A Chapter 13 bankruptcy is a type of bankruptcy that allows individuals with a regular income to reorganize their debts and pay them off over a period of three to five years. If you are considering filing for Chapter 13 bankruptcy in North Carolina, it is important to understand the process and be prepared to create a repayment plan. Here are the steps to preparing your Chapter 13 plan.
Gather financial information
In order to create a Chapter 13 plan, you will need to provide detailed financial information to the bankruptcy court. This includes information about your income, expenses, assets and debts. You will need to provide proof of your income, such as pay stubs or tax returns, and a list of your debts, including credit card bills, medical bills and any other debts.
Determine your disposable income
Your disposable income is the amount of money you have left after paying for your basic living expenses. The bankruptcy court will use your disposable income to determine how much you can afford to pay toward your debts each month.
Create a budget
In order to determine your disposable income, you will need to create a budget that outlines your income and expenses. This budget should include all of your regular expenses, such as rent or mortgage payments, utilities, food and transportation.
Prioritize your debts
In Chapter 13 bankruptcy, you will be required to pay off your debts in a specific order. Priority debts, such as child support and alimony, must be paid in full. Non-priority debts, such as credit card bills and medical bills, may be paid partially or not at all.
Submit your plan to the bankruptcy court
Once you have gathered all of the necessary financial information and created a budget and repayment plan, you will need to submit your plan to the bankruptcy court for approval. The court will review your plan to ensure that it is feasible and will allow you to pay off your debts within the three- to five-year repayment period.
Reset your finances
Preparing a Chapter 13 plan can be a complex process. Armed with patience and the right knowledge, you can navigate the bankruptcy process in a way that helps you get your financial life back on track.