Chapter 13 Bankruptcy and Local Custom

by Douglas Jacobs,

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.

For more information on these matters, please call our office at 305
548 5020, option 1.

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