After filing the Chapter 13 bankruptcy, notices are required to be sent to creditors. If the Chapter 13 bankruptcy was filed under an emergency situation (i.e., pending sheriff's sale), your attorney will provide the appropriate notifications to stop the action and preserve your property.
Payments on all secured creditors (mortgages, car loans) are required to be paid with the next payment due after filing for the remainder of the bankruptcy. It is critical to note the date of filing of the bankruptcy. The day your payment comes due on the mortgage/car loan following the petition filing date, a payment must be made. Additionally, 30 days after the filing of the bankruptcy, the first payment to the trustee becomes due. The amount of your payment to the trustee is determined by your Chapter 13 plan. Your lawyer should notify you where to send this payment and how much the payment needs to be. The trustee will only accept certified funds (bank check or money order). If a personal check is sent, it will be returned and not be credited. It is critical to keep good records of your payments to the trustee and mortgage. If a dispute arises about missing payments, it is important that the debtor have good records of the payments made to withstand and challenge. Sometimes, it becomes necessary to trace money orders to verify receipt of payment.
After about five months, the confirmation hearing will be held. At the confirmation hearing, your bankruptcy will either be approved or denied. The trustee will examine your payment history to ensure that you are making your payments timely. Additionally, your Chapter 13 plan must pay all necessary creditors over the length of the bankruptcy. Often, your lawyer will need to file amendments to the Chapter 13 plan to ensure that there are adequate funds in your plan to pay your creditors (the original plan was based on estimates; the amended plan will be based upon the actual claims filed by the creditors). Accordingly, it is likely that your payment to the trustee will change just prior to the confirmation hearing. Once the Chapter 13 plan is confirmed, the payment usually remains constant for the remainder of the bankruptcy.
If you need help filing bankruptcy, or legal assistance after filing bankruptcy, contact the Law Offices of Michael S. Schwartz today. We serve clients throughout Pennsylvania.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.