What Is a Notice of Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows you to repay your debts over time.
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If you're being hounded by creditors over unpaid debt but need more time to catch up on your payments, filing Chapter 13 bankruptcy can protect you from further collection actions. Chapter 13 gives you a three- to five-year period to repay your outstanding debts while protecting your assets from seizure. If you file Chapter 13, make sure that your creditors are aware you're claiming bankruptcy by serving them with proper notice.

Issuing the Notice of Chapter 13

Shortly after you file a Chapter 13 bankruptcy petition, the court will appoint a trustee to oversee your case. Once a trustee has been appointed the court will issue a Notice of Chapter 13 to you and to each of the creditors listed in your bankruptcy filing. It's important that you provide the court with a complete list of your creditors along with their correct mailing address to ensure that the notice is received. If a creditor attempts to contact you prior to receiving the notice, you should give him your bankruptcy case number and your trustee's contact information.

What the Notice of Chapter 13 Does

The Notice of Chapter 13 lets your creditors know that you've filed for bankruptcy protection, and provides the date and time of the meeting of creditors. The meeting of creditors is a brief hearing during which the trustee will ask you questions to verify the information contained in your initial bankruptcy petition. Your creditors have the option of attending but aren't required to appear. The notice also informs your creditors of whether or not you've filed your repayment plan. Finally, the notice informs your creditors of what they can and can't do with regard to your bankruptcy filing.

Rights and Responsibilities of Creditors

Once a creditor receives the Notice of Chapter 13, it has a set amount of time in which to exert certain rights. First, the creditor can file a proof of claim which lets it specify how much it believes you owe. If a creditor objects to the inclusion of a specific debt, it can also file a complaint to determine the dischargeability of the debt in question. Finally, the creditor can file an objection to the exclusion of certain assets under state or federal exemption guidelines. It's up to the creditor to file any objections or claims before the deadline specified on the Chapter 13 notice to protect its rights.

What Creditors Can't Do

Once you file your Chapter 13 petition, the bankruptcy court will enforce an automatic stay against all of the creditors included in your filing. The automatic stay effectively prevents any creditor from pursuing collection actions against you after you file bankruptcy. This includes civil lawsuits, wage garnishment or seizure of your bank account. Once your creditors receive the Notice of Chapter 13, they must immediately cease any collection efforts against you. Creditors who violate the automatic stay are subject to penalties. You should notify the trustee immediately of any creditor who engages in prohibited behavior after the stay takes effect.

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