Common Terms You Need to Know When Filing Chapter 13 Bankruptcy in Tucson, Arizona

The terms used in a Chapter 13 bankruptcy case can be difficult to understand if you have no prior bankruptcy experience. Our legal team takes the time to explain terms used in the bankruptcy process to help you feel more at ease.

Below are several of the most common terms you will hear as you go through the Chapter 13 bankruptcy process. We will explain other terms used in your case as we walk you through each step in the bankruptcy process.

Chapter 13 Bankruptcy Forms

• Chapter 13 Bankruptcy Petition — A bankruptcy petition is the form that you complete and file to begin your bankruptcy case. The petition contains basic information such as your name, address, Social Security number, and chapter of filing. When you file the petition, the court issues a bankruptcy case number.
• Chapter 13 Schedules and Statements — The schedules and statements are the forms you must complete and file with your bankruptcy petition. The forms contain detailed information about your finances, including income, expenses, financial history, debts, and assets. Your schedules and statements could contain 50 or more pages, depending on your situation. Our legal team prepares these documents for you based on information we receive from you and other sources.
• Chapter 13 Plan — The Chapter 13 plan is your proposed repayment plan. The document contains the details about how you intend to reorganize your debts. Once the plan is confirmed, you continue paying your bankruptcy payments to the Chapter 13 trustee until the plan is complete.
• Order of Discharge — At the completion of your plan, the court will issue an Order of Discharge. The bankruptcy discharge eliminates your legal liability for the repayment of discharged debts. A creditor is barred from attempting to collect a discharged debt.

Chapter 13 Bankruptcy Courses

• Credit Counseling Course — This is the bankruptcy course you must complete before filing your petition. You can complete the course online in about two hours.
• Debtor Education Course — The debtor education course is the second course you must take when filing a bankruptcy case. If you fail to complete the debtor education course and file the certificate of completion before the end of your case, you will not receive a bankruptcy discharge. It is vital that you complete this course and file your certificate soon after filing so that you do not forget about taking the course. You can also complete this course online in about two hours.

Types of Creditors

There are three basic types of creditors in a bankruptcy case:

• Collateral — Collateral is property that you pledge to secure a debt. Examples would include your home (e. mortgage) or a vehicle (i.e. car loan).
• General Unsecured Creditors— Unsecured creditors do not have collateral for their debts. Examples of unsecured debts include medical bills, credit cards, personal loans, student loans, and utility bills.
• Priority Unsecured Creditors — Priority unsecured creditors do not have collateral, but they are given priority for payment over general unsecured debts. Examples of priority debts include alimony arrearage, taxes owed to a government agency, administrative expenses, child support arrearage, and court-ordered restitution.
• Secured Creditors — Secured creditors hold collateral for the debts, such as a mortgage or a lien on a vehicle. These debts must be paid in full to retain the collateral unless there is an applicable motion that can reduce the amount owed or release the lien on the collateral.

Chapter 13 Motions

Several motions might be filed in your case. Some of the common motions include:

• Motion to Value — In some cases, you can reduce the amount owed on a secured debt to equal the value of the asset used as collateral. To release the lien, you pay the market value of the asset instead of the full amount of the debt. The remaining balance becomes an unsecured debt. You cannot value a first
• Motion to Void Lien — This type of motion is used to strip the lien on household goods pledged as collateral for a loan with a finance company. The amount owed becomes an unsecured debt.
• Motion to Incur Debt — You are not permitted to incur debt during your Chapter 13 case. If you need to incur debt for another vehicle, you must file a motion and obtain court approval before you incur the debt.

Other Terms Used in a Chapter 13 Bankruptcy Case

• Automatic Stay — The Bankruptcy Code provides for an automatic stay that goes into effect upon the filing of the Chapter 13 bankruptcy petition and remains in effect throughout the case unless modified by the court. The automatic stay prohibits creditors from taking certain actions, including debt collection efforts.
• 341 First Meeting of Creditors — This hearing is a short hearing conducted by the Chapter 13 trustee at the beginning of your case. The trustee asks questions about your finances, and your creditors can appear to ask questions. However, creditors very seldom appear to ask questions.
• Confirmation Hearing — The confirmation hearing is held to determine if the court will approve your proposed Chapter 13 plan. You may or may not be required to attend this hearing.