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November 15, 2010
Did you know most bankruptcy plans fail within the first year? The reason being is new bankruptcy laws require the majority of bankruptcy petitioners to enter into a payment plan under Chapter 13. Debtors are often required to contribute as much as 60-percent of disposable income to pay off reorganized debts.
Another reason most bankruptcy plans fail is because petitioners do not understand what happens if they do not adhere to their Chapter 13 payment plan. New bankruptcy laws took effect in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act. These laws are extremely restrictive and leave petitioners little room for error. One missed payment can result in bankruptcy dismissal.