For those of you who have heard that Chapter 13 bankruptcy can be difficult, it’s not too far from the truth. Surviving a Chapter 13 bankruptcy repayment plan over the course of 3-5 years is no small feat and requires an iron-clad will and systematic conscious of your finances at all time. Bankruptcy requires individuals, many who haven’t lived according to a budget, to do just that. Set a long-term budget for all expenses, income, and debt, and stick to the plan while weathering life. It shouldn’t be scary, however, nothing good is ever truly easy to obtain and legally discharging your debt using Chapter 13 bankruptcy protection is no different.
There are a number of things that are highly recommended you avoid during bankruptcy and then there are rules prescribed the US Bankruptcy Code that strictly prohibit while you are making chapter 13 bankruptcy payments in an effort to receive a discharge.
Taking on New Loans
You can’t take on new loans during Chapter 13 bankruptcy without first obtaining the bankruptcy court’s permission. If financing is needed before your Chapter 13 bankruptcy repayment plan is approved you still need to obtain permission from your trustee.
Obtain New Consumer Credit
After filing for Chapter 13 bankruptcy, your are generally prevented from taking on any new consumer credit. If the need is an emergency such as medical events or natural disasters it may be necessary to incur new debt. The most common situation where individuals need to assume new debt during a Chapter 13 bankruptcy that bankruptcy lawyers in Texas see is the need for a new automobile or home repairs.
Notifying your Chapter 13 Bankruptcy Trustee
The process of notifying your Chapter 13 bankruptcy trustee during the course of your repayment plan varies by state, so you’ll want to inquire about this with your Houston bankruptcy attorney. It most likely will involve filing a motion in bankruptcy to incur new debt. In order for the new debt to be authorized the trustee or the bankruptcy court handling your case will typically look at whether the situation was an actual emergency, the amount of the new loan and its impact on your repayment plan, and whether the loan is secured or unsecured.