Tennessee, which takes time. And our Chapter 13 Trustee usually disburses funds to the creditors at some point between the 24th and 29th of each month. That’s when your mortgage and car loan will be paid, so don’t be late!
- Take the time to complete your Pre Discharge Financial Education course. It takes about two hours, but it’s required for your case to be approved and you might pick up some new tips on budgeting;
- If you really want to go hard-core, then sign up for the Dave Ramsey Financial Peace University, which is fairly affordable;
- Set up your insurance and utility payments to be automatically paid out of your bank accounts. If you fall behind on your utility bills after your bankruptcy case has been filed, then you’re in a heap of trouble, because your utilities will be shut off and they can only rarely be included in your bankruptcy case;
- Finally, if your real estate taxes are not paid through an escrow account, then they are your responsibility. Let’s say that your taxes are $2,400 yearly, then automatically deposit $200 per month into a savings account and don’t touch it until tax time.