Chapter 13 Bankruptcy Rules in Oregon

• If mounting debt has become a problem, filing for Chapter 13 bankruptcy may be a solution.heap of the american money image by Maksim Pasko from Fotolia.com
  
  Chapter 13 bankruptcies give debtors with regular incomes the ability to repay all or part of their debts over a three- to five-year period. Individuals filing for Chapter 13 in Oregon are asked to propose a plan for making installment payments to creditors, during which time no creditors can start or continue collection attempts. The primary advantage of filing for Chapter 13 bankruptcy is that it offers the debtor a way to keep his house and stop foreclosure proceedings. Chapter 13 also allows the debtor to reschedule and extend secured debts and to consolidate all loan payments to a specified trustee, thereby keeping creditors at bay.
  
  

Petition and Bankruptcy Forms

• Chapter 13 proceedings begin with the debtor filing a petition with the local bankruptcy court. The debtor must also file a complete statement of her financial affairs, including income, assets, tax returns, debts and any other contractual financial obligations. The debtor is also required to attend credit counseling classes and file a certificate of course completion. After all applicable forms are filed, an impartial trustee is appointed to oversee the case.
  
  

Repayment Plan

• The debtor must submit a repayment plan to the court for approval. The plan must detail fixed amount payments that will be paid to the trustee on a regular basis. The trustee, in turn, will pay creditors according to terms outlined in the plan. Creditors will have already provided claims which are ranked as priority, secured and unsecured. Priority claims such as taxes and the cost of court proceedings will be paid first. Secured claims refer to those creditors who have the right to take back property if the debt is not repaid. Unsecured claim creditors have no special rights to collect assets owned by the debtor, and usually do not have to be repaid in full. The debtor must begin making payments to the trustee within 30 days of filing the proper documents, even if the plan has not yet been approved. The bankruptcy judge will then hold a confirmation hearing and decide whether the plan is acceptable. Creditors will receive notice of the hearing and may object to confirmation. If the court accepts the plan, the trustee will begin distributing funds to creditors. If the court rejects the plan, the debtor must file a new plan or move on to Chapter 7 liquidation proceedings.
  
  

Discharge

• A Chapter 13 case is discharged when all planned payments have been made. Other stipulations outlined in the U.S. Bankruptcy Code require debtors to certify that all domestic support obligations have been paid in full, that they have not received a discharge in a prior bankruptcy case filed within a given time frame and that they have completed a court-approved course on financial management. The discharge releases the debtor from all debts outlined by the repayment plan. Creditors provided for under the plan may no longer initiate or continue any action, legal or otherwise, against the debtor to collect the discharged debts.