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.
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 itâ€™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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