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A chapter 13 action commences by filing a petition with the bankruptcy court taking care of the area where the borrower has a legal residence or residence.

Unless the court orders otherwise, the borrower must also submit with the court:

* schedules of assets and liabilities;
* a schedule of current income and expenditures;
* a schedule of executory contracts and unexpired leases; and
* a statement of financial affairs.

The borrower needs to also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, obtained 60 days before filing; a statement of monthly net income and any envisioned increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts.

The borrower ought to provide the chapter 13 case trustee with a copy of the tax return or facsimiles for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case started).

A husband and wife may file a joint petition or individual petitions.

The courts need to charge a $ 235 case submission fee and a $ 46 miscellaneous administrative fee. Generally the charges need to be paid to the clerk of the court upon filing. With the court's authorization, having said that, they may be paid in installments.

The number of installments is confined to four, and the debtor must make the final installment no later than 120 days after filing the petition.

If needed, the court may extend the time of any installment, as long as the last payment is paid no later than 180 days after filing the petition. Id. The debtor may also pay the $ 46 administrative rate in regular payments. If a joint petition is filed, only one filing fee and one administrative fee are charged. Debtors should be aware that failing to pay these charges may result in dismissal of the case.

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

* A list of all creditors and the amounts and reasons fo of their claims;
* The source, balance, and amount of the debtor's income;
* An accounting of all of the consumers property; and
* A detailed reporting of the debtor's monthly living costs.

Married individuals must absolutely accumulate this info for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the earnings and expenses of the non-filing spouse is required so that the court, the trustee and creditors can review the household's financial situation.

When a consumer submits a chapter 13 petition, a nonpartisan trustee is appointed to administer the case. In some districts, the U.S. trustee or bankruptcy administrator designates a standing trustee to serve in all chapter 13 cases. The chapter 13 trustee both reviews the case and serves as a disbursing middleperson, acquiring repayments from the debtor and making payments to lenders.

Submitting the petition under chapter 13 "automatically stays" (stops) most collection steps against the consumer or the debtor's property. Filing the petition does not, nonetheless, stay certain types of actions listed under 11 U.S.C. ?? 362 (b), and the stay may be effective simply for a short time in some situations. The stay emerges by operation of law and requires no judicial action. As long as the stay is in effect, financial institutions typically may not begin or carry forward legal actions, wage garnishments, or even make phone calls wanting payments. The bankruptcy clerk gives notice of the bankruptcy case to all lenders whose names and addresses are furnished by the debtor.

Chapter 13 at the same time contains a specific automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any person who is obligated along with the debtor. Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose.

Individuals may use a chapter 13 proceeding to protect their house from foreclosure. The automatic stay stops the foreclosure case as soon as the individual files the chapter 13 petition. The individual may at that point bring the past-due payments current over a reasonable period of time. Even so, the debtor may still lose the home if the mortgage company finishes the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that become due following the chapter 13 filing.

Somewhere between 21 and 50 days after the consumer files the chapter 13 petition, the chapter 13 trustee will definitely convene a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have routine U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the consumer files. In the course of this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan. If a husband and wife file a joint petition, they both needs to attend the creditors' meeting and respond to questions. In order to safeguard their separate judgment, bankruptcy judges are restrained from attending the creditors' meeting. The parties traditionally resolve complications with the plan either during or right after the creditors' meeting. Generally, the debtor can prevent issues by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.

In a chapter 13 case, to take part in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. A governmental unit, however, has 180 days from the date the case is filed file a proof of claim.

After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor's chapter 13 repayment plan.