Top 6 Tips for a Successful Chapter 13 Bankruptcy

Chapter 13 bankruptcy is hard.  Over the last thirty years as an Illinois bankruptcy attorney, I have seen many successes and many failures. A lot of the time the difference between success and failure comes down to simply knowing what to do and when to do it.  The following are what I consider the Top 6 tips for a successful Chapter 13 Bankruptcy.

1. Start your Plan payments on time.
   Your Chapter 13 Plan payments to the trustee begin 30 days after your case is filed. This has never made sense to me because you don’t even see the trustee for your first meeting of creditors (341 meeting) for about a month after your case is filed. So, how can your payments begin before you even have your creditor’s meeting? I don’t know, they just do.

2. Start your mortgage payments on time.
   Your mortgage payment is due the next time one comes due after your case is filed. So, if you file on March 7th then your first mortgage payment will be due April 1st. Be aware that your mortgage company may not send you a coupon, payment book, or statement. You’re responsible for making mortgage payments regardless of whether you have a coupon or not. Your mortgage company will stop any automatic withdrawals also. This may sound unfair but it is just the way it is-period.

3. Keep everything.
   Keep copies of all payments to the trustee and all payments to mortgage companies. If it ever comes to a dispute as to whether a payment was made the burden is on you to produce copies of payments and even proof that the payments were cashed.

   You should also register with the National Data Center (NDC). The NDC keeps track of all your payments to the Trustee. You can see when your payments come due, how much your payment is, and who is being paid.

4. Put your name and bankruptcy case number on all payments you make.
   Lost payments can take time to trace and can create numerous problems.

5. Participate in the monitoring of your case.
   You should also register with the National Data Center (NDC). The NDC keeps track of all your payments to the Trustee. You can see when your payments come due, how much your payment is, and who is being paid. You will be able to monitor who is being paid, how much and when. Just do it!

6. Things Happen…Tell Your Attorney.
   Many things can happen during your Chapter 13 bankruptcy. Here in Illinois, we have a Model Retention Agreement that we attorneys must enter into with our clients. This agreement makes us your attorney for the whole 3 to 5 years of your bankruptcy. If you lose your job, have unexpected medical or other expenses, need to buy a car, refinance your home, inherit money, receive a lawsuit settlement or almost anything unusual happens, then call your attorney. Knowing what your options are including who to pay and who not to pay can make or break your case. Call and call early.

By following these Top 6 tips for a successful Chapter 13 Bankruptcy you can greatly increase the likelihood that you will have a smooth and successful Chapter 13 bankruptcy.