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What are the steps in a Chapter 13 bankruptcy?

Perhaps you are a Wayne County consumer who is struggling with debt and looking for possible solutions to your problem. Maybe you've read some of our blog posts and have decided that Chapter 13 bankruptcy might be a good option. How does a consumer file for Chapter 13 bankruptcy?

According to the U.S. Bankruptcy Code, the first thing a consumer must do is attend credit counseling. The idea is to determine whether a consumer will be able to repay their debts without filing for bankruptcy. With credit counseling, a consumer will provide their income, debt and expense information to an approved credit counseling agency. The agency will then propose a repayment plan.

After credit counseling is completed, if the consumer does not find the experience to be helpful, the consumer can proceed with the bankruptcy filing. The consumer provides information to the bankruptcy court regarding their financial situation. The consumer will also pay a fee of $274.

When the paperwork is filed and the fee paid, the bankruptcy court will impose an automatic stay. This stay will prevent creditors from beginning or continuing collection efforts. It also stops any creditor lawsuits in which the consumer is the defendant, and it protects the creditor's property from seizure. The stay may not apply to tax debt, child support or pension loans.

In a Chapter 13 bankruptcy, a creditor's debts are included in a repayment plan. In order to be approved, the payment plan must meet certain requirements. When the payment period starts, the consumer is to make regular, manageable payments to the bankruptcy trustee approved by the court. The trustee will distribute the funds to the creditors in the approved manner.

Many consumers find that Chapter 13 bankruptcy is an effective way to escape the shackles of credit card debt and other kinds of debt. A bankruptcy attorney can provide information tailored to the situation of individuals and couples with debt problems.

Source: FindLaw, "Chapter 13 Bankruptcy Rules FAQ," accessed on June 27, 2015

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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