Filing Chapter 13 in South Carolina

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If you are considering filing for bankruptcy in South Carolina, but are worried about how a bankruptcy will affect your assets, consider filing for Chapter 13 bankruptcy. Consumers can file either for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is a liquidation bankruptcy and involves the bankruptcy trustee selling all the debtors non-exempt assets to repay the debtor’s creditors. Unlike Chapter 7, Chapter 13 bankruptcy allows a debtor to pay off debts under an installment plan administered by a bankruptcy trustee. During the installment plan, the debtor retains control of his assets.

Chapter 13 Bankruptcy in South Carolina

A debtor may be eligible for Chapter 13 bankruptcy if a debtor has regular income for at least six months prior to filing for bankruptcy. The debtor’s income can come from any source and may include family support obligations or social security benefits. The most important aspect of the income is that it is regular. The debtor will be required to provide tax statements and pay stubs to the bankruptcy court. Within 15 days of filing the bankruptcy petition, the debtor must submit a repayment plan. The repayment plan does not discharge the debtor’s unsecured debt immediately, but allows the debtor to develop a three to five year plan to repay the debt.

The debtor, the debtor's attorney and the bankruptcy court will work to create a repayment plan the debtor can afford, taking into account the debtor’s income and monthly expenses. After the debtor submits the repayment plan, the bankruptcy court must confirm the debtor's repayment plan at the confirmation hearing. The debtor’s creditors may also appear at the confirmation hearing and file an objection to all or part of the debtor’s repayment plan.

As in Chapter 7 bankruptcy, a debtor must complete a credit-counseling course within 180 days of filing for bankruptcy. Upon completing the course, the debtor will receive a certificate of completion. The debtor must include the certificate of completion with the bankruptcy petition when the debtor files for Chapter 13 bankruptcy.  

Chapter 13 Discharge

It is the Chapter 13 bankruptcy trustee’s duty to ensure that the debtor makes all monthly payments directly to the bankruptcy trustee, who then distributes them to the debtor’s creditors. If the debtor makes all monthly installments on time and completes the repayment plan, the debtor will receive a bankruptcy discharge. All debts included in the repayment plan will either be paid or discharged. A debtor must also complete a debtor education course before receiving a bankruptcy discharge. The debtor education course provides the debtor will money management skills and a monthly budget for the debtor to utilize after the bankruptcy is complete. The debtor will receive a certificate after completion of the course.  

Getting Legal Help

If you have questions about filing for Chapter 13 bankruptcy in South Carolina, contact an experienced bankruptcy attorney. An attorney can explain the bankruptcy process to you and help you develop a Chapter 13 repayment plan.