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I survived the creditors meeting, am I finished?
Not yet. In a chapter 7 bankruptcy you are almost finished. In a chapter 13 bankruptcy you are just beginning.
There’s a big difference in what happens after a creditors meeting depending on whether you filed chapter 7 or chapter 13 bankruptcy.
After a chapter 7 creditors meeting, there’s very little left for you to do. You may have to sign a reaffirmation agreement for a vehicle you are keeping, and sometimes for a house. Other than that, you just wait. A minimum of 60 days must pass from the day your creditors meeting was set before your case can close. This 60 days give creditors the opportunity to review your case to see if they want to contest your right to discharge their debt. 99.9% of the time, nothing happens, the 60 days passes and you are home free. To learn more about which types of debts get discharged and which do not . . . Once that 60 days is up, the clerks at the courthouse need some time to get your discharge entered. We therefore tell people to contact us if they have not heard from the court within 90 days of their creditors meeting. The court will mail you your discharge papers and send our office a notice of the discharge. We then send you a letter congratulating you on the successful completion of your case and give you some pointers on what to do post-bankruptcy.
After a chapter 13 creditors meeting there may or may not be much for you to do, but the case is just beginning. You need to make sure your monthly payments are making it to the trustee. If you are doing a bank draft or ACH, you need to make sure the money is coming out of your bank account. If you are doing payroll deduction, you need to make sure the money is coming out your paycheck. The number one reason that chapter 13s fail is because people don’t make their payments to the chapter 13 trustee. If you do research on chapter 13s nationally, you’ll see that over 50% of them fail. Over 90% of our chapter 13s succeed because we will only take your case after a detailed analysis of your income and expenses as well as an honest discussion of your ability to make the payments that are called for under your plan of repayment.
Within about 4-6 weeks after the creditors meeting there’s something called a confirmation hearing. This is where your plan of repayment goes before the judge. Many many times neither you nor we need to attend this hearing because everything everything has been agreed to and the Trustee is recommending that the judge confirm, or approve, your plan.
At the meeting itself, we’ll learn if the chapter 13 trustee requires any changes to your case. We’ll also learn if he takes issue with something we’ve presented. If changes need to be made, we’ll work with you over the days following the meeting to get the changes filed. If the trustee (or any creditor) takes issue with what we’ve presented, we’ll first negotiate to see if we can resolve the issues. If we resolve these issues, you likely will not have to attend the confirmation hearing.
If we do not resolve these issues, you will likely have to attend the confirmation hearing to give testimony. The most common issues have to do with what you spend on certain items as well as the valuation of a vehicle or mobile home. Giving testimony is not like what you see on court shows or CNN. Nobody is shining a light in your face or yelling at you. It’s a respectful, straightforward information dissemination session. The judge simply uses the information gleaned at this hearing to resolve the dispute that you have with the trustee or a creditor. When there is a dispute, the judge may or may not confirm your plan at that time.
Once the plan is confirmed, in the vast majority of cases, there is nothing special for you to do. You need to ensure that the Trustee payments are being made. You need to let us know if you have a sustained change in income. You need to talk to us if you want to buy or sell a vehicle or real estate or any other financial transaction involving loans or property. These types of transactions often require court approval and it’s usually pretty easy to get so long as we ask permission first.
Once you have completed your plan payments - which can take anywhere from 3-5 years - you become eligible for your discharge. Our office will contact you regarding a form that you have to sign that we must file with the court. Soon after your last payment, you will receive your discharge just like in a chapter 7 bankruptcy and our office will follow the same steps that we followed in a chapter 7.
For more information on bankruptcy, read our guide:
The Bankruptcy Guide
Part 1 - How to File for Bankruptcy'
Part 2 - Means Testing, Median Income and 'Safe Harbor'
Part 3 - Formal Means Testing
Part 4 - Bankruptcy Pre-filing
Part 5 - Post-filing - set date for meeting of creditors
Part 6 - I survived the creditors meeting, am I finished?
Part 7 - Now that I’ve received my discharge, what do I do?