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Milwaukee, WI Bankruptcy Law Blog

Monday, January 29, 2018

New Year, New Forms

We are heading into the time of year when more bankruptcies are typically filed, so it is important to get up to speed on all of the new court rules that went into effect back on December 1st.

From the debtor’s perspective, not much has changed. All of the new rules impact creditors much more than debtors. The only thing debtors should maybe take a look at are the new Chapter 13 plan forms.

After many years of debate and disagreement, form 113 was introduced to standardize Chapter 13 plans. This change was pushed through because a few years ago the United States Supreme Court ruled that creditors are bound by the terms of a confirmed Chapter 13 plan, even if the terms of the plan contradict the legal rights of a creditor, so long as the creditor had adequate notice and an opportunity to object to the plan. Some creditors were complaining that they were being tricked into agreeing to plans that were unfair to them because plans varied from jurisdiction to jurisdiction, and it was difficult for them to spot things that were unfair to them. Well, the courts listened to this and created a uniform, national plan form.

However, there are still going to be differences from jurisdiction to jurisdiction because each jurisdiction gets to choose whether to adopt the national form or to create a local form that is based on the principles of the national form. According to Bloomberg BNA, 81 of 94 districts have “opted out” of the new national form and have instead created a custom form or are working on doing so.

Anyone who is filing for bankruptcy under Chapter 13 over the next few months should be aware that new forms and other new rules are going to take some getting used to for creditors, attorneys, and the courts. It shouldn’t slow things down too much, and should ultimately make the bankruptcy process faster and more efficient in the long run, but in the short term it might cause some hiccups. Our best advice is to be patient, and to ask your attorney to explain things to you whenever you don’t fully understand what is going on.

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933 North Mayfair Road, Suite 107, Milwaukee, WI 53226
| Phone: 414-436-8428