When submitting a Chapter 13 chapter, timing is vital

Timing is important in Chapter 13 bankruptcy. Just as important as knowing if to submit a file is to know when to submit a file. Issues related to when to file a Chapter 13 bankruptcy petition could result in your case being dismissed.

When filing for Chapter 13 bankruptcy, timing matters - LEE LEGAL - DC VA MD

When you need to file quickly

You have to file for bankruptcy before a foreclosure sale or you won’t be able to save the property. If you file for bankruptcy after a foreclosure auction, your home will not be saved. If you submit a Chapter 13 prior to the auction, the auto-stay will take effect. That stops the auction. Missed mortgage payments can then be made up over a longer period of time. However, going bankrupt after a foreclosure auction is too late.

If you file Chapter 13 after your landlord receives an eviction notice, bankruptcy will not prevent the eviction either. You must file for bankruptcy before your landlord receives an eviction notice.

If you file for bankruptcy after a repossession, you can in some cases get your vehicle back. However, the creditor will charge you for the repo costs and fees. It is usually preferable to submit Chapter 13 prior to withdrawal.

When waiting for file makes more sense

Filing an application for bankruptcy under Chapter 13 during civil proceedings will not result in dismissal of the proceedings. Instead, the case is only temporarily “suspended”. Typically, bankruptcy courts allow the plaintiff to be exempted from automatic residence so the litigation can continue. In this way, the claim can be negotiated and liquidated in the right place. It often makes sense to let the litigation run under Chapter 13 before filing for bankruptcy.

It might also make sense to wait until the first of the month for submission. If you file for Chapter 13 bankruptcy after your final mortgage payment is due, you can add that payment to your Chapter 13 plan. However, if you file towards the end of the month, your first mortgage payment will be due within a few days of your submission. Sometimes this can be a drain on your budget and even cause default.

Especially at the beginning of a case in Chapter 13, you don’t want timing issues to bother you. The Chapter 13 trustee will review your case for feasibility to determine if you have the option to repay. If you miss mortgage or vehicle payments, or fail to make payment on your Chapter 13 plan, your case may be at risk.

Don’t let timing scare you

Call Lee Legal to schedule a free, comprehensive financial analysis. When to submit a case is often as important as whether or not to submit it at all. We’ll help you identify the problems and come up with a plan to move on with your life.

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