After filing a voluntary or involuntary petition, the debtor automatically becomes the "debtor in possession," who is a debtor that keeps possession and control of their assets while undergoing a debt reorganization plan. The individual will remain a “debtor in possession” until their plan of reorganization is confirmed, the case is dismissed or converted to Chapter 7, or a Chapter 11 trustee is appointed.
In most cases, a written disclosure statement and a plan of reorganization must be filed with the court. The disclosure statement should contain information on the debtor’s assets, liabilities, and business affairs so as to allow the creditor to make an informed judgment about the debtor's plan of reorganization. The court will examine the plan and confirm it in a final confirmation hearing.
Chapter 13 Bankruptcy Cases in Mesa, AZ
A Chapter 13 bankruptcy, or a “wage earner's plan,” enables individuals with regular income to develop a plan to repay all or part of their debts. Under Chapter 13, debtors propose a repayment plan to make installments to creditors over 3-5 years. During this time, creditors may not start or resume collection efforts.
As opposed to Chapter 7, which poses a risk of losing the home, Chapter 13 offers individuals a chance to save their homes from foreclosure. With Chapter 13, it is possible to stop foreclosure proceedings and address delinquent mortgage payments over time. (The debtor may lose their home, though, if they fail to make these regular mortgage payments due after the Chapter 13 filing). In general, any individual is eligible for Chapter 13 relief, as long as their unsecured debts are less than $394,725 and secured debts less than $1,184,200. However, a corporation or partnership may not be a Chapter 13 debtor.
A debtor may begin their Chapter 13 case by filing a petition with the Mesa bankruptcy court and provide the information as required for Chapter 7 or 11 bankruptcy, listed above. The debtor must also file the additional required documents listed under Chapter 11 bankruptcy, including a copy of any repayment plan and evidence of payment from employers received 60 days prior to filing.
Much like the Chapter 7 process, in Chapter 13 an impartial trustee is appointed to administer the case. The trustee will evaluate the case and serve as a disbursing agent, helping to collect payments from the debtor and distributing them to creditors. Filing Chapter 13 will also automatically stay most collection actions against the debtor or their property for a short time, in which creditors may not take collection actions or pursue litigation against the debtors.
Between 21-50 days after the debtor files a petition, the trustee will hold a meeting of creditors to address problems with the repayment plan. After the meeting, the debtor, trustee, and creditors may attend a final court hearing to confirm the repayment plan.
Contact the Law Office of Phil Hineman, P.C. Today
If you seek to file for bankruptcy in Mesa, Arizona, do not hesitate to consult an experienced legal professional to guide you through the process. Attorney Phil Hineman has handled over 10,000 bankruptcy cases throughout his career and can help you determine your eligibility for Chapter 7, 11, or 13 bankruptcy (and whether these bankruptcy plans are in your best interests). Let an experienced bankruptcy attorney help you navigate your Mesa situation today.