Bankruptcy plans

New Chapter 13 National Bankruptcy Plan

Chapter 13 bankruptcy is the type of bankruptcy that allows for a reorganization of debts.  Chapter 13 can be a very useful tool to allow a debtor the opportunity to keep a home through bankruptcy even if they are behind on their mortgage payments at the time they file bankruptcy.  Many times this is not possible in a Chapter 7 bankruptcy case.  The basic idea of a Chapter 13 case is that you have regular income and the ability to repay some if not all of your debts through the process.  Over the years, since the introduction of Chapter 13, a number of rules and policies have been enacted to develop a process that allows repayment of debts in a manner that allows a debtor a chance to regain their financial footing and at the same time satisfy financial obligations.

On September 12, 2017, the Judicial Conference approved several amendments to Official Forms that will go into effect on December 1, 2017, including Forms 101, 309F, 309G, 309H, 309I, 425A, 425B, 425C, and 426. Official Form 113 (Chapter 13 Plan).  The new “National Plan” as its being called will be required for all Chapter 13 cases filed in Utah after December 1, 2017.  If you want to take a look at the new forms they are online at the US Court website.

Every few years it seems there are changes to the bankruptcy laws.  This year it is to the way in which Chapter 13 cases are to filed.  The process is changing and only time will tell if the changes are an improvement over the old system.  Here at the Law Office of Douglas Barrett we are withholding judgment on the new system until we see it in action.  As with any change we are sure that there will be a few unintended ramifications to the changes.  Our advice to our clients is if you are contemplating filing a Chapter 13 case in the near future you may want to do it now before the changes go into effect since you will know what you are getting but if you are unable to do so we will be ready to help you navigate the new Chapter 13 plan once it goes into effect.

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