The procedures followed for successful bankruptcy discharge are dictated by federal law. As such, changes to the law can change the way an individual approaches his or her personal bankruptcy. Recent changes to the Chapter 13 bankruptcy code may provide additional benefits to debtors. Those considering seeking bankruptcy protection should familiarize themselves with these changes, ensuring they are taken advantage of throughout the process.
The changes, which went into effect on December 1st, are numerous. To start, creditors who are seeking to recover a secured claim must file a proof of claim under Chapter 13 bankruptcies. Failure to do so will disallow them from becoming part of a payment plan. Second, creditors must file their proof of claim within 70 days of the bankruptcy filing, which is shorted from 90 days. Debtors are also now allowed to request that judicial liens be removed without pursuing additional legal action outside of the Chapter 13 bankruptcy filing.
But the changes don't end there. Debtors can also now request that a valuation of collateral that is binding without having to file any legal motions outside of the bankruptcy filing. Additionally, creditors are now to be given at least 28 days' notice of a Chapter 13 confirmation hearing. They must file an objection to such a plan at least a calendar week prior to the hearing.
As these changes demonstrate, bankruptcy can be complicated by procedural issues. As mundane as these procedures may seem, abiding by them is of the utmost importance as failing to do so could result in a failed bankruptcy and detrimental financial consequences. So, those who are thinking about filing for bankruptcy need to ensure that they know the law and how to use it to their advantage. Qualified attorneys representing Illinois and Indiana residence are available for further consultation.