Filing for Bankruptcy: What Can You Not Do During Chapter 13 Bankruptcy?


Chapter 13 bankruptcy is not a time to be taking risks. It’s essential to understand the limitations of what you can and cannot do during this time.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a court-supervised repayment plan that helps debtors pay off their debts. It can be used to repay all or part of a debtor’s obligations for personal, family, or household debts.

Once the court approves a Chapter 13 repayment plan, a debtor will start making payments to the trustee in charge of their case until their obligations are satisfied.


Differences Between Chapter 13 Bankruptcy and Chapter 7 Bankruptcy


Bankruptcies come in many forms, but Chapter 13 is one of the most common types of bankruptcies for individuals.

To file for Chapter 13 bankruptcy, you must submit a reorganization plan that protects certain assets against repossession or foreclosure. In contrast, Chapter 7 bankruptcy does not require a reorganization or a repayment plan. Instead, it liquidates your non-exempt assets to pay off your creditors.

While filing for bankruptcy can eliminate most of your debts, it is not a complete solution. Some debts, like child support or student loans, cannot be discharged. However, filing for bankruptcy can give you the fresh start you need to financially get back on your feet.

Eligibility Requirements of Chapter 13 Bankruptcy

To file for Chapter 13 bankruptcy, you must have a steady income and not have filed for Chapter 13 bankruptcy for two years or Chapter 7 bankruptcy in the last four years.

You will also need to be up-to-date with filing your tax returns and not have more than $419,275 in unsecured debt or $1,257,850 in secured debt. These figures are subject to change in line with the changes in the Consumer Price Index (CPI).

Filing for Chapter 13 bankruptcy suspends pending foreclosures and other payments owed to creditors but does not eliminate the debt. The goal is to free up enough income to make regular mortgage payments and keep your house.

What Happens to Your Credit Score After Chapter 13 Bankruptcy?


How Chapter 13 Bankruptcy affects your credit score depends on your score before you file for bankruptcy. However, most individuals see a dip in their overall credit score after a Chapter 13 bankruptcy discharge.

If you have any concerns about your credit score, contact Chapter 13 lawyers in Rome, Georgia, today to obtain specific advice for your circumstances.

Restrictions You May Face During Chapter 13 Bankruptcy

Even though Chapter 13 bankruptcy will save your home from foreclosure and help you avoid certain debts, you will face certain restrictions during this very common form of bankruptcy.

Here are some things you cannot do during Chapter 13 bankruptcy:


Take on New Loans

During Chapter 13 bankruptcy, you cannot take on additional debts without seeking bankruptcy court approval. So if you need money before your Chapter 13 bankruptcy repayment plan is approved, you must ask your bankruptcy trustee for authorization to take on new loans.


Obtain New Consumer Credit

You are usually barred from obtaining new consumer credit after filing for Chapter 13 bankruptcy. However, it may be necessary to take on new debt in an emergency, such as a natural disaster or a medical emergency.

Examples of other common reasons for undertaking new debt during Chapter 13 bankruptcy are needing a new automobile or undertaking a home repair.

When to Notify Your Chapter 13 Bankruptcy Trustee

The requirements to notify your Chapter 13 bankruptcy trustee throughout your repayment plan differ according to the state you live in. Speak with Chapter 13 lawyers in Dalton, Georgia, today for more information.

Your bankruptcy trustee will almost certainly need to be notified if you plan to file a motion to take on more debt.

The trustee or bankruptcy court managing your case will usually consider whether there is indeed an emergency, the amount of the new loan, its impact on your repayment plan, and the type of loan, before authorizing the additional debt.

How Long Does Chapter 13 Bankruptcy Take?

Chapter 13 bankruptcy usually takes three to five years to complete. It generally takes 3 months from the date of filing the Chapter 13 petition to the approval of the repayment plan. However, many other factors can affect how long your petition for Chapter 13 will take.

Consult reputable Chapter 13 lawyers in Cartersville today to discuss whether you should file bankruptcy and what your options are.


Surviving Chapter 13 Bankruptcy: Helpful Tips


To survive a Chapter 13 bankruptcy, you need to stay positive and remind yourself of the end goal. The following tips will help you make it through the next three to five years:

1. Stay in Touch With Your Attorney and Creditors

Please don’t assume your attorney and creditors know what is happening with your case and your financial life just because they filed their claim with the court.

It is essential to keep them informed about any changes in your financial situation, such as losing your job or moving out of town.

2. Keep Up With All Payments

Generally speaking, missing even one payment during the three-to-five-year period of your plan is likely to result in the court rejecting your entire plan. If that happens, you would have to start over from scratch and pay another attorney’s fee to file it.

However, your case shouldn’t be dismissed because you don’t make your monthly payments on time or fail to give proper notice when moving or changing jobs. This is something that you need to discuss with an experienced bankruptcy attorney.

3. Keep Track Of Financial Documents

You will need to provide a lot of financial information to your qualified bankruptcy attorney and the court. So it is crucial to keep track of everything from bank statements to pay stubs.

Keeping track of important documents will make it easier for you and your attorney to stay on top of your finances and ensure that you are meeting your repayment plan.

4. Take a Credit Counseling Course

This is a mandatory requirement for most people who file for bankruptcy. The course will teach you about budgeting and money management. It will also allow you to talk to someone about your financial situation.

It’s essential to take the course seriously and learn as much as possible. The information you learn can help you stay on track during your bankruptcy case.

5. Stay on Top of Notifications

The court will send you notifications throughout your case. It is essential to read them carefully and follow the instructions.

These notifications will tell you what’s going on with your case and when you need to take action, so make sure you don’t overlook them.

Some of the notifications may include:

  • Court filings: Any time there’s a hearing or other action in your bankruptcy case, the court will notify you of what’s going on and when you need to be there.
  • Proof of claims: If you have creditors who file evidence of claims in your case, the court will notify you that the claim has been filed and what you need to do if you want to object to it.
  • Payment changes: If your payment plan is modified, the court will send you a notice about the change and how it will affect your payments.
  • Trustee reports: The trustee in your case will file periodic reports with the court, and you’ll receive a notice each time a report is filed. These reports will update you on how your case progresses and help you get to the bottom of any issues.


Chapter 13 Attorney in Georgia: Get Trustworthy Advice You

Bournakis & Mitchell, PC is a reliable, dedicated, knowledgeable, and compassionate Chapter 13 law firm you can contact if you are considering bankruptcy or facing foreclosure. We will assist you through every step of the process. Contact us today to book your free consultation.

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