Chronology of a Chapter 13 Case

(see also: Correspondence you can expect to receive, Reasons to file a chapter 13 rather than a chapter 7, What is chapter 13?)

1.    Immediately upon the filing of an individual's first bankruptcy case 11 U.S.C. §362 takes effect to prohibit certain collection activity and other actions against you and your property and in some instances of co-debtors.  A creditor who persists in attempting to collect a debt or taking other action in violation of the bankruptcy code may be penalized.  Pursuant to Bankruptcy Code §521 and Bankruptcy Rule 1007 you must file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of your financial affairs.  Since October 17, 2005 you are also required to file a statement of current monthly income and must file a copy of your last two years income tax returns and "payment advices" - pay stubs - for the sixty (60) days immediately preceding the filing of the case.  In a Chapter 13 case you must file a "Plan" within 15 days after the case is filed.  The "Plan" classifies your creditors as secured, unsecured or priority creditors and sets out the order in which the Chapter 13 trustee is to pay the creditors.  It also set out the schedule of payments to be made by you based primarily on your income minus expenses.

2.    The clerk of the court immediately appoints a trustee (usually there is only one individual serving as a Chapter 13 in a certain geographical area).  The clerk also schedules what is called a §341 meeting (sometimes called a "creditor meeting").  Pursuant to Bankruptcy Code §341 and Bankruptcy Rule 2003 this meeting must happen no less than 20 days or more than 50 days after the case is filed and according to Bankruptcy Rule 2002 the clerk must give all concerned parties at least 20 days notice of the meeting by mail.  Most if not all Chapter 13 Trustees hold educational seminars the same day as the §341 meeting is held.  The Bankruptcy Code requires that you complete a financial management course in order to receive a discharge in a bankruptcy case and these classes satisfy that requirement.  You will likely spend 15-20 minutes in your §341 meeting with a representative of the Chapter 13 Trustee and 2 hours in the financial management class.

    The date the case is filed and the date of the §341 meeting determine the dates for certain other deadlines under several other Bankruptcy Code sections.  The §341 meeting notice notifies all parties of these dates.

    a.    Deadlines for filing Proofs of  Claim.  Pursuant to Bankruptcy Code §502 and Bankruptcy Rule 3002 a creditor other than a governmental entity must file a proof of claim within 90 days after the first date set for the §341 meeting.  A  governmental creditor may filed a claim any time during the 180 days after the case is filed.  A proof of claim is a sworn statement setting forth the amount, type and details of the creditor's claim against you.  The "proof of claim" is submitted on Official Form No. 10 which is mailed by the clerk along with the §341 meeting notice, instructions for completing Official Form No. 10, an Explanation of Certain Bankruptcy Terms, and a list of parties to which notice has been sent.

    b.    Deadline for Objecting to Claimed Exemptions.  Bankruptcy Code §522 sets out a list of property that is protected to you under the Bankruptcy Code and Bankruptcy Rule No. 4003 requires any party to object to your claim of exemption to property within 30 days following the conclusion of the §341 meeting.  Texas is one of several states that has given its citizens the option to choose either the Bankruptcy Code list of protected property or to use the State of Texas statutes for protecting property from creditors and the deadline for objecting to claimed exemptions applies to whichever statutes are used to claim exemptions.

    c.    Date for Confirmation Hearing.  The §341 meeting notice also contains the date and time for a "confirmation hearing".  That is the date that the Bankruptcy Judge will hold a hearing on the plan you have filed to determine whether or not the plan satisfies the required criteria for approval of a plan.  There is no statutory requirement for the date of the confirmation hearing but it is usually scheduled for a date shortly after the deadline for creditors to file their proofs of claim so that the confirmation order can provide for the correct amount of the claims.  Bankruptcy Code §1326 requires that the first payment under your plan be made within 30 days of the date the case is filed.

3.    Your Chapter 13 case can be expected to last 36 to 60 months.  The statement of current monthly income determines the minimum number of months your case must last.  Once all payments required by your Confirmation Order have been made and your financial management course has been completed you are eligible for your "Discharge".  The "discharge" cancels any remaining unpaid debt and provides an injunction against those creditors to prevent them from trying to collect those debts.  You should contact your attorney anytime it appears that you may have difficulty making your payments under the plan or to secured creditors that you are paying direct.  You should also keep documentation of all payments made to your mortgage company, your trustee payments, and payments to other secured creditors.  Upon completion of your plan you should obtain copies of your credit reports and review them with your attorney to be sure they are correctly reported.  You should also obtain an itemized payoff statement from your mortgage company to be sure that they have not added unauthorized charges to your mortgage. 

(see also: Correspondence you can expect to receive, Reasons to file a chapter 13 rather than a chapter 7, What is chapter 13?)