Kansas and Missouri are two very different states, so it shouldn’t be too surprising that they have different rules when it comes to how Kansas Chapter 13 bankruptcy and Missouri Chapter 13 bankruptcy cases operate in their federal courts.
However, a recent decision out of a high court should change the way Kansas Chapter 13 bankruptcies operate near the end of cases, and that’s not necessarily a good thing for our debtor clients.
Under the Bankruptcy Code, Chapter 13 cases can’t last for longer than 60 months (unless they are extended up to 84 month under the recent CARES Act legislation). However, Kansas judges for years have let cases near the end run a little longer to avoid dismissals due to defaults. Over five years, it’s easy to run a little behind due to emergency expenses, decreases in income, and other issues. Toward the end of a case, we can usually buy time for our clients to finish their plan payments, even if the plan runs to 63 or 65 months.
The Kansas Chapter 13 Trustees in Wichita, Topeka and Kansas City are expected to file more motions to dismiss near the end of cases for plans that appear unfeasible, that is, plans that look like they will take longer than 60 months to pay off. We’d anticipate trustees will do more frequent audits of older cases. This could be useful since attorneys will see these issues earlier, but how successful clients will be at paying off plans will remain to be seen.
As usual, that answer depends. It depends on whether we can successfully “cure” or pay off any accumulated deficit before the plan is set to end. It depends on whether there will be any more expected issues in ensuring all necessary plan payments and direct payments (on mortgages, student loans, and other long term debts) will be current. We may be able to amend plans to ensure the plans complete on time. We could also consider a dismissal of a case with a refile, a conversion to another Chapter of bankruptcy, or some other plan.
As your plan gets closer to completion, you’ll want to ensure you stay in constant contact with your legal team to make sure your Chapter 13 is still set to conclude and provide you with a discharge of debts. Not every Kansas Chapter 13 debtor needs a discharge, but those who do will want to make sure their years of plan payments are going to provide that payoff. If you are concerned about the status of your case view this video for more information or, if just have general questions, consult your lawyer.
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