There’s not really a specific time that is all around “bad” for filing Chapter 13 bankruptcy. The best timing to file really depends upon your specific situation. It can depend upon the timing of personal events, the date of the last large credit transaction, major financial crises, etc. One thing that is useful to consider when planning your Chapter 13 bankruptcy filing is tax season. Have you filed your taxes? Will you be filing your taxes? Will your taxes be filed right in the midst of your bankruptcy filing? Will you be receiving a tax refund during your Chapter 13 bankruptcy?
Chapter 13 Bankruptcy: The Chapter 13 bankruptcy is sometimes referred to as a wage earner’s plan. This type of bankruptcy works well for individuals who have a steady income. It allows them to work with their bankruptcy trustee to put a plan to repay debt in place. The plan can include all the debtor’s balances or it can only pay back a portion of the debt. The debtor then makes agreed upon installment payments to the trustee for three to five years. These installment payments are distributed to the debtor’s creditors as agreed in the Chapter 13 repayment schedule.
Bankruptcy petitioners who will be receiving a tax refund during their Chapter 13 bankruptcy always have the same questions, “Will I get to keep it?” It’s a fair question. Who does get to benefit from the funds that come back in a tax refund during bankruptcy?
The answer to this question should be in your confirmation order. The confirmation order is the document that the judge signed approving your Chapter 13 Plan. Within the document outlining your repayment plan, you should find information about whether or not you are obligated to surrender any tax refunds to the trustee assigned to you for your Chapter 13 bankruptcy.
Every Chapter 13 bankruptcy petitioner is assigned a trustee for his or her case. This individual is the one that will oversee your bankruptcy until its completion: dismissal or discharge. After you submit your paystubs, tax returns and other financial documentation for the trustee’s review, you have a meeting. This is where the process begins. The confirmation order will come shortly thereafter.
If you need additional information about the Chapter 13 bankruptcy filing process, please get in touch with the southern California bankruptcy attorneys at Westgate Law today.