Tennessee residents who are in debt and are considering Chapter 13 bankruptcy may be interested to learn about an interesting bankruptcy rule. On Feb. 7, 2017, the United States Bankruptcy Court for the Southern District of Illinois issued Rule 3015.1, which requires that the national form for Chapter 13 plans be used if a district does not already have a process that is in line with the requirements of the new rule.
Chapter 13 bankruptcy allows individuals who have a regular income to create a plan to repay part or all of their debts under a court-approved plan that lasts either three or five years. One of the main advantages of this form of consumer bankruptcy is that it allows a debtor to keep his or her home by stopping the foreclosure process and potentially resolving past-due mortgage payments.
Rule 3015.1 has multiple requirements. In addition to having to use only one form, a district must ensure that the opening paragraph of the form includes a clause that discusses the limits of the amount of a secured claim based on the assessment of the collateral or that suggests a method to avoid a lien.
The form must also adhere to a certain format as well with regard to numbering of paragraphs and bold type labeling. Separate paragraphs have to be used when discussing the topics of the treatment of secured claims, payment of domestic support obligations, maintenance and cure of home mortgages and surrendering of property used for securing a claim.
Bankruptcy may be used to reduce debt and interest payments and stop creditor harassment. An attorney who practices bankruptcy may advise clients with large debts of which type of bankruptcy may be appropriate for their financial situation.
