13 Ways To Maximize Your Chances For Chapter 13 Bankruptcy Success

31 Aug 13 Ways To Maximize Your Chances For Chapter 13 Bankruptcy Success

You file for Chapter 13 bankruptcy for a variety of reasons: to save a home, car or other property; to reorganize your finances; to account for income that’s too high to qualify you for a Chapter 7; because it’s better for your individual situation. Whatever your reason, you deserve to succeed.

There’s a long road involved in a Chapter 13 bankruptcy. With your Plan lasting 36-60 months, you’re going to get to know your lawyer pretty well. You may not speak that often, but there have got to be open lines of communication in order to make things run smoothly.

From the lawyer’s side, a Chapter 13 bankruptcy involves not only thorough review of your financial information and meticulous preparation of the court documents, but also a keen eye to red flags.

Confirmation, any good Chapter 13 lawyer will tell you, is in many ways the beginning rather than the end.

But what about your responsibilities? It’s a two-way street, after all.

  1. remain proactive and involved in your case the entire time it is pending.
  2. recognize that your Chapter 13 provides you a great opportunity to pay back your debt based on a realistic budget.
  3. recognize that the bankruptcy law gives you power, enabling you to modify the rights of your creditors, while protecting you from almost all adverse legal action.
  4. make your Chapter 13 Plan payments. On time. Every month.
  5. make your new mortgage and car payments. On time. Every month.
  6. keep the insurance on your house and car paid up to date.
  7. If you sense that you are going to fall behind or you have an emergency, call your lawyer today. Not tomorrow. Not next week. Right this second.
  8. Your lawyer is not a miracle worker – he will not make trustee or mortgage payments for you. Your lawyer’s job is to create a payment plan that should work. You are the one who has to make it work.
  9. If you change your phone number or if you get a new email or postal address, let your lawyer know immediately.
  10. If something shows up in your mailbox and you don’t understand what it is, call or email your lawyer – immediately.
  11. If you lose your job or if your budget changes, let your lawyer know immediately.
  12. Bankruptcy should be seen as a last resort. Don’t think about what you want, think about what you need.
  13. Do not go into Chapter 13 with overly optimistic assumptions – you may not get a bonus this year, gas prices will likely go up, overtime may be cut, your children will cost you more every year, insurance, food and medicine costs will go up.

Your Chapter 13 bankruptcy is a learning experience. Once your case is over, you do not want to file again. Examine your spending patterns and think about what got you into trouble and how to spot the warning signs.

Image credit: jamesalmeida

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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