We’ve had a string of them….
[Hint: in a small practice, a "string" means "three. " ]
But three clients in the past month with confirmed Chapter 13 plans have contracted to sell their homes without mentioning it to us, their attorneys.
The degree of chaos varied: inadequate time to get approval of the sale from the trustee within the contractual closing date; mortgage stripping issues when the plan is paid off early; and taxing authorities who decided to claim the post petition appreciation.
But the bigger problem is clear: operating successfully in Chapter 13 requires debtors to absorb a bunch of information about how bankruptcy works.
- What can they, and can’t they, do without prior consent?
- What does the vesting option mean in the real world?
When is the best time to learn?
When we first meet prospective debtors, we’re dealing with people experiencing stress, shame, and overload.
Clients are overwhelmed with the information they must process on bankruptcy choices, procedure, and consequences.
When the case is confirmed, and all the client has to do (they think) is make the plan payments, they relax and tune out.