We are fast approaching the possibility of a wave of bankruptcy cases across the United States that will be very different from the 2008 mortgage crisis and crash. So far, it appears that the tide has significantly receded with bankruptcy filings dropping far below norms, which means there will likely be a tsunami awaiting just as soon as our government stops the printing presses and cuts off household support. Unfortunately, we are still in the midst of a global pandemic of variant proportions with Delta, Lambda and Mu Covid variants making their way through our unvaccinated communities. Until then, we are walking a fine line with when to cut off support. So, if you find yourself unable to book a reservation at the Four Seasons, you may need to inquire about bankruptcy under Chapter 13 and you’re seeing this because your plan may fail. Here’s why.
Chapter 13 is typically considered the chapter of choice for those wage-earners seeking to catch up on missed car or house payments and avoid repossession of a vehicle or foreclosure of a home. Confirmation of the chapter 13 plan that provides for payment of such arrearages over many months is necessary to begin the process of making up for missed payments. Completion of a chapter 13 plan through discharge can take 36 to 60 months and is very difficult to achieve even in attorney-represented cases. Approximately 55 percent of attorney-represented cases reach confirmation. The number of self-represented debtors that manage to get to confirmation of a chapter 13 plan is 0.4 percent – clearly demonstrating that it is nearly impossible for this population to succeed in chapter 13. This is according to the 2011 Pro Se Annual Report published by United States Bankruptcy Court, Central District of California. This is not to say you won’t make it, but just like any other long-term commitment, this takes budget discipline and resolve.
Once you’re plan is confirmed, your case is not over until after you’ve made your final payment. Here are the four reasons your case can get dismissed without your goal of a discharge:
A Chapter 13 Plan is akin to a debt consolidation repayment plan with 0% interest paid to unsecured non-priority creditors where you can pay an amount from 0% to 100% of all your debts depending upon many different factors. These cases are complex and counsel is highly recommended. What’s great about these cases is that hiring an attorney to represent you is made affordable because they can get paid some of their fees through your plan payments. It’s worth a consultation to see if this government program is right for you.