What are the duties of a Chapter 13 bankruptcy filer?

Filing for bankruptcy can be a difficult time for a Kentucky resident. Besides the stress of dealing with creditors and debt collectors, there is the fear of not being able to get through the legal process. Add to this that the individual needs to decide what kind of bankruptcy case to file, and it can be a traumatic experience for anyone. One thing that may help ease that stress is to know, ahead of time, what will be expected in a bankruptcy process.

We have previously touched on the differences between Chapter 7 liquidation bankruptcies and Chapter 13 reorganization bankruptcies for individuals. To refresh, in a Chapter 7, upon successful discharge, most debts are forgiven (unless they are not amenable to bankruptcy, like child support of student loans), and any non-exempt assets the debtor owns are sold to pay the creditors. In a chapter 13, by contrast, the debtor agrees to a repayment plan of 3 or 5 years, and may be able to shield some of his or her property from the creditors. To take advantage of this right under Chapter 13, however, the debtor will need to abide by some rules.

Today we will look at some of the duties a Kentucky Chapter 13 filer will have to the court, the trustee and the creditors involved in the bankruptcy case. First off, the debtor in such a case will have to be willing to list all his or her property and all debts he or she may owe, in the bankruptcy filing. This means no rationalizing that no one would want a certain piece of property, or that it is a family heirloom. It should be listed. The debtor must also agree to be honest with the trustee, the court and any attorneys involved in the case, and provide all documents requested in a timely manner. The filing person will need to comply with any orders of the court, and attend every hearing, unless explicitly excused. Finally the debtor will need to make all payments he or she agrees to under the plan, and ensure that all tax documents are filed properly, and any tax owed is paid on time.

While some of these duties will also apply to other bankruptcy filings, as noted above, Chapter 13 differs from a Chapter 7 filing fairly significantly. Understanding the differences, and what the right avenue is for any Kentucky resident will depend on the individual circumstances present in each case.