Chapter 13 bankruptcy can help you, as a debtor, prevent home foreclosure, make up missed car or mortgage payments, and pay back taxes. It can also stop the interest from accruing on your tax debts -- including local, state and federal taxes -- while allowing you to keep certain valuable property. Bankruptcy is governed by federal laws, but certain aspects are unique to New Hampshire. For example, New Hampshire residents must file their bankruptcy cases in the U.S. Bankruptcy Court for the District of New Hampshire, located in Manchester.
Chapter 13 Bankruptcy
Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy requires you to repay some or all of your debts under the terms of a court-ordered repayment plan. The length of the repayment plan is three to five years and depends on whether your income, after adjustments, is more or less than your state’s median income. In New Hampshire, as of 2013, the median income is $51,522 for one earner and increases with your family’s size. You must have a reliable income to file for Chapter 13 bankruptcy.
To bring a Chapter 13 case in New Hampshire, you must file a bankruptcy petition in the U.S. Bankruptcy Court in Manchester, along with other forms, including an income schedule and proposed repayment plan. If your repayment plan is approved by the court, you will pay a portion of your income to the court-appointed bankruptcy trustee who redistributes those funds to your creditors. If you undergo the required credit counseling and successfully complete your repayment plan, the court can discharge, or erase, some or all of your remaining unpaid debts. Your trustee monitors your repayment progress throughout the bankruptcy case and makes recommendations to the court as necessary.
Chapter 13 Exemptions
The bankruptcy court cannot approve a plan that does not provide sufficient repayments to your creditors. In part, statutory bankruptcy exemptions determine how much you will have to pay to certain creditors under your repayment plan. If you have lived in New Hampshire for at least two years, state law allows you to choose between the state’s list of exemptions and those provided by federal bankruptcy laws; New Hampshire exemptions tend to be more generous than the federal exemptions. For example, New Hampshire allows you to exempt $100,000 of equity in your home while federal law allows an exemption of only $15,000. However, federal law allows you to exempt jewelry up to $1,000 in value whereas New Hampshire allows only $500 for a jewelry exemption. You must use either the state or federal exemption plan -- you cannot pick and choose individual items from both lists.
Chapter 13 procedures require you to attend a creditors’ meeting, or 341 meeting, shortly after you file your case. You must bring a copy of the bankruptcy petition and other paperwork for your trustee to this meeting. The 341 meeting is usually held at the federal courthouse and you are placed under oath, but no judge is present. Your creditors have the right to come to the meeting and question you, but are not required to do so and rarely attend. Instead, your trustee questions you about your assets and financial situation.