New Laws For Bankruptcy Chapter 13

After reform, copious new regulations forcibly steer all debtors to bankruptcy Chapter 13 cases. In addition, new plan terms and payments are intentionally engineered to make plans more burdensome as a deterrent to filing. Nevertheless, debtors who seek effective relief and the elimination of debtors will discover most of the previous benefits are still available, as well as new opportunities.

The right of conversion cannot be waived. Each debtor who files bankruptcy Chapter 13 may convert a case at any time, with a legal presumption in support of allowing the conversion. The terms of conversion however require that each debtor is qualified to file under the new chapter. For Converting to Chapter 13 to Chapter 7, the new means testing rule must be satisfied.

Qualifying for bankruptcy chapter 13 plans

All debtors who chose bankruptcy Chapter 13 must maintain a regular income. To determine income, courts look back over the preceding 180 days. Also, for purposes of converting to Chapter 7, in a similar fashion, the means testing requirements considers income earned over the preceding 180 days. Income then, and the lack thereof, are the two pivotal inquires that determine many individual rights.

In the event of job loss, unemployment, or a drop in income below the median income of the state residency, all debtors in existing plans may convert to Chapter 7 and discharge remain debts (according to the rules of dischargeability). A complete discharge eliminates all debts without further payment, and may be accomplished in 125 days, or less.