Bankruptcy Rules Change Kinder to Debtors

30 Nov Bankruptcy Rules Change Kinder to Debtors

Debtors in chapter 7 bankruptcy will get a little break with new rules that go into effect December 1, 2010. Individual debtors now have 60 days to file a statement of completion of a course in personal financial management (official form 23).

The clock starts running from the first date set for the meeting of creditors (341 hearing). This is an increase of 15 days, up from the prior 45 day time limit.

The penalty is harsh for failure to satisfy this requirement. Debtors are denied a discharge of their debts if this form is not filed with the Court in time.

Bankruptcy Rule 4004 was amended to provide for the court withholding the discharge if the statement is not filed. Rule 5009 was changed to require the bankruptcy clerk to send debtors a notice of the requirement and the penalty of no discharge for failure to comply.

There is no change in the rules for individuals in chapter 11 or 13 cases, which is no later than the date when the last payment was made by the debtor as required by the plan or the filing of a motion for discharge.

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Jill Michaux has helped Kansas consumers with debt problems for three decades. She and her partner, Mark Neis, are Topeka's only bankruptcy specialists, board certified in consumer bankruptcy law by the American Board of Certification. She help start the National Association of Consumer Bankruptcy Attorneys.

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