What Should You Not Do During Chapter 13?

Filing for Chapter 13 bankruptcy can be a daunting process. There are many details that go into the process that can leave someone feeling confused, with plenty of questions. How does one start the process? What are the important things you should do? And, just as crucial, what should you not do during Chapter 13?

What To Avoid During a Chapter 13 Bankruptcy Case

Many people, not only in the Dallas-Fort Worth area, but also in the greater United States, are facing personal bankruptcy. A report in February showed that all bankruptcies rose by 14.2% in 2024, with 494,201 of those being personal. In this surge of filings, there are several key things for people in the midst of a Chapter 13 case to keep in mind. The following are just a few examples of things you should not do during your Chapter 13 bankruptcy process:

• Miss payments. This is one of the main things to keep in mind after a payment plan has been set up. Missing one or two payments can lead to consequences and have your case dismissed in court. This can open you up to trouble and allow your creditors to continue their collection efforts. Setting up automatic payments can be a good plan to avoid such issues.
• Take out additional loans. During Chapter 13, you are required to get court approval for any loans or credit. Something simple like signing up for a new credit card can seriously complicate your case and have it dismissed. Speak with your bankruptcy lawyer before even considering any more loans.
• Sell or move assets. It can be tempting to try to sell or move your property in order to repay your debt. However, if done without authorization from the courts and your trustee, it can be seen as trying to commit fraud. It is wise to avoid selling any large assets without permission or court approval.
• Hide information. Some individuals facing Chapter 13 bankruptcy may try to conceal some of their assets from their creditors and the courts. However, bankruptcy laws are strict about such actions. The official term for this action is bankruptcy fraud, and it can carry with it serious penalties.If the courts find that you have committed bankruptcy fraud, you may be facing years in prison, fines in the hundreds of thousands, and a dismissal of your Chapter 13 bankruptcy case. Clear communication and honesty are required in this process.

In general, open and honest communication with your attorney, your trustee, and the court system will be the optimal way to avoid any major mistakes.

Hire a Bankruptcy Lawyer

Being aware of these mistakes can help protect you from making your own errors. However, even an innocent slip-up can lead to severe consequences. That is why it is crucial to hire a dedicated and skilled bankruptcy lawyer who can work with you and help you navigate the bankruptcy process so you can successfully resolve your case.

An experienced Arlington Chapter 13 bankruptcy lawyer can not only help you avoid critical errors and serious consequences, but they can also help determine if you qualify for Chapter 13 bankruptcy, and whether or not this is the right path for your circumstances. Your lawyer might even be able to help you retain certain assets. They can also take over communications with creditors and protect your rights.

FAQs

Q: What Is the Average Chapter 13 Monthly Payment?

A: The nature of Chapter 13 bankruptcy cases means that there is no definitive average. The payments generally will be based on your disposable income, expenses, and debts. An additional factor in establishing your monthly payments is the timeline of your payoff period. Most Chapter 13 bankruptcies range from a 3 to 5-year time period to pay all debts. Speak with a bankruptcy attorney to get an idea of what your payments will look like.

Q: What Would Disqualify You From Chapter 13 in Texas?

A: What may disqualify you is the amount of debt that you owe. The national limits are $526,700 for unsecured debt and $1,580,125 for secured debt. If what you owe exceeds this limit, then Chapter 13 is not an option. Another requirement is a steady income and a clear plan for repayment.

Q: Should You Hide Your Income During Chapter 13?

A: No, you should not hide your income during Chapter 13 bankruptcy. Lying or forging documents during Chapter 13 bankruptcy is called bankruptcy fraud and is a federal crime. If you conceal assets during a bankruptcy case and it is discovered, then you may be charged with up to five years in prison or face fines ranging from tens to hundreds of thousands of dollars.

Q: How Do You Survive During Chapter 13?

A: Repaying your debts will be an uncomfortable time. It is important to pare down on luxuries and focus on trying to maintain a steady payment plan. Missing a payment or trying to get another loan can be disastrous. Preparing for a lean future is a smart choice. It can be difficult, but stopping any unnecessary expenses is important when surviving a Chapter 13 bankruptcy.

Contact Steele Law Firm, PLLC, Today

The Steele Law Firm, PLLC, can help you avoid making dire mistakes. We have years of experience helping the people of the DFW and surrounding area in their bankruptcy journeys. Our founder and owner, Lindsay D. Steele, has dedicated her practice to Texas bankruptcy cases and has been recognized in Fort Worth Magazine as a “top attorney” from 2012-2021. She devotes time and attention to all the details of her clients’ cases, providing honest and open communication.

At Steele Law Firm, PLLC, our compassionate legal team cares about aiding the people in North Texas during their Chapter 13 journey. It can be a stressful process, but we can help you navigate it as smoothly as possible. Contact us today or visit our Fort Worth office—located on Lafayette Avenue, down the street from Dickies Arena and a few blocks off of Camp Bowie Boulevard.