If you are considering Chapter 13 bankruptcy in Concord, CA, it helps to see the whole road before you start. A Chapter 13 case moves through clear stages: preparation, filing, the 341 meeting, plan confirmation, three to five years of payments, and finally a discharge. Knowing each step makes the process far less intimidating for homeowners.
To talk through where you are today, call (415) 754-0115 to schedule your free consultation, or send a message through our contact page.
Before filing: the preparation stage
Good preparation shapes everything that follows. Before a Chapter 13 case is filed, several things usually happen.
Credit counseling
Federal law requires you to complete a credit counseling course with an approved provider within the period before filing. You receive a certificate that is filed with the case. Our guide on credit counseling before bankruptcy explains this requirement.
Gathering the documents
Expect to collect recent pay stubs, the last several years of tax returns, mortgage statements, any notices from your lender or trustee, statements for bank and retirement accounts, vehicle loan information, and a list of every debt. If you have a homeowners association, include its statements too.
Choosing exemptions and the plan length
Your attorney will work through the Chapter 13 income calculation, which compares your household income with the California median and helps determine whether the plan runs three or five years. California's two exemption systems are reviewed to decide which one protects your property best.
Filing day and the automatic stay
When the petition is filed with the U.S. Bankruptcy Court for the Northern District of California, the automatic stay generally begins right away. Foreclosure activity, wage garnishments, lawsuits and collection calls are generally required to stop. For Concord homeowners facing a notice of default or trustee's sale, this is often the most important moment in the case.
Within a short time after filing, the trustee and creditors receive notice of the case. The plan must be filed with the petition or soon afterward, and plan payments to the Chapter 13 trustee typically begin within about a month of filing, before the plan is confirmed.
The 341 meeting of creditors
A few weeks after filing, you attend the meeting of creditors, named after section 341 of the Bankruptcy Code. The Chapter 13 trustee asks questions under oath about your income, expenses, property and the plan. Creditors may attend, though often they do not. Our article on what happens at the 341 meeting describes the meeting step by step.
Plan confirmation in Chapter 13 bankruptcy in Concord, CA
Confirmation is the court's approval of the plan. Before the confirmation hearing, the trustee reviews the plan and may raise objections. Lenders also file proofs of claim, including the amount of any mortgage arrears. If the plan and the claims do not match, the plan may need to be amended.
What the court checks
- The plan is proposed in good faith and is feasible on your income.
- Unsecured creditors receive at least what they would in a Chapter 7 case.
- Priority debts, such as certain taxes, are provided for as required.
- If the trustee or an unsecured creditor objects, the plan commits all projected disposable income for the applicable commitment period.
The Somal Law Firm, led by attorney Bob Somal in Pleasanton, handles Chapter 13 bankruptcy and foreclosure defense for homeowners in Concord and throughout Contra Costa and Alameda Counties. Guiding a plan through objections and confirmation is a central part of that work.
Life during the plan
Once confirmed, the plan sets the routine for the next three to five years. You make your plan payment to the trustee and keep current on ongoing mortgage payments. The trustee distributes money to creditors according to the plan, including the mortgage arrears.
Some practical points during this stage:
- Payment changes. Your servicer must give notice of changes to escrow or interest-rate adjustments. Keep those notices.
- Taking on new debt. Larger new credit, such as a car loan, generally requires trustee or court approval.
- Tax returns. Trustees commonly require copies of annual returns during the plan.
- Changes in income. A job loss or new job may justify a plan modification. See our guide to Chapter 13 plan modification.
Completing the plan and receiving a discharge
After the final plan payment, you complete a required financial management course and file the necessary certifications. The court then enters the Chapter 13 discharge, which generally releases the remaining balance on eligible unsecured debts that were provided for in the plan. Toward the end of the case, the trustee may file a notice about whether the mortgage arrears have been cured, and the lender has an opportunity to respond. That step helps confirm the loan is current as you leave bankruptcy.
Your mortgage continues after the discharge as a regular loan. The goal is to finish the plan with the house still yours and the default behind you. An attorney can review your situation and explain how each stage would apply to your circumstances.
Frequently asked questions
How soon after filing does the stay protect my Concord home?
The automatic stay generally takes effect when the petition is filed, although prior dismissed cases can limit it.
Do I make payments before my plan is confirmed?
Yes. Plan payments to the trustee usually begin within about a month of filing, even before the confirmation hearing.
What if I miss a plan payment?
Missing payments can lead the trustee to seek dismissal. If your circumstances change, raising it early allows time to consider a modification.
Is the court hearing held in Concord?
Contra Costa County cases are handled by the U.S. Bankruptcy Court for the Northern District of California, and are generally assigned to its Oakland division. Many 341 meetings are now held by video or phone, and your attorney will explain where and how each hearing or meeting takes place.
If you live in Concord and want a clear picture of how Chapter 13 could help you keep your home, call (415) 754-0115 to schedule your free consultation with The Somal Law Firm. You can also reach us through the contact page. We will walk through each stage with you and explain what the first steps would look like.
Attorney Advertising. This article is general legal information for Bay Area residents, not legal advice, and does not create an attorney–client relationship. Every situation is different — please consult a licensed attorney about your specific circumstances.