How to Survive Chapter 13 Bankruptcy in Arizona?
While a Chapter 13 bankruptcy doesn’t come with asset liquidation like a Chapter 7 filing, it has its specifics. Many people going through the process worry about their ability to make the necessary payments under the Chapter 13 plan. If you’re one of these individuals, you may be interested in getting some reliable tips for surviving your Chapter 13 bankruptcy and making the best use of it.
Plan for the Long-Term
Financial planning is crucial for timely Chapter 13 bankruptcy payments.
When doing a financial plan, however, you’ll have to do some long-term calculations.
The typical Chapter 13 payment plan is valid for a period ranging from three to five years. You have to continue making the payments over the entire duration of the plan.
While a sudden change in income (losing your job, getting diagnosed with a chronic medical condition) can contribute to a recalculation of the Chapter 13 plan, you will still have to be financially responsible and capable of sticking to the bankruptcy terms and conditions.
Notify Your Bankruptcy Trustee Immediately about a Change in Circumstances
You should communicate effectively with your bankruptcy trustee. This is especially important if you experience a sudden change in circumstances.
Three to five years is a very long period of time. Chances are that your life will not remain the same over the duration of the bankruptcy. That’s ok and the Arizona bankruptcy court will account for such changes (whether positive or negative).
If your income gets reduced, you become disabled or you experience another serious life-changing event, you should get in touch with your bankruptcy attorney and trustee immediately. It’s possible to get the Chapter 13 plan modified so that you can still continue making the payments.
Often, a motion will have to be filed in court to change the plan. The process may take some time, which is why you shouldn’t hesitate to communicate news.
Determine How You’re Going to Handle Living Expenses
Your Chapter 13 bankruptcy plan is based on your disposable income. This is the sum left after you handle essential expenses each month.
Once you get an idea about how much you’ll have to contribute to the Chapter 13 payments, you will also need to calculate how you’re going to handle living expenses.
You may have to stop spending on certain things you like or your family needs. A bit of financial discipline will be required. Talk to everyone and make sure that family members are on board with the financial changes. Tackling the situation together and going through the adjustment will make it much easier to continue enjoying a good life while also dealing with your bankruptcy.
Court filings and reports will keep on coming your way over the course of the Chapter 13 plan. You will receive information about changes or progress being made. Don’t neglect such documents – they are required to stay afloat.
If you receive letters from creditors, you should let your lawyer know. Once the Chapter 13 automatic stay comes in effect, creditors should refrain from contacting you directly.
You will also receive regular trustee reports. These reports contain information about the debt amount and the progress being made. Always make sure that the amount featured is accurate – mistakes do happen.
Finally, you may receive court filings every once in a while. These include legal motions, creditor disputes and other legal paperwork. These notifications should be taken directly to your Arizona bankruptcy attorney because some of them may require action on your behalf.
Surviving a Chapter 13 bankruptcy doesn’t have to be difficult if you’re disciplined. Getting a bit of professional assistance is also going to provide you with the tools required to get a fresh start in the end of the payment period.
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