Chapter 13 has new deadlines and streamlined process

Florida consumers who are planning to file for Chapter 13 bankruptcy have some procedural changes to consider. They became effective on Dec. 1, 2017, and they mostly apply to deadlines for paperwork from creditors. Some updates, however, enable a smoother process for debtors because they will not need to file separate motions for the valuation of collateral or a declaration that secured debts have been satisfied.

Under the new rules, creditors have only 70 days from the date that the petition was filed to file their proofs of claim. Although failing to file a claim would not erase a creditor’s lien, the bankruptcy payment plan might not direct funds toward the claim. Creditors with liens on people’s primary residences receive an extra 50 days to send in a deed of trust, promissory note or other documentation showing their financial claim upon a property.

Debtors could benefit from the ability to ask for a binding valuation of collateral as part of a Chapter 13 plan. This action used to require a separate procedure. At the end of a bankruptcy case, debtors may also now seek an order that declares secured debts to be satisfied. Additionally, requests to end judicial liens while completing the bankruptcy plan may be included without the need to prepare a separate motion.

Because the individual circumstances of each debtor varies, a person might want the support of a lawyer when filing a Chapter 13 bankruptcy petition. The key to this chapter is the preparation of a proposed repayment plan and its approval by the court, and an experienced lawyer can describe what elements are necessary.