New York consumers filing Chapter 13 bankruptcy are confronted with a bit of a technical issue. That issue is the Model Chapter 13 Plan.
Section 1321 of the U.S. Bankruptcy Code is among the shortest. It says nothing more than this - The Debtor shall file a Plan.
In many parts of the country, the Chapter 13 debtor is left without much to go on. The trustee may have tried to formulate a basic Chapter 13 Plan, or perhaps the bankruptcy lawyer has relied on his or her best efforts to put something together. But for many, the open-ended nature of Section 1321 leaves much to be desired.
Sure, there are other parts of the law that talk about what the Plan has to include or how it needs to function. But even when there’s a Model Plan in effect, you really want to be sure to have an experienced Chapter 13 lawyer on your side or you could end up in a bad situation.
Take, for example, the issue of your mortgage arrears. Your Plan needs to address how you will cure those arrears and keep your home. If your lawyer doesn’t fully understand the process and how the Plan can be made to protect you, however, you could end up with problems after your discharge.
The U.S. Bankruptcy Court for the Southern District of New York has made it somewhat easier in the form of the Model Plan, but that doesn’t hold true in the Eastern District of New York. In that district, the trustees have settled on a basic Plan that doesn’t really account for everything. If you want to add something or make a change, you’re going to need to go in front of the judge and face a challenge.
Your lawyer is going to need to be on his or her toes, with an excellent background in how issues are tackled around the country. If not, there’s a good chance that your trustee will prevail and leave you with nothing more than the basic protections that fit into their way of thinking.
Photo of the bar at the St. Regis Hotel by Al_HikesAZ.
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