My Personal Chapter 13 Bankruptcy Story

My Personal Chapter 13 Bankruptcy Story

I received back an email reply that a particular attorney would call me during the time window I had selected, the next morning. He actually called me back within an hour of my completing the inquiry, and cordially offered to wait and call again later, or talk now if I had time. Since this was fresh in my mind, I liked the momentum, and asked him all the questions I could think of. He was very direct and detailed and I felt very comfortable, so I decided to work with him then on the spot. He was from a city over 50 miles from my home, but he assured me that we could do everything by email and fax, and if I wanted to meet him, we could arrange to meet halfway. The Federal Bankruptcy Court location was halfway between us, so it was quite workable.

Because of certain property that we wanted to keep, and because we believed we could afford to keep our house and vehicle, we elected to file Chapter 13 Bankruptcy Petition, I had to provide details of my possessions, debts, income, etc. For details on that process, I write more about it here: http://www.happy-after-bankruptcy.com/steps-to-filing-bankruptcy.htm
The draft of the petition was 40 pages long, and he sent it to me in a .pdf file via email about 2 weeks after I gave him all of the information.

Old Law - New Law

Now, I can't really speak about the old law versus the new law when it comes to the October 2005 Bankruptcy Reform Act, except for one thing. There is now a requirement for credit counseling from a service approved by the US Dept. of Justice. http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm
This link can take you to all the approved services.

The credit counseling was the biggest waste of .95 that I have ever spent, and a waste of 2 hours of my time, as well. I essentially had to input all of the same info I provided to my lawyer (see above) into slow-loading on-line forms, then I had to participate in a phone conversation with a "credit counselor", who just repeated the information we'd submitted. There was no value whatsoever added to my understanding of my finances, credit, or anything else. Enough about that.

Blessed Quiet

As soon as we made the decision to file, I gave all my creditors the attorney's name and contact info, and they stopped calling! It was wonderful. The mortgage company and the auto lease company required a case number, but that was provided within days of filing the petition. All contact stopped.

This is where a word of caution is in order. There were 2 accounts we needed to keep paying, and they stopped sending us bills. They also disabled our on-line bill payment access. So, all of a sudden, we had no routine method of making payment. Without any contact it was easy to let a couple of months slip by, and as I was mailing checks, they were preparing a "Motion for Relief from Stay". My attorney said this was common, but I wish I had known about it and avoided it.

Plan Payments

Part of my Chapter 13 filing included a plan to pay off the amounts I was liable for, after the means test had been addressed. I had to make monthly payments to the Bankruptcy Court Trustee, using certified funds. These payments actually started prior to any hearings or court appearances. They were calculated based on my income, and would continue for 36 months, or until all amounts due under the plan were satisfied.

Going to Court

A part of the process of filing bankruptcy involves going to the Federal Bankruptcy Court location - at least once in most cases. The first required appearance for me took place 5 weeks after we officially filed. It was called the Section 341 Meeting of Creditors. This served 2 purposes: the Bankruptcy Trustee took a number of statements from us after checking our photo ID, and these statements were sworn to and notarized, and our conversation was recorded. Also, this was an opportunity for our creditors to appear in person to make claims against us. In our case, no one else showed up. We arrived early and were first to meet with the Trustee. It was over in about 20 minutes.

Roughly a month after the Section 341 Meeting, the hearing took place to confirm our Debtor's Chapter 13 Plan - which was essentially the payback arrangement. Our lawyer stated that we didn't have to both be there - it would look better to the court if one of us did attend, but neither of us were required. I decided to attend, and this time I had to wait for my case to be called on the docket. I had time to observe hear the discussions related to the cases before mine.

What an eye-opening experience. There were people who had multiple criminal charges and/or civil lawsuits filed against them, complicating their bankruptcy filing. There were people (not present) who hadn't been in touch with their lawyer for months, and the lawyer was representing them blind. There were people with injuries and health problems that were seriously complicating their financial situation. When my name was called, my lawyer told the judge that I was current in my Chapter 13 Plan payments, all was in order, and my plan was approved. It took about a minute.

This 40-minute period in court, waiting my turn, served me very well in emphasizing that I could be so much worse off than I am! I spent most of my drive home really counting my blessings.

Right now I am working on moving forward to get back on my financial "feet". Looking back over the past year, I'm relieved to know that there is a system in place for dealing with my debts, and that I can face the future feeling like I have a fresh start. I will continue to document my experience on my site, and invite you to read my articles, as my future unfolds.

My Links : Is Bankruptcy Right For You?