Chapter 13 Filings Going Through the Roof in Utah and Across the Country.

Today I attended a seminar given by Kevin Anderson, the chapter 13 trustee for the district of Utah.  He was giving us bankruptcy lawyers an update on some changes to the local bankruptcy rules and forms.  During the meeting he showed a chart that demonstrates a dramatic rise in the number of chapter 13 cases that are being filed.  The reason he showed this chart to us was, in part, so that we would have more patience in dealing with his office and the bankruptcy court's staff while everyone adjusts to the demands upon the system cause by all these filings.  He speculated that the high unemployment rate and ongoing recession caused so many filings, but I think there may be other factors at work.  Increasingly, bankruptcy lawyers are pushing for their clients to file chapter 13 instead of chapter 7 and this trend may be part of the reason more people entering bankruptcy are choosing chapter 13 instead of 7.  Chapter 13 does require you to pay back a (usually very small) portion of your debts over a 3 to 5 year repayment plan, but in a chapter 13 you don't have to worry about a chapter 7 trustee trying to take your non-exempt assets.  I know in my own practice I will recommend a chapter 13 in a heartbeat if I am even remotely worried about my client losing an asset.  It's just not worth the unpleasant tangling with a chapter 7 trustee if there is a risk of property loss.