I’m considering filing a Chapter 13 bankruptcy. Do I have to include all my debts? - Morgan & Morgan (2024)

FAQs

I’m considering filing a Chapter 13 bankruptcy. Do I have to include all my debts? - Morgan & Morgan? ›

Do I have to include all my debts? When you file any type of bankruptcy case, you must list all of your debts and all of your assets. In Chapter 13, however, you can often propose a plan that treats debts differently depending on the type of debt.

You must list all of your debts in your bankruptcy petition without exception.

In this instance, a majority of courts have held that the debts owed creditors inadvertently omitted from the bankruptcy schedules will still be discharged (as long as this debt was incurred prior to the date the bankruptcy was filed).

Listing Credit Card Debts

Bankruptcy law requires you to list all debt on your bankruptcy petition without exception. In other words, if you owe a creditor money, the creditor must appear on your petition. Learn more about information you must include in your bankruptcy papers.

Keeping cash when filing for bankruptcy does change somewhat between Chapter 7 and Chapter 13 bankruptcies. Under Chapter 13, you also have the $550 cash exemption along with a wildcard exemption up to $1,475, allowing you to keep $2,025 in cash under Chapter 13.

Do I have to include all my debts? When you file any type of bankruptcy case, you must list all of your debts and all of your assets.

Also, if the judge finds that you received money or property by fraud, that debt may not be discharged. It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged.

Chapter 13 Eligibility

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's combined total secured and unsecured debts are less than $2,750,000 as of the date of filing for bankruptcy relief.

Cons of Filing Chapter 13 Bankruptcy

Job loss, medical issues, and added expenses all strain the plan. 2. Certain Debts Remain: Common protected debts like most student loans, alimony, and child support can't be discharged in Chapter 13.

Trustees typically examine your financial transactions over the past two years. This review includes bank statements, credit card transactions, income records, and major financial activities.

Can I exclude a credit card from Chapter 13? ›

Accounts With Balances Must Be Listed as Creditors

One of the first requirements in any bankruptcy proceeding is that you furnish the court with a list of all your creditors. The list must include all credit cards, including those with no balances.

A credit card isn't always a creditor because the bankruptcy code defines “creditor” as someone who has a claim for money against the debtor. So a card without a balance does not need to be listed in your bankruptcy, and the credit card company might decide to let you keep it open.

Since a trustee's focus is to review your assets and administer the plan to repay your creditors, yes, he or she will need access to your bank accounts and other financial information.

When higher income and housing repayment requirements are involved, the average payment goes up to $1000 to $2000 or more. If you filed for bankruptcy to avoid foreclosure or are behind in house payments, your Chapter 13 plan payment could be more or less $1500 per month.

In most instances, you will be able to keep your bank account when you file bankruptcy. Financial institutions, like credit unions or banks, usually will not close your bank account when you file a bankruptcy unless you owe them money.

Typically, you'd file a modification motion with the court and serve it on the bankruptcy trustee and your creditors. In most cases, you'll obtain a hearing date, provide a written declaration as to why your plan payment should be reduced, and propose an amended Chapter 13 plan.

For creditors with unsecured debts, it is sometimes possible to ask the courts to exclude those debts from the bankruptcy proceedings. There are only a limited number of circ*mstances in which a debt is not eligible for discharge in bankruptcy proceedings.

The paperwork involved in a Chapter 7 bankruptcy requires that you list all your property and what each item is worth. Then you'll need to know what the exemption limits are in the state in which you are filing. If your state's exemption rules cover the value of the item, you can keep it.

Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.

When the bankruptcy court denies your discharge in a Chapter 7 case, you remain responsible for paying back all your debts. Denial of your Chapter 7 discharge doesn't end the case, though. The Chapter 7 trustee will still gather and liquidate any non-exempt assets; all you lose is your fresh start free of those debts.