Filing Chapter 13 in North Dakota

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In North Dakota, consumers that would like to file for bankruptcy can either file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is also known as a liquidation bankruptcy. In Chapter 7, the bankruptcy trustee seizes the debtor's non-exempt assets, which become part of the debtor's bankruptcy estate. The bankruptcy trustee sells the assets to repay the debtor's creditors. However, the debtor has to be eligible to file for Chapter 7 bankruptcy. To be eligible for Chapter 7, the debtor must make less income than the median for the state, or the debtor must satisfy the means test. The means test measures the amount of disposable income a debtor has each month after paying all necessary bills.

If you have a certain amount of stable disposable income after paying for the basics, or you would like to keep your assets, filing Chapter 13 may be your only bankruptcy option. In a Chapter 13 plan, a debtor continues to pay off debts under an installment payment plan administered by the bankruptcy trustee. The debtor retains possession of their assets while they complete the installment plan.

Filing Chapter 13

To qualify for Chapter 13 bankruptcy, the debtor must be able to show the court that he has regular and reliable income for at least six months prior to filing for bankruptcy. The income can come from any source, including a pension or Social Security benefits. For the court, the most important aspect of the income is that it is regular. The debtor must have regular income to make monthly payments throughout the life of the repayment plan.

In Chapter 13 bankruptcy, the debtor must submit a repayment plan for approval. Working with an attorney, the debtor will create a repayment plan based on their income and reasonable monthly expenses. A repayment plan may last between three and five years. The court approves the repayment plan at the confirmation hearing. The creditors are also invited to attend the confirmation hearing, and may object to the repayment plan. If the bankruptcy court approves the repayment plan, the debtor begins to make monthly payments soon thereafter.

Chapter 13 Bankruptcy Discharge

Chapter 13 reorganizes your debts. The debtor makes monthly payments directly to the bankruptcy trustee, who then distributes the payments to the creditors. You make partial or full payments according to a repayment plan, and any remaining debts are discharged at the plan's completion. If the debtor fails to make a payment, or if a payment is late, it may cause the bankruptcy court to dismiss the case.

Getting Legal Help

If you are considering filing Chapter 13 bankruptcy in North Dakota, contact an experienced bankruptcy attorney as soon as possible. An attorney can help you decide whether filing for bankruptcy is right for you.