In 1968, Congress passed the Truth in Lending Act, or TILA, which was the first major Congressional venture regulating consumer credit. “The purpose of this regulation is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. The regulation also includes substantive protections. It gives consumers the right to…

Creditors that hold debts secured by depreciating personal property, such loans secured by cars and boats, are entitled to receive “adequate protection” payments while a debtor undergoes the bankruptcy process. The underlying theme of adequate protection is designed to protect an entity from a decrease in value of its interest in property of the estate…

The U.S. Bankruptcy Code allows individual chapter 7 debtors to redeem certain tangible personal property, when such property is intended primarily for personal, family or household use, by paying the secured creditor the allowed amount of the secured claim. Congress created the right of redemption “to protect debtors against ill-advised reaffirmations and the high replacement…

Chapter 7 of the U.S. Bankruptcy Code provides a liquidation process for consumer debtors. It accomplishes the twin objectives of bankruptcy, providing a fresh start to the “honest but unfortunate debtor” and ensuring an equitable and ratable distribution of assets to creditors. A chapter 7 debtor enters bankruptcy with an unmanageable debt load and insufficient…

The Bankruptcy Code provides debtors, unsecured creditors, and trustees the capacity to modify a chapter 13 plan, even after confirmation, due to changed circumstances. Modification, under of a Chapter 13 plan must be made post-confirmation of the plan and pre-completion of payments. A debtor, chapter 13 trustee or creditor holding an unsecured claim may request…

For chapter 13 debtors in general, garnering a discharge is the goal of filing for Chapter 13 bankruptcy, which cannot be achieved for at least three to five years. In many cases, a debtor may not achieve a discharge at all. Procedure to Achieve a Discharge Procedurally, a chapter 13 debtor is entitled to a…

To confirm a Chapter 13 plan, the Bankruptcy Code requires, among other things, that a proposed plan can be confirmed if it “has been proposed in good faith.” The term “good faith” is ambiguous and has never been conclusively defined. Consequently, the good faith requirement is the most heavily litigated provision of a Chapter 13…

The United States Bankruptcy Code details certain mandatory provisions for every chapter 13 plan and several permissive provisions that a debtor may include. First and most importantly is that a debtor must submit to the trustee all or a portion of future earnings or income necessary to execute the plan. Second, the plan must provide…

Both the initial filing of a chapter 13 petition and the debtor’s continued participation is voluntary. At any time, the debtor may elect to convert the case to chapter 7 if cause exists. A debtor may also dismiss the chapter 13 case provided that it was not previously converted from another bankruptcy chapter.   Process…

Generally, bankruptcy reorganization is applicable to prepetition debt, which refers to liabilities arising prior to the bankruptcy filing, not postpetition debt. Chapter 13 bankruptcy provides an exception to that rule. A Chapter 13 debtor, under certain circumstances, can include postpetitition consumer debt and taxes in the Chapter 13 plan. This requires trustee approval and that…