Chapter 13 Bankruptcy and Local Custom

11 Mar Chapter 13 Bankruptcy and Local Custom

A Chapter 13 Bankruptcy is governed by Title 11 of the United States Code. The Code lays out the actual laws for filing, confirming and maintaining a Chapter 13 bankruptcy.

But the actual practice involves more local custom than anything else. The specific plan, process and even discharge can vary greatly from district to district.

First, some districts have Bankruptcy Administrators and some have U.S. Trustees that oversee the process.

Second, many districts have adopted form plans to use. Those plans can have different provisions all within the structure of the bankruptcy code. For example, in my district, the Eastern District of California, if a debtor is behind in his mortgage payment, the form plan requires the debtor to make the regular house payments through the plan along with the arrears.

Over the hill in the Northern District of California, the plan requires no such thing and a debtor is free to make the house payment directly to the mortgage company while paying the arrears through the Chapter 13 plan.

Third, some districts require the debtor to set a confirmation hearing to have the plan approved by the court. In other places, the confirmation hearing is set by the court and concluded without the necessity of an appearance by the debtor unless the Trustee has objected to the plan.

Fourth, during plan administration, the required record keeping and reporting by the debtor to the trustee can differ; as can the procedure for requesting permission to incur new debt (when a new car is bought, for example).

And finally, when it’s time to wrap up the Chapter 13 Bankruptcy, the discharge process varies. Some districts require the debtor to file a motion for discharge, whereas in some areas, the discharge is almost automatic and the Trustee does the paperwork.

The bottom line: find a local attorney knowledgeable in the practices in your district before filing a Chapter 13 Bankruptcy.



image credit: iBjorn

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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