How to File for Chapter 13 Bankruptcy

What's On This Page

This page outlines the most common forms necessary to file personal bankruptcy under chapter 13. You will find outlines and some tips at each step, as well as example forms for most of the required paperwork for your reference.

If you are unable to file for chapter 7 due to a high income, or you chose chapter 13 bankruptcy due to the many benefits over chapter 7, then you should know that chapter 13 is much more complex than a typical chapter 7 case.

The documents required for a chapter 13 petition are almost identical to a chapter 7 case, with the exception of the debtors statement of intentions, which is required only for chapter 7.

While much of the paperwork is the same, the repayment plan and laws providing foreclosure defense are complicated to perform without an experienced bankruptcy attorney.

Below you will find the general steps, as well as some tips for creating the repayment plan, but you are highly advised to hire a bankruptcy lawyer to represent you in your case.

1. The Bankruptcy Petition

The bankruptcy petition, form B-1 to the right, consists of three pages where you will enter basic information such as address, type of bankruptcy, joint filer and filing fee option.

Completing the Petition

Most of the petition is self explanatory, but here is some information for some of the individual questions.

Court District. If you complete the form on a computer (as you should), the top of the form will have a drop down menu from which you can select the judicial district in which your case will be heard. (See also what to expect in a chapter 13 confirmation hearing).

Type of Debtor. As a personal filer, you should select "individual", even if you are self employed or operate a sole proprietorship. (See more on filing chapter 13 as a small sole proprietorship).

Nature of Debts. For most people, the majority of debts will be of the consumer type. However, if you have become indebted by a small business, choose the business debts box. If it is an equal combination of both, select business debts.

Statistical/Administrative Information. In this section you will need to estimate whether, after any exempt funds, you will have any remaining to repay unsecured claims. If you are not sure, you can come back to this question after completing Schedules A, B and C in which you will outline all of your personal property, as well as property claimed to be exempt.

Prior Bankruptcy Cases Filed within Last Eight Years. If you, or a joint filing spouse, have not filed bankruptcy in the last eight years, type None or N/A in the first box. If you have filed for chapter 7 bankruptcy in the last eights years, you may still file for chapter 13.

Exhibit A. Leave Blank.

Exhibit B. This is only for your attorney, if you choose to hire one to represent you in your bankruptcy case.

Exhibit C. Check this only if you have some dangerous property such as toxins stored in a backyard or an anti-aircraft missile.

Exhibit D. This is an attachment that says you have completed the required pre-bankruptcy counseling, or will be.

Certification by Debtor Who Resides as a Tenant of Residential Property. If you have been issued an eviction order prior to filing bankruptcy, the automatic stay may not stop the eviction. However, if you file before a eviction notice is filed, you may serve your landlord a certification which protects you from eviction.

Once the petition has been prepared, and you've completed the required schedule D indicating that the bankruptcy counseling requirement has been met, continue to the list of required schedules where you will record and submit all property, assets, liabilities and exemptions.

2. Schedule A: Real Property

Schedule A is where you will list all real property which you and/or a joint filing spouse owns. Even if you do not own any real estate, you are still required to complete the top portion of this form and submit it along with the rest of the bankruptcy paperwork.

What's Considered Real Property

Real property is generally any piece of land or real estate that you own. This can be a primary residence, rental property, business property, vacation property(ies) unused land or any other type of real estate.

What About Exempt Property?

If you own exempt land, you will list that in further documents, but you must still include in this schedule of real property, otherwise your petition will not be complete and the case may be dismissed.

Nature of Debtors Interest in Property. For the vast majority of people, this will be "Fee Simple" which means you own the property. Even if you have a loan against the property, you are still the title holder and owner. Other common types of interests are as follows:

Future Interest: A future interest means you will have the right to the property in the future. For example, if some real estate will be transferred to you though a deed of trust or other inheritance, you should list that property on Schedule A and indicate it is a future interest.

Lien Holder: If you have a lien on third party property, it must be listed.

Easement Holder: If you have been granted an easement on third party property you must list it.

Current Value of Debtors Interest in Property. The value of your interest in the property is it's fair market value. Do not count real property exemptions here.

Amount of Secured Claim. This is the amount owed a lender on the property. When this amount is larger than the debtors interest, the debtor is said to be "upside-down".

3. Schedule B: Personal Property

In schedule B, you must list out all personal property of value that is not real estate. This includes cash, insurance policies, stocks, bonds, annuities, retirement accounts like a 401k or IRA, cars, musical instruments, card or coin collections, and any other assets of value.

List Everything

Be thorough in your list and do not leave anything out. Even if you think something is worthless, list it and inform the court of your opinion of it's lack of value in the description. If you are unsure about any property, always list it. You will not be penalized for listing too much.

Use the Property's Replacement Value

When determining the value of your property in schedule B, use the property's replacement value. That is, the amount of money it would cost to purchase the property in it's current condition. If you've got a 2007 Chevy Truck, use the Kelly Blue Book amount, not what you paid for it.

4. Schedule C: Property Claimed as Exempt

Schedule C is where you will list all assets and property that you claim would be exempt had you filed chapter 7 case. In a chapter 13, you will keep all property, regardless of exemptions.

What are Exemptions Used for in a Chapter 13 Case?

In a chapter 13 case, exemptions are used to ensure the repayment plan complies with a legal requirement known as the “best interest of creditors test”.

This test must show that every creditor will get at least as much as it would have received had you filed a chapter 7 case.

For example: Suppose in your chapter 7 case, a creditor with a claim against a non-exempt vehicle would have received the market value of the vehicle if the trustee would have seized the property and liquidated it.

In your chapter 13 case, your repayment plan would include total payments less a reasonable interest that sum to the total of the market value of the vehicle.

Federal vs. State Exemptions

If you live in a state that allows federal exemptions to be used, and the federal exemptions are preferable to your states', you can elect to use the federal exemptions. At the top of the page, select the preferable legal code under "Debtor claims the exemptions to which debtor is entitled under".

5. Schedule D: Creditors Holding Secured Claims

Unsecured claims are those for which creditors have some type of property "securing" the debt. Common examples are car loans and home loans.

Nature of Lien

All secured claims are subject to a lien on the property "securing" the debt. The most common types of liens are as follows:

Mortgage or First Mortgage. This is the loan taken out to purchase your home.

Purchase-Money Security. This type of lien secures a debt for which the loan was taken out (other than home loans. A common example would be your car loan.

Purchase-Money Security. This type of lien secures a debt for which the loan was taken out (other than home loans. A common example would be your car loan.

Nonpossessory, Nonpurchase-Money Security. This loan is secured by property other than that for which the loan was taken. A common example would be a home equity loan. The loan is secured by your house, but used for a different purchase.

Tax Lien. If a lien was placed against your property for unpaid taxes, record it as a tax lien.

Mechanics Lien. If a contractor or car mechanic performed work for which you could not pay, they may often place a mechanics lien on your property.

Judgment Lien. If you have a court ordered judgment against you, and the court ordered a lien on your home, you would indicate it as a judgment lien.

Value

For value, you should put the same amount as you did for market value in schedules A and B.

Contingent, Unliquidated or Disputed

Contingent. Contingent loans mean you will owe money only if something happens. For example, if you are the co-signer on a third party loan you will be liable for the debt only if the third party defaults on payment.

Unliquidated. Unliquidated means you are expecting a debt but are unsure of the amount.

Disputed. If you and a creditor are disputing a claim, or the amount of a claim, then mark the "disputed" column next to the claim.

Amount of Claim

Amount of claim is essentially the amount of money you owe the creditor. You should be able to get this number from the most recent statement sent to you. It should reflect the amount of money you would need to pay now to fulfill your obligation and eliminate the claim.

Unsecured Portion

The unsecured portion is essentially the amount of money you would still owe if you sold the property and gave the proceeds to your creditor. The most common example is your car note. Because automobiles depreciate so fast, it is not uncommon to owe more than the car is worth. If you owe $20,000 on a car worth $18,000, then $2,000 of the claim would be unsecured.

6. Schedule E: Creditors Holding Unsecured Priority Claims

In some specific cases, unsecured creditors may have priority over others, meaning if there is any available disposable income to repay unsecured debts, these will be paid first.

The first two pages of Schedule E outline the types of priority creditors. The third page can be used several times, once to list out all of one type of priority creditor.

Types of Priority Unsecured Debts

Some of the most common priority debts listed in Schedule E are as follows:

Domestic Support Obligations. These include both child support and spousal support.

Taxes and Certain Other Debts Owed the Government. Unpaid taxes (for which no lien has been placed securing the debt) will be among the first paid out.

Wages, Salaries and Commissions. For small business owners declaring bankruptcy, any unpaid employee compensation will be a priority unsecured debt.

Amounts to Fill In

Amount of Claim. This is the total amount owed this priority creditor.

Amount Entitled to Priority. Some priority claims are capped as listed in the first two pages of Schedule D. If the amount owed is greater than a listed cap, you would put the cap here. An example would be wages owed an employee. If you owe an employee $12,000 in wages, you would put the cap of $10,950 under the Amount Entitled to Priority.

Amount Not Entitled to Priority. For any priority unsecured debt larger than the cap, the difference would go in this column. From our employee wages example above, the difference between $12,000 and the $10,950 cap of $1,050 would go in this column.

7. Schedule F: Creditors Holding Unsecured Non-Priority Claims

Non-Priority Unsecured Claims are those remaining from Schedule E, and are typically made up of credit card company claims, medical bills not covered by insurance, personal loans, services rendered but unpaid and any other debts you haven't already listed in Schedules D and E.

Make Sure You List All Remaining Debts

It is important to list all the debts you owe, even if you want to repay them. Any debts not listed may end up causing you real trouble if the bankruptcy trustee finds out. Even if it's a small amount which you intend to repay, it can be held against you as preferential treatment and may end up costing you your case.

Debts from Repossessions or Foreclosure

After a foreclosure or repossession has occurred, some secured debt may become unsecured debt in the form of a deficiency judgment. If you have any deficiency judgments you should list them here as unsecured debts. In most cases, chapter 13 bankruptcy will eliminate these debts along with credit cards, medical expenses and the other unsecured debts, provided your claimed income does not warrant repayment.

8. Schedule G: Executory Contracts and Unexpired Leases

Executory contracts and unexpired leases are those contract into which you and a lender have entered and to which both parties are still obligated.

Common Examples of Executory Contracts and Unexpired Leases

Some common examples that might end up in Schedule G are as follows:

• A Car Lease
• Timeshares
• An Apartment or Other Residential Lease
• Insurance Contracts
• Leases of Business Equipment
• Leases of Personal Property

What Happens to These Debts?

Depending on whether you wish to keep the property or not, you may or may not elect to include the debts in your repayment plan. Should you choose you cannot afford to make the lease payments after bankruptcy, the debt may be eliminated and the property surrendered to the creditor. The good news is that you will generally have complete access to the property during the bankruptcy process.

This means if you leased a car, you are free to drive it during the bankruptcy without making any payments and the creditor is legally barred from trying to repossess it. Once the bankruptcy process is completed, you will have begin making payments as per your repayment plan.

9. Schedule H: Codebtors

This schedule of the bankruptcy petition is designed to expose any codebtors which may become liable for debts which are discharged by your bankruptcy. Even though you should have listed any codebtors in Schedules D, E and F, you must still list them here.

Protecting Codebtors

If you have family or friends that you would like to protect from having to repay your debts, you should talk to a bankruptcy lawyer. The legal strategies for protecting co-signers are beyond the scope of this guide.

10. Schedule I: Current Income of Individual Debtor

Schedule I outlines your monthly gross income to determine how much disposable income will be available for your repayment plan, once compared to your monthly expenditures (Schedule J).

Be as accurate and complete as possible, especially with regards to irregular, or expected income.

Completing Schedule I

This form is fairly straightforward, but be sure to list all income being earned on a regular basis. If you have some form of irregular income, and can reasonably expect to get it in the coming months, make sure you note that at the bottom of the form in the space provided.

11. Schedule J: Current Expenditures of Individual Debtor

When you file for individual bankruptcy, you must still list out your complete household expenditures, even if you’re married and filing alone.

The Effect of Your Disposable Income

The more disposable income you have, the more you will be required to pay monthly per your repayment plan.

Remember, if your disposable income is insufficient to repay unsecured creditors after secured and priority unsecured debtors, then you will be able to discharge these debts and lower your monthly payments. However tempting, do not overstate expenditures in an effort to get out of paying unsecured creditors. This is bankruptcy fraud, and the trustee and court will likely find out, dismiss your case and potentially penalize you.

12. Summary of Schedules

Now that schedules A through J are complete, you must summarize all the totals from all schedules to come up with a picture of your debts versus assets. This gives the court and trustee a snapshot of your financial situation.

13. Statistical Summary of Certain Liabilities and Related Data

This form is fairly straightforward, and requires you to fill in the blanks using the schedules you’ve completed thus far.

Current Monthly Income

You will need to complete form 22A (in a later step) in order to get the current monthly income number that is used on this form. It will likely be different from the monthly income number on schedule I.

14. Declaration Concerning Debtors Schedules

You will need to swear under penalty of perjury that you have completed all schedules and related paperwork honestly, accurately and truthfully to the best of your abilities. If you choose to represent yourself in your bankruptcy case, you cannot use ignorance as a defense.

The bankruptcy court may assume that debtors are abusing the bankruptcy system to avoid financial liability, and any errors or mistakes may be viewed as an attempt to deceive the court and grounds for dismissal.

15. Statement of Financial Affairs

The statement of financial affairs is where you will outline all of your recent payments, or transactions, in order for the bankruptcy trustee to identify and act on any potentially preferential or voidable transfers.

These two terms essentially mean that, under certain circumstances, the bankruptcy trustee can force a creditor that you have recently paid (usually over $600) to give the money back in order to repay other creditors.

What to Include

This is an important part of your bankruptcy petition, and you must fill out this form as completely as possible. Any eligible payments not included may be considered an act of deceit on your part, and may be grounds for a dismissal. You should include all payments of $600 or over made to creditor within the 90 days prior to submitting your bankruptcy petition.

16. Statement of Current Monthly Income and the Means Test Calculation

Form 22A is where you will calculate your monthly income again, only differently from Schedule I. You will use the monthly income figure here to determine the dollar amount you left blank in step 13.

17. Notice to Individual Consumer Debtor Under § 342(b)

This notice is a new addition as part of the 2005 Bankruptcy Abuse and Consumer Protection Act.

It is essential a warning from the court about the seriousness of a bankruptcy petition and the importance of completing all paperwork honestly. You are warned about the consequences of fraud or an attempt to abuse the US Bankruptcy protection laws.

18. Creating Your Repayment Plan

The repayment plan should be designed in such a way as to repay all secured debts, then unsecured priority debts, and lastly non-priority unsecured debts. The time frame is usually between three and five years. When creating your repayment plan, there are a few things to consider:

1. Secured Creditors Must Receive at Least the Market Value of the Property

Repayment of secured creditors, such as cars and other secured debts, must include payments sufficient that they be compensated for the market value of the property. This law is in place to ensure these creditors would receive at least as much money as they would have in a chapter 7 case.

This is a legal concept called “best interest of creditors test”.

Those creditors who are owed more than the property is worth are “partially secured”. The amount of debt exceeding the market value of the property is said to be the unsecured portion, and in some cases, may be eliminated from repayment.

This concept is called a “cram down”, and offers debtors a way to reduce principle while still passing the best interest of creditors test. (Learn more on the Cramdown Provision in Chapter 13 Bankruptcy).

2. Unsecured Debts

If your disposable income allows it, unsecured creditors must also be repaid. Depending on the amount of disposable income remaining after considering secured debts and priority unsecured debts, your unsecured creditors should be repaid roughly equally.

As an example, if the remaining monthly disposable income is $200, and you have two credit cards with payment requiring $300 monthly over the length of your plan, both should get $100, which effectively eliminates 66% of this unsecured debts through the bankruptcy discharge.

19. Filing Your Petition

Triple check every form and schedule to ensure no mistakes were made and that you and any joint filer properly signed and dated everywhere that is necessary.

Mailing Matrix

You will need to contact the local court for the proper format required for the mailing matrix. This is a list of all your creditors, given to the court so that they can notify them of the petition for bankruptcy protection and put into effect the automatic stay.

Send the Petition

Once you’ve checked and triple checked all the required forms, and are sure you’ve done everything accurately, place all the forms in order in a 9" by 12" envelope along with a check for the filing fee and send to the appropriate address. You should contact your local court to get the correct address and recipient or department.

What Happens Next?

Once your petition has been filed with the court, your creditors will be notified and barred from making any attempts to collect debt or repossess and property. Additionally, any foreclosure proceedings will be halted pending the completion of your case.

Within a few weeks of filing, you will receive a letter from the court with a date to appear and further instructions. See the following links for more on what to expect:

1. Getting Ready for the 341 Meeting
2. Questions at the Meeting of the Creditors

Go Back to Filing for Personal Bankruptcy