Form rule for Chapter 13 bankruptcy
Florida residents who are considering filing for Chapter 13 bankruptcy to resolve their debts may be interested to know about a new bankruptcy rule. The United States Bankruptcy Court for the Southern District of Illinois has added Rule 3015.1 to bankruptcy procedure. Beginning December 2017, districts will be required to use a national form for Chapter 13 plans unless they already have a process that adheres to the requirements of the new rule.
Chapter 13 bankruptcy allows individuals who have a reliable source of income to create a plan to repay all or a portion of their debt. The debtors have to provide a three-to-five year plan to make installment payments to their creditors. The main advantage of going through a Chapter 13 bankruptcy is that it stops foreclosure proceedings and can potentially resolve delinquent mortgage payments, allowing debtors to retain their home.
Rule 3015.1 requires districts to adhere to multiple minimum requirements. A district is allowed to use only one form forChapter 13 bankruptcy. The form must have an opening paragraph that contains a clause that either refers to the limits to the amount of a secured claim based on the estimation of the collateral or suggests a method of avoiding a lien.
The form should be in compliance with several formatting and disclosure rules. This includes numbering paragraphs, using bold type for labeling and using separate paragraphs when discussing the surrender of the asset used to secure a claim, the cure and maintenance of home mortgages, the treatment of secured claims and the payment of domestic support obligations.
While this is merely procedural, the fact remains that Chapter 13 bankruptcy can be a highly-effective form of debt relief. There are several eligibility and other requirements, however, that an lawyer can outline.