When people file for Chapter 13 bankruptcies, they are allowed to set up repayment plans. While this course of action can be beneficial for the individuals making the filings, it can cause difficulties for creditors since they have to keep track of a multitude of repayment plans from different borrowers. Making this process even more complex is the fact that different states have different forms for notifying creditors about the repayment plans.
In fact, depending on the state, jurisdictions and judges may have their own forms, and some districts had none. As a result, some states have been considering implementing a single form that everyone would use. This would allow lenders to keep better track of all the various repayment plans of the individuals that owe them money.
It was also suggested that there should be a nationwide form that everyone in the country would use for bankruptcy filings. However, many people preferred that states be able to create their own individual forms and plans. One proposed form would require that repayment proposals be formatted in a particular way and that aspects of the repayment plan be discussed in a set order.
Filing for a Chapter 13 bankruptcy can be beneficial for a few reasons. If someone is struggling to pay back his or her creditors, a bankruptcy filing could provide him or her with more time to do so. It may be able to stop or prevent a foreclosure. Additionally, in some cases, a person's outstanding debts may be discharged once a bankruptcy's terms are completed. A lawyer could provide insight into the pros and cons of filing for bankruptcy and the particular eligibility requirements for filing under Chapter 13.