§ 8.19 — Debtor Needs Discipline of a Chapter 13 Case
Revised: April 20, 2016
Debtors’ counsel will sometimes realize that for reasons of experience, education or personality a debtor needs the control, regularity, and supervision of a Chapter 13 case. This is especially true in jurisdictions where Chapter 13 debtors are given an opportunity to participate in educational programs on managing finances, dealing with credit, dealing with merchants and the like. In all jurisdictions, in cases filed after October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)1 conditions discharge that the debtor complete “an instructional course concerning personal financial management described in section 111.”2 The Chapter 13 debtor must learn to live within a budget and to make regular payments to fund a plan. This is often the debtor’s first experience with control of earning and spending habits.
It is not that debtor’s counsel has a parental responsibility toward bankruptcy clients; rather, it is in the nature of a Chapter 13 case that it is often a significant learning experience for debtors. The skills learned in Chapter 13 benefit the debtor long after completion of the case. A debtor who has exhibited chronic money mismanagement is appropriately counseled to consider Chapter 13 as the best bet for some long-term improvement in the ability to deal with debt.