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My sister filed chapter 7 about 4 years ago and is now in trouble again. She said an attorney told her she could now file chapter 13. Does anyone know if this is right?
Optional Information: State/Country relating to question: Idaho
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
A chapter 13 bankruptcy can be filed after 4 years of the chapter 7 bankruptcy case, a chapter 13 is a pyment plan bankruptcy, where the debtor has to make some payment to the creditors over a 5 year payment plan, so the law does allow a chapter 13 to be filed if a chapter 7 debtor is in trouble again.
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Thank you for the quick response! I do have another question - she also mentioned the court will monitor her income and expenses after she files chapter 13. Is that right? She has disabled children at home and we as her family are also concerned for their well-being. We don't have any experience in this area. Her only income is the state money provided for the care of the children, so would this income now be monitored, and if so, are they generally diligent about it?
Since this is a payment plan bankruptcy, every month she has to make payments to her creditor, and if she missed one month, the Court could dismiss her bankruptcy.
In terms of income the Court or Trustee would not monitor it, however, she would have to notify the trustee of any increase in income, or decrease.
Basically, the Court will only approve a chapter 13, if her monthly income is more then her monthly expenses, if that is the case, she would qualify. If not a chapter 13 will not be allowed.
So the Trustee will ask for verification of all her monthly expenses, and income to make sure she can actually complete the payment plan, so she should have all her monthly bills to prove exactly what her monthly expenses are.
Experience: 10 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS