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WHAT YOU SHOULD KNOW ABOUT
YOUR CHAPTER 13 CASE
Brief answers to most questions that come up while
under a Chapter 13 Plan. Read this pamphlet
completely to understand your obligations and
responsibilities and then refer to it as needed when
you have a question.
PUT YOUR CASE NUMBER ON ANYTHING
YOU SEND TO THE TRUSTEE.
JEFFREY M. KELLNER
CHAPTER 13 TRUSTEE
131 N. LUDLOW STREET
SUITE 900
DAYTON, OH 45402-1161
(937) 222-7600
Case Number: _____________________________
Attorney: _____________________________
Meeting of Creditors are held:
U.S. Trustee's Office
Bankruptcy Court Bldg.
Suite 309
120 West Third Street
Dayton, OH 45402
Objections to Valuation and/or Confirmation held:
East or West Courtroom
Bankruptcy Court Bldg.
120 West Third Street
Dayton, OH 45402
You must have a photo I.D. with you for entrance
of the Chapter 13 Office or Courthouse.
If you have a question on
your plan or a problem
with a creditor, your first
phone call should be to
your attorney. Your
attorney’s phone number
is .
The Office of the Chapter
13 Trustee cannot give
legal advice.
INTRODUCTION. Chapter 13 is one
method under the Bankruptcy Code to obtain relief
from your creditors while at the same time providing
a fair means to pay them back as much as you can. It
allows you to keep some or all of your property
during the time you are paying creditors back and it
permits you to modify some contract payments and
interest rates. Your plan may eliminate late charges
and penalties and allows you to extend payments on
some of your debts. Chapter 13 has gained
widespread acceptance across the country as an
attractive alternative to a straight bankruptcy.
YOUR NUMBER. At the time your Chapter
13 petition was filed, the Bankruptcy Clerk assigned
the case a number. This number is very important.
You will need it whenever you write to the Trustee's
office or when you make a payment to the Trustee.
Your case number has been printed on the cover of
this booklet. ALWAYS PUT YOUR CASE
NUMBER ON ANY PAYMENTS OR LETTERS TO
THE CHAPTER 13 OFFICE.
CHAPTER 13 COSTS. The costs for
Chapter 13 are paid by each case. There are basically
two types of costs in each case. They are the fee for
your attorney and the Trustee's administrative expense
fee. The fee for your attorney is set by the Court and
the order confirming your plan covers this item. The
United States Bankruptcy Code states that the Chapter
13 Trustee is to charge an expense and compensation
sum to cases and sets the maximum charge to be 10
percent of the amounts paid into the case. The
percentage is established by the United States Trustee
from the United States Department of Justice.
YOUR ATTORNEY. When your attorney
agreed to represent you and signed your petition with
you, your attorney became obligated to appear and
represent your interests throughout your Chapter 13.
Your attorney must continue to appear on your behalf
as long as your case is active or until the judge
permits your attorney to withdraw from your case. If
you ever have any questions concerning your case,
your creditors, your rights under the Bankruptcy Code
or your options under Chapter 13, make it a rule to
ask your attorney first.
Your attorney should have explained to you
how much the legal fee would be and how it will be
paid. Be sure that you have specifically discussed
fully whether additional legal services during your
plan will cost you more money or whether the initial
fee will cover all legal services. Your attorney will be
paid the allowed fee through the Chapter 13 plan. All
fees charged by your attorney must be reviewed and
approved by the Bankruptcy Judge, even if you agree
to pay more.
If you decide that you must change attorneys
during your Chapter 13, there are local bankruptcy
rules which tell how the change is to be made.
When you need advice or assistance, you
should be able to get help from your attorney.
Although the Chapter 13 Office is able to answer
many questions, the law prohibits the Trustee or the
Trustee's staff from giving you any legal advice. If
you have a problem, a question or need advice, please
call your lawyer's office first.
YOUR ADDRESS. We need to know your
exact mailing address for as long as you are under
Chapter 13. We have the address which you put on
your petition and we will send all notices to that
address until you or your attorney tell us to send them
somewhere else. If you ever move or change your
mailing address, you must inform your attorney, the
court and the Trustee in writing, of your new
address. Your attorney should notify the court of your
new address.
CALLS TO THE TRUSTEE'S OFFICE.
The Chapter 13 Trustee's phone number is (937) 222-7600. The office is open five days a week from 8:00
a.m. to 4:00 p.m. If you have a question which your
attorney cannot answer, you may wish to ask the
Trustee by writing a letter with your case number and
your question. If you cannot wait for a written
response, you may call the Chapter 13 Office during
the office hours. Do not feel that you have to talk
personally with the Trustee; the staff is familiar with
the policies and guidelines under Chapter 13 and is
well qualified to discuss with you any problems or
questions that may arise. The Trustee and the
Trustee's staff cannot give any legal advice, however,
and encourage you to direct all legal questions to your
attorney.
PAYMENTS. Most Chapter 13 payments
are made through a payroll deduction at your place of
employment. Sometimes the Court will allow you to
let the Trustee automatically deduct the payments one
time a month from your checking account. Only in
unusual circumstances will the Court allow plan
payments to be made by you directly to the Trustee
instead of by payroll deduction order or by deduction
from your checking account. Should you make a plan
payment, do so by personal check, money order,
postal order or cashier's check, and be sure to include
your NAME, address and your CHAPTER 13 CASE
NUMBER on the check. DO NOT SEND CASH -
THE TRUSTEE CANNOT ACCEPT CASH. The
trustee does not accept third party checks. These are
checks for plan payments from a person other than the
debtor. PAYMENTS MUST BE SENT BY
STANDARD MAIL TO THE CHAPTER 13
TRUSTEE'S LOCK BOX. CHECKS SHOULD
BE MADE PAYABLE TO: JEFFREY M.
KELLNER, CHAPTER 13 TRUSTEE AND
MAILED TO 1722 SOLUTIONS CENTER,
CHICAGO, IL 60677-1007
PAYROLL DEDUCTION ORDERS. If the
plan payment is to be made by payroll deduction, the
Trustee will notify your employer after the Meeting of
Creditors to deduct your plan payment from your
paycheck and send it to the Chapter 13 Trustee. It is
important that both you and your employer understand
that such an order is not a garnishment. A
garnishment or attachment can come only from
someone to whom you owe money, and you do not
owe the Court or the Trustee any money. The Court
is just carrying out its duty to administer the plan you
voluntarily filed and in which you gave the Court
exclusive jurisdiction over your future pay as long as
you are subject to a Chapter 13 plan. Most employers
understand that you are making a serious effort to
repay your debts instead of avoiding them and think
more highly of an employee who seeks to pay his
debts. If your employer has any questions, they may
call the Chapter 13 Office for an explanation.
OBLIGATION TO PAY. Even though your
employer may have been notified to deduct plan
payments and send them to the Trustee, you must
remember that you have the obligation to make sure
payments are made. If your employer ever fails to
make a plan payment deduction, you must tell your
lawyer that the deduction was not made and you must
send the needed plan payment to the Trustee's lock
box at: 1722 Solutions Center, Chicago, IL 60677-1007. Payments must be made by personal check,
money order, postal order or cashier's check. It is a
good idea to keep your pay stubs to demonstrate that
the deductions are taking place. If a payment is not
received by the Trustee as required by your plan, any
creditor in your case may ask the Court to dismiss the
case. The Trustee will ask the Court to dismiss your
case if you fail to make the required payments.
DISMISSAL. If you fail to make the
payments to the Trustee as required by your plan, the
Trustee will ask the Court to dismiss your case. It is
very important to contact your attorney if you ever
expect to miss a payment due to being laid off, being
medically disabled or because you have changed jobs.
If your case is dismissed, you might not be eligible for
any kind of bankruptcy relief for six months, so it is
important to talk to your attorney if you know of any
reason why the Trustee would not receive a payment.
Remember, the Trustee's office has no authority to let
you miss a payment or allow you to pay less than your
plan requires. Only the Judge can make such a
decision, and you should contact your lawyer as soon
as possible so your lawyer can file a motion
requesting the Judge to change the requirements of
your plan if you feel you cannot meet the obligations
of your plan.
CONTACTS BY CREDITORS. All the
creditors that you listed on your Chapter 13 petition
are under an automatic restraining order which
prohibits them from bothering you in any way. If you
get notices in the mail from your creditors, send them
to your attorney. Delinquent notices need not cause
any great concern, but if you get a more personal,
direct contact from a creditor, such as a telephone
call, a personal letter, a summons, or a visit in
person, you should immediately inform them that you
are under Chapter 13 and give them your case
number, and your attorney's name and address.
Under no circumstances should you discuss the debt
with them in any manner. Be sure you tell your
lawyer the name of the person who contacted you.
Your lawyer will want to follow up on such a call and
the name of the person calling you is very important.
DEALING WITH CREDITORS. You may
not deal with a creditor, just as a creditor may not
deal with you. You cannot pick and choose some
particular creditor and pay him "on the side," because
all of your debts must be dealt with through the Court.
All creditors must be paid under the authority of the
Court, by the terms of the law, and not by any
personal desires. If you want to pay creditors, you
must do so through your Chapter 13 plan.
MORTGAGE. If the Chapter 13 Trustee is
paying your mortgage through the plan, it is important
that we always know the correct mortgage amount,
including any changes, to pay your mortgage lender.
If you received a notice or letter from your mortgage
company that your mortgage amount is changing, i.e.,
variable interest rate or your escrow is increasing due
to a tax increase, you MUST send us a copy of the
change to allow us to pay the correct amount. Do not
assume that the mortgage company will provide us
with a copy of the change. You want to complete your
Chapter 13 case and have the mortgage current when
you receive your discharge.
INSURANCE. In order for you to retain
your property, even though your creditors must wait
to be paid through your Chapter 13 plan, you must
make certain that your property is insured. This is
especially true of motor vehicles. If you ever let
insurance lapse on you car, truck, van or motorcycle,
any creditor with a lien on it can ask the court to let
the creditor repossess the vehicle. It is a good idea to
keep your insurance policies handy should any
creditor ever believe that your insurance has lapsed.
The creditor is authorized to contact you to determine
if you have insurance on any motor vehicle on which
you owe that creditor money.
BALANCE DUE CREDITORS. Most
people are very interested in knowing how much they
owe to their creditors and how much they have left to
pay on their Chapter 13 plan. If you want to find out
what your payoff balance is on your Chapter 13 plan,
you would have to write the Trustee's Office and ask
for a "debtor payoff letter." The Trustee's Office will
send you a letter listing the balance due on your plan
at that time. If you want, you may visit the Trustee's
Office to look at the records of your case. Any payoff
letter issued by the Trustee's Office is only an
approximate figure as the actual payoff may vary
depending on claims which have been filed, interest to
be paid, etc.
The Trustee will send you a report every
twelve months of the receipts and disbursements in
your case for the last twelve months. This report is
issued in April of each year. You should review this
report.
PLAN COMPLETION. In every case in
which a debtor is unable to repay all of their debts in
full, the confirmation order provides that the debtor
must pay no less than three years of plan payments.
This is known as the "base" minimum total amount of
money that you will pay into the Chapter 13 plan - the
sum of all of your payments to the Trustee. The
confirmation order sets forth the minimum payment
(20%, 70%, etc.) which will be paid to the general
unsecured creditors. Your plan will not be completed
until your plan pays a "base" to the Trustee or the
minimum percentage payment, whichever is greater.
In no event will you have to pay more to the Trustee
than is necessary to pay all your debts in full.
CLAIMS OF CREDITORS. While every
creditor which you list on your Chapter 13 petition is
given the opportunity to file a claim for payment,
most creditors are allowed only 90 days from the
Meeting of Creditors to file their claim.
Governmental agencies have 180 days from the filing
of your case to file their claim. After you have been
under the plan for about seven months, the Chapter 13
Office will send you a complete list of every creditor
who has filed a claim in your case and the amount
which they claim you owe them. You should read and
examine this list, called a "Notice of Allowance of
Claims and Notice of Opportunity to Object," very
carefully. If a creditor is listed incorrectly or any
amount claimed does not appear correct, you should
contact your lawyer at once. Unless your lawyer
objects to a claim, we will pay the amount the creditor
requests, not the amount listed on your schedules. If
a creditor does not file a claim, their name and
address will appear with the notation "NOT FILED"
or "CLAIM NOT FILED." This means the creditor
has not filed a proof of claim in your case.
LATE CLAIMS. As noted above, creditors
have a limited time to file their claims for payment.
Generally, they are not entitled to payment if they file
after that date. If we receive a claim after that time,
we will send you a notice called "Motion to Allow
Additional Claim." If you do not want the Trustee to
pay the claim, your attorney must object to its
payment. Generally, any claim which is not allowed,
will not be paid and, if you complete your plan, any
claim that is not allowed or not filed will be
discharged except alimony, child support, certain long
term debts, criminal restitution, DWI claims, criminal
fines and student loan obligations.
HOW CREDITORS ARE PAID. The
money which you pay to the Trustee is used to pay
expenses of administration, including payments to
your attorney, and your creditors. So that you will
have some idea as to how the creditors are paid, you
should know that there are three basic types of claims:
priority, secured, and unsecured. Generally,
administrative costs and your attorney's fees are paid
first, then creditors with claims on your property
(secured claims), then creditors holding claims such as
certain taxes and support obligations (priority), and
then everyone else (unsecured claims). Generally, no
payments are made to unsecured creditors until the
priority claims and the secured claims are paid. Due
to this, it could be some time before the first payment
is made on the unsecured claims.
THE DIVIDEND TO CREDITORS. When
your plan was proposed, you and your lawyer
calculated what minimum payment would be paid to
your unsecured creditors and this "dividend" was
included on the order which confirmed your Chapter
13 plan. Because your plan may also include a
"base," you could wind up paying your creditors more
than the minimum which you promised in your plan.
The amount and size of the dividend is important to
you and the effect which this Chapter 13 will have in
the future.
If your Chapter 13 does not pay at least a
seventy percent (70%) dividend, you will not be able
to obtain a discharge under Chapter 7 (straight
bankruptcy) for six years after your Chapter 13.
Although you may feel that this is not important,
giving up the right to full bankruptcy relief is
significant and could work to your disadvantage if, in
the future you were faced with a catastrophic financial
problem.
COSIGNERS AND COMAKERS. A
cosigner, comaker or guarantor on any of your
consumer debts is generally protected from contact by
the creditor by something called the "Co-debtor stay."
This automatic protection applies in Chapter 13 cases.
If the cosigner, comaker or guarantor has put up
property to secure the loan, the creditor must request
a hearing before the Judge in order to proceed against
that property. The co-debtor stay will only protect
cosigners, comakers or guarantors for the amount of
debt your plan proposes to pay. If your plan is not
scheduled to pay all of the cosigned debt in full, a
creditor may obtain permission to collect from the
cosigner, comaker or guarantor, that portion of the
debt that your plan is not going to pay.
CREDIT CARDS AND POST PETITION
DEBT. When your plan is confirmed, the Judge will
prohibit you from incurring debt for as long as you
are under Chapter 13. This prohibits you from
borrowing any money from a finance company or
bank or your credit union. You cannot receive an
advance of your salary or advance loans on your
paycheck or checking account. You cannot buy
anything over time, like a car or an appliance, and
you cannot run up a bill to anyone. You cannot sign,
co-sign or guarantee an installment note and you
cannot use a credit card. This applies to any member
of your family that is supported by the debtor under
Chapter 13, whether they themselves are under the
jurisdiction of the Court or not, as long as the party
under Chapter 13 may be responsible for the debts.
The only exception to this is for medical emergencies.
If for some reason you feel that it is important for you
to be able to buy something in installments, or to be
able to borrow money, your attorney must obtain
either the Trustee's or the Judge's permission. If you
are paying regularly into your Chapter 13 plan, there
is a good reason to incur the debt, and your ability to
pay your plan payments is not threatened, the Judge or
the Trustee will generally grant you permission.
OBTAINING CREDIT WITHOUT
PERMISSION. Obtaining credit without permission
of the Court is not only a violation of the Court's
order, it is subject to reversal by the Court. Any
credit purchase you make without approval of the
Court may not be legal, the goods have to be returned
and you very likely could be out any payment you had
made. You would also place your plan in serious
jeopardy if you obtain credit without approval.
SELLING PROPERTY. You cannot
dispose of any of your property, including real estate,
without Court approval. If you dispose of your
property without permission, the transaction may be
set aside. If you want to sell your property, trade in
a car or sell your home, be sure to discuss it with your
attorney.
WHEN YOU'RE THROUGH. After you
have successfully completed your plan, that is, when
the Trustee has received enough money from you to
pay your creditors what you promised to pay them,
you will receive a "Final Report" from the Trustee.
If there is no objection to that "Final Report" by you,
your attorney, or any creditor, then the Court will
issue a discharge.
After you receive your discharge, you will
generally not owe any debts, other than alimony, child
support, mortgage payments, claims for DWI,
criminal restitution, criminal fines and certain student
loans. If you are not sure which of your debts will be
discharged, you should discuss that with your lawyer.
After your case is discharged, you may
receive a small refund check from the Trustee which
is the amount of your last few payments not needed to
pay your creditors.
REQUEST FOR DISMISSAL BY YOU.
Federal Bankruptcy law allows you to request that
your Chapter 13 case be dismissed at any time. No
one can force you to remain under a Chapter 13 plan
if you do not wish to remain. If you desire to stop
your case, contact your attorney. However, you
should understand that a dismissal will reactivate all
unpaid or disputed debts, all interest, finance charges,
all late charges not allowed by the Bankruptcy Court,
and all debts of creditors who did not file their claims.
In addition you will be forced to deal with those
creditors on their terms, not yours or the Courts. The
request for dismissal of your plan must be in writing
and sent to the Bankruptcy Court by your attorney.
CREDIT RATING. Your credit rating
during and after completion of Chapter 13 will be, as
it is now and was in the past, the personal opinion of
any credit grantor who looks at your credit record. A
credit rating is not A, B, or C, or 1, 2, or 3. It is a
record of all your past credit performances. This
record is made available to a creditor and they make
up their own mind, by their own standards, as to
whether or not they want to grant credit to you. Suits,
collections, attachments, straight bankruptcies and
Chapter 13 are indications, in one degree or another,
of credit problems. After many years and hundreds
of paid in full Chapter 13 cases in this area, we find
a good many knowledgeable creditors looking with
respect upon those who have paid debts in full under
a Chapter 13 plan. Any credit record that has been
blemished by a payment problem must be gradually
rebuilt. Remember, though, that 13 is a good place to
start.
CONTACT BY CREDITOR AFTER
COMPLETION OF CHAPTER 13. When a
creditor has had its claim paid by Chapter 13, whether
partially or in full, they should send the paid in full
papers to you. Even if the creditor fails to do this, it
may not be too important because the official records
of the Court shows your plan has been completed and
you received your discharge. Should you receive any
request for additional money after your plan is
completed, do not pay without first talking to your
lawyer.
PAYING MORE THAN REQUIRED. If
you are ever in a position where you wish to increase
your payments to the Trustee, even if only by a few
dollars a week, this will have a big impact on finishing
your plan ahead of time. Paying a little more than
required will reduce interest costs, administrative
expenses and cause the payroll deduction to stop that
much sooner. If you ever wish to increase your plan
payments, contact your lawyer. If you wish to make
a single extra payment, you may do that by sending a
money order or a cashier's check to the Trustee, but
you must notify the Trustee that an extra payment is
being made so that the Trustee can properly allocate
that extra payment to the appropriate creditors. Be
sure to put your case number on any payment you
send to the Trustee. This will also cause your plan to
be shorter. Even if you pay more than a monthly
payment one month, you are still required to make the
regular payments each month thereafter.
TAX RETURNS. Currently, the Internal
Revenue Service must hand process all returns filed
by a debtor under Chapter 13. They must do this to
avoid accidentally issuing notices in violation of the
automatic restraining order. To be certain that you
receive any refund in a timely manner, you should file
your tax return as early as you possibly can. If your
plan requires your tax refund to be a payment to the
plan, you must forward a copy of your tax return to
the Chapter 13 Trustee within 7 days of filing your
return. You will be advised by the Chapter 13 Office
as to what to do with the refund. In some cases, you
may be allowed to retain all or part of the refund.
PRIVACY STATEMENT. Notice is Hereby
Given That Information Relating To Your Chapter 13
Bankruptcy Case Will Be Made Available On The
Internet To Your Creditors And Other Parties In
Interest.
Pursuant to 11 U.S.C. §1302(b)(1) and
§704(7), your Chapter 13 Trustee has a duty, unless
otherwise ordered by the Bankruptcy Court, to furnish
information concerning the administration of your
bankruptcy case as is requested by creditors.
In furtherance of this duty, the Chapter 13
Trustee will make the following information available
to creditors who request such information:
1) Your name, bankruptcy case number, and
district in which your case is pending and the
trustee assigned to your case. Your social
security number will not be visible to parties
in interest, but they will be able to search for
your bankruptcy case using your social
security number. Furthermore, your
employer's name will not be displayed.
2) Information regarding claims filed against
your bankruptcy case including the identity of
the claimant, the type of claim (e.g. priority
taxes, secured, unsecured, etc.), and the
amount of the claim.
3) A history of all payments you make to the
Chapter 13 Trustee in your bankruptcy case
including the date and amount of each
payment.
4) A history of all disbursements made by the
Chapter 13 Trustee in your bankruptcy case
including the date of the disbursement, the
payee, and the amount.
If you want access to this information, log on
to www.13datacenter.com and click the words “Click
Here for Debtor Access”. You will need to enter your
name, social security number, your 7 digit case
number and your e-mail address. For verification, you
will be required to verify a creditor from your case,
your Chapter 13 Trustee and your address. You will
then be issued a user ID and password for future use.
Any questions concerning this website MUST BE
DIRECTED TO THE WEBSITE. The Chapter 13
Office cannot assist you with technical questions or
problems with this site.
SERVICEMEMBERS CIVIL RELIEF ACT
(SOLDIERS AND SAILORS)
If you or a dependent are called to active
military duty, you may be entitled to relief under the
Act. The Act applies to all Courts (including
bankruptcy) and all administrative agencies.
If you feel the Act should protect you, you
will need to contact your attorney to ensure that your
rights are protected. You have the right to appoint a
legal representative-either your attorney or through a
power of attorney, who can take the same actions as
you can as a servicemember.
Note that you must affirmatively exercise
your rights under the Act by notifying our office (or
other creditors) in writing and attaching a copy of
your orders to the written request. The advantages are
that you can cap interest rates, protect against
evictions/foreclosures and the loss of your property,
as well as, stay many Court actions. HOWEVER,
YOU or your legal representative must make the
request as outlined above. Remember, if you have any
questions about whether you qualify for relief or to
what protections you may be entitled, please contact
your attorney.
ONE FINAL WORD. Complying with a
Chapter 13 plan is not easy. You may have to make
a real sacrifice to meet the obligations which you have
specified in your plan and still live within your
Chapter 13 budget. Thousands of families have
successfully completed their Chapter 13 plans and
know that they have resolved their debt problems
without filing straight bankruptcy and have paid most,
if not all, of their obligations to their creditors.
Chapter 13 will only work for you if you work very
hard at meeting your obligations under your plan.
PLEASE SEND PAYMENTS TO:
Jeffrey M. Kellner, Chapter 13 Trustee
1722 Solutions Center
Chicago, IL 60677-1007
PLEASE SEND CORRESPONDENCE TO:
Jeffrey M. Kellner, Chapter 13 Trustee
131 N. Ludlow St.
Suite 900
Dayton, OH 45402-1161
August 18, 2004
JEFFREY M. KELLNER
CHAPTER 13 TRUSTEE
131 N. LUDLOW STREET
SUITE 900
DAYTON, OH 45402-1161
JEFFREY M. KELLNER
CHAPTER 13 TRUSTEE
131 N. LUDLOW STREET
SUITE 900
DAYTON, OH 45402-1161
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