Changes Could Be Coming to the Chapter 13 Bankruptcy Process

Florida consumers may not be aware that, for some time now, the U.S. Bankruptcy Court has strived for uniformity in the bankruptcy process. Specifically, the Judicial Conference Advisory Committees on Bankruptcy and Civil Rules have looked at this very issue with regard to the Chapter 13 bankruptcy process. Their discussions could result in a national uniform standard for Chapter 13 plans.

Standardized forms and processes could make the review of plans less difficult for everyone involved. However, other significant changes could present a new set of challenges to creditors. Those proposals may benefit those seeking bankruptcy protection. For instance, filers would be able to request lien avoidance in their Chapter 13 plan. Currently, many jurisdictions require the filer to seek lien avoidance through a separate motion to the court.

Other proposed changes address claims to be filed by secured and unsecured creditors alike. The time frame for filing those claims would be reduced to 60 days from the filing date of the petition. The current time limit is 90 days. Petitions would need to be more timely reviewed by creditors, but this could also identify issues early on and help eliminate problems later.

Chapter 13 filers may also need to better identify their goals with the plan up front since the process may be streamlined. The ultimate goal is to make the process more user-friendly for filers and reduce errors that could cause unnecessary delays in getting a reorganization plan approved. Florida consumers that are contemplating filing a Chapter 13 bankruptcy may benefit from keeping on top of any changes that occur in the process to ensure they receive the maximum benefit from any repayment plan they propose to the court.

Source: akronlegalnews.com, Changes in the works for Chapter 13 bankruptcy filings, Sherry Karabin, Nov. 15, 2013