What happens in the beginning of a Chapter 13 case?

After I’ve discussed before, Chapter 13 is a sure-fire way to protect your house from foreclosure, and it can serve numerous purposes, including getting caught up on your income and real estate taxes, and wiping out unsecured debt (such as medical bills and credit cards).

So, if you decide to file Chapter 13, what happens next? Okay, you’ve already done your Pre-Bankruptcy Counseling, and you’ve signed your bankruptcy petition and schedules and other documents. Your case has now been filed and you want to know the next steps. First, you should expect to pay a security deposit from your gas and electric utilities, if you included them into your bankruptcy case. Some Pittsburgh-based utilities, namely Duquesne Light Company, will automatically know that you’ve filed bankruptcy and will require a security deposit.

Second, you should be ready to make your first Chapter 13 Plan payment to the Trustee within the first 30 days of your case. If you work for a company, then you should expect that the payment will be made via a wage attachment. Since most people receive a pay check every two weeks, then your payroll deduction will be every two weeks throughout the year; that’s 26 times a year. It’s important to make your first payment within 30 days of your case filing, because that’s a strict law in Bankruptcy Court.

Within the first week of your case, the Court will inform you about your hearing, called a Meeting of Creditors. In Western Pennsylvania, it will be held in downtown Pittsburgh at the Chapter 13 Trustee’s Office, which is located on the 32nd Floor. These hearings are usually scheduled on Mondays, and you will have about 3 weeks to arrange time off from your employer. Usually, these hearings take between 10 and 15 minutes, and most people are in and out of the Trustee’s Office within an hour and a half, including waiting time.

As long as you appear for this hearing, then you may not be required to appear again in Court for the remainder of the case. In fact, as long as all of your income tax returns have already been filed and the Trustee is satisfied with your answers, then the Trustee will close your meeting and you will definitely not be required to again appear. Instead, your attorney will be required to attend a follow-up meeting, called a conciliation conference, which will be about 4-5 months later. The conciliation conference is the time when the Trustee will have reviewed all of the claims in your case and the Court may approve the permanent payment amount for your Chapter 13 plan.

In a nutshell, this is how the majority of Chapter 13 cases begin.

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