rather than forcing them into an onerous and expensive Chapter 11 . This change was applauded almost universally .
Staying In :
As with all debtors , individuals in a Chapter 13 must report all of their assets , debt , monthly income and expenses on their schedules . They must also propose a plan of reorganization which is consistent with the Code and are subjected to means testing . For many debtors , the outcome of the means test might be the difference between a Chapter 7 liquidation and a Chapter 13 repayment plan . For others , it will be the difference between a 36-month repayment plan and a 60-month repayment plan . While the efficacy of means testing is a topic for another day , there is an overwhelming number of Chapter 13 debtors who are not affected by this 2005 BAPCPA product , in that they often need more than 36 months to accomplish their financial goals , whatever they may be . That said , means testing is often viewed as an overly complicated and punitive outcome of BAPCPA .
Debtors must also provide verification of all sources of income ( both current and 60 days to 6 months prior to filing ), valuations of assets such as homes and autos , tax returns , and insurance . All of this information is reviewed by the Chapter 13 trustee along with all of the schedules , the petition and the plan . The plan must be feasible and properly address claims , equity , best efforts and the like . To be clear , Chapter 13 is a multi-faceted venture , and the trustee is charged with reviewing it all and does so on a continuous basis throughout the case . The work of the Standing Trustee does not end at confirmation .
Getting Out :
Essentially , to emerge from Chapter 13 , a debtor must satisfy the terms of the confirmed plan . In addition , per Section 1328 ( g ), there is a requirement to obtain a Financial Management Certificate , otherwise known as Debtor Education , pursuant to Section 111 . Also , under Section 1328 ( h ), there must be a finding that Section 522 ( q ) ( 1 ) does not apply . This section addresses exemption limitations for certain debtors who are convicted felons or committed securities fraud . While this sounds simple and straightforward , it may not be easy . A lot happens over the course of a Chapter 13 plan period . Issues with illness , employment , divorce or financial mismanagement can easily derail a plan and its completion . It is important for debtors to keep the lines of communication with their counsel open during the pendency of the plan period and to be proactive in making modifications in real time , rather than letting them fester until there is a motion for relief from stay or a motion to dismiss filed . A modified plan can often assist a debtor and allow a regrouping of sorts . Section 1329 allows for modifications , subject to limitation and
continued on page 21
13