What the National Chapter 13 Updates Mean for You

For years, lawmakers have been trying to implement better standards for Chapter 13 bankruptcy plans that ensure the process is consistent throughout the country. The goal was to make the filing process simpler and more consistent.

On December 1, 2017, that effort finally went into effect, but many believe it failed to achieve its stated goals.

Chapter 13 bankruptcy, often considered appropriate for those who are struggling financially, but who have consistent wages, as well as assets they want to protect, allows filers to create a repayment plan based on their current financial situation. This repayment plan makes it possible to pay toward debts in a controlled manner and in return, get to keep your home and other assets.

Under the new plan, certain creditors will have less time to file proof of claims – something that could benefit those filing. There are also new forms that must be submitted to the court, including one that pertains to the repayment plan. The new form is designed to provide uniformity and ease of transparency.

The new plan also makes it easier for creditors, judges, and attorneys to make sure the various elements of a particular bankruptcy agreement comply with federal law. As of December 1st, when the new guidelines went into effect, everyone filing must either use Bankruptcy Form 113 or their state’s adapted version of the national 113 form. Bankruptcy courts have been updating the electronic filing system and bankruptcy attorneys across throughout the country have received notification of the updates.

In addition to the more consistent version of the form, the new guidelines also reduce the days creditors have to submit proof of claim in certain cases by 20, from 90 days to 70. This new deadline affects Chapter 7 bankruptcies, as well as Chapter 13, and Chapter 12, too.

If you’d like to view a detailed version of the new guidelines, you can visit the US Courts website.

Have the Changes Really Made Filing for Bankruptcy Easier?

Despite the intention of simplifying things, many view the new national plan as longer and more complex than the previous plan. Bankruptcy attorneys also expect it will increase how long it takes to prepare Chapter 13 bankruptcy filings, as well as the time it takes to ensure clients understand the process to which they are committing.

Creditors have also expressed concerns about the new guidelines. But those in support of the updates believe uniform deadlines for proof of claims, and notices and objections, as well as consistent plan content, should create a level of predictability and allow creditors to be more efficient when process bankruptcy cases.

If you have questions about the national updates to the Chapter 13 bankruptcy process or you are considering filing and you’re wondering how these latest updates could affect you, we can help. Contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).