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National Chapter 13 form not a big hit

Although a new national Chapter 13 plan form went into effect on Dec. 1, Massachusetts residents may not have to worry about using it. This is because 81 of the 94 judicial districts decided that they aren't going to use the national form. Instead, they are going to use a local form. This is allowable under Rule 3015, which states that the official form must be used unless a local one has been established.

Local forms must contain language informing a debtor as to whether there are nonstandard provisions. If there are, they must generally be listed in the final paragraph. One of the reasons that a standard Chapter 13 plan form was adopted was to help make the process more uniform throughout the country. Although many districts may create their own plan forms, they will still have many of the same characteristics nationwide.

While many people have praised the new national form, some individuals believe that it is too complicated. One person who was involved in crafting a form for the Northern District of Florida says that the national form asks for too much information. In many cases, the information may not be needed to actually file for bankruptcy, which may make the process needlessly complicated for those looking for protection from creditors.

A Chapter 13 bankruptcy may be ideal for those looking to retain their property as they pay off their debts. Repayment periods generally last three or five years, and during that time, creditors are generally unable to take action to collect a debt. This may make it easier for individuals to stay in their homes, drive their cars or otherwise retain control of secured assets. Attorneys may be able to talk more about who may be eligible to file.

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