NEW 341 MEETING OF CREDITORS ROOM

    As of April 29, 2003 the §341 meeting of creditors room will be relocated at the Bankruptcy Court, 120 W. Third Street, Dayton, Ohio 45402. The meeting room is on the third floor - Room 309. This will be for all 341's, not just chapter 13 cases. Parking may be a problem as the two lots nearest the Court are usually full by 9:00 a.m. Plan accordingly. Also, per Mike Webb, the Court will eventually want debtors to enter through the side door and come up through the basement. The court will be moving the vending machines to another room in the basement and adding a metal detector.

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DEBTOR CHAPTER 13 INTERNET ACCESS 

   Debtors are now able to access their case information on the Internet. This service is provided by the NDC (National Data Center). The address is http://www.ndc13.com. The debtors will need to register by entering their name, social security number, 7 digit case number and their e-mail address. The debtor will then need to verify a creditor from their case, Jeffrey M. Kellner as their Chapter 13 Trustee, and they will need to choose the blank address option. This site is for debtors, not attorneys. Attorneys should continue to use the current website at www.13network.com. Also, we cannot answer technical questions on the NDC website. Debtors should e-mail any technical problems to the NDC. This information is included both in the debtor's red book and in the 12 month letters.

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TAX  RETURNS /REFUNDS 

Well, it is that time of year again when the flowers bloom and everything springs to life, which unfortunately includes the dreaded tax return/refund issue and motions to dismiss. This year we had hoped to avoid the growing number of motions to dismiss for failure to provide the Trustee's office with debtors' tax returns and/or refunds due pursuant to the confirmed plan by providing debtors' attorney a list of the cases for which returns are needed. This list was provided at the beginning of the year.

             Unfortunately , two problems have arisen:

1.          Some of you have simply told your debtors across the board to send us your returns. We request you do not do this. First, not all cases require tax refunds to be paid in. Second, the staff is being overwhelmed with questions from debtors on whether to send the refunds in or not. Simply put, if the plan did not request the tax refunds, we are not looking at those returns. So please do not tell your debtors to send in the tax returns unless the plan calls for it.

2.          As of this writing, we still have about 1,000 cases where we need returns. Cathy of our office will be sending you a list sometime after April 15^th of those cases where we still need returns.

             When the inevitable motion to dismiss gets filed, anticipate being in court all day for each Judge. This is the third year for this process and apparently the message has still not gotten through, so we will not be withdrawing any motions that get filed even if the returns are provided, there was no refund due to the plan or the refund is paid.

             We are going to try and work with IRS for next year and see if the IRS will intercept the debtors' refunds pursuant to a list we will provide to the IRS (some Chapter 7 Trustees are doing this). In this way, we will receive the refund and then if the debtors want their exemption, they will need to provide us with the return. Otherwise, we will apply the entire refund to the plan.

             Remember, when your debtors send the IRS refund to the lock box that they need to designate on the check that it is a tax refund.

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BANKRUPTCY PETITION/PLAN/SCHEDULES / STATEMENT OF AFFAIRS 

    The Trustee and Court are again concerned about the quality of the bankruptcy filings being made. There are a lot of inconsistencies and errors in the Petition, Plan, Schedules and Financial Affairs. A lot of the problems seem to be related to sloppiness either due to the vast quantity of filings (we are again running at about the same pace we did in 1997) or inattention to detail. Therefore, we are placing you on notice that if the filings do not improve we may have to have another 'blood letting' day and we all remember what that was like.

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PROOF OF CLAIMS - LEASES 

    Our Claims Department has been having problems with Proofs of Claim on leases filed by creditors. A lot of times the proof of claims does not match up with the lease. This is usually due to either adding the lease end purchase option into the payments or granting the debtor an extension of the lease for a number of months.

    Remember, we will not pay the lease purchase option. The claim should only reflect the number of months remaining over the lease times the monthly payment plus any lease arrearage.

    Also, if an extension was granted to the debtor, we need the proof of claim to specifically state that the debtor was granted (for example) one extension for three months. The claim will get processed quicker and more accurately if this is spelled out plainly. Errors occur when we try to decipher the creditors' printouts.

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MODIFICATIONS 

    First, if you file a post-confirmation modification you must TIMELY serve us. We are getting copies of mods weeks after they have been filed. Remember we are not looking for the mod and will have no idea it has been filed.

    Second, if there are no objections to the post-confirmation mods, then it is you, as debtor's counsel, that must send the original order to us for Jeff/Scott to sign. We must sign off on all confirmation orders.

    Third, if you are surrendering collateral, please tell us exactly what you are surrendering and to who. It is extremely important on post-confirmation modifications that you be specific as the In re Nolan decision comes in to play on post-confirmation mods. Tell us what is going to happen with the deficiency - i.e. Surrender in full satisfaction; allow unsecured deficiency; pay secured (per claim In re Nolan). If you are allowing a deficiency, you probably will want to state a time limit. An example of language that may be beneficial to you might be “Surrender the (type of car) to (creditor). The creditor must dispose of the property and file a deficiency proof of claim in 90 (or length of time you decide) days or the claim will be deemed paid in full. If you just say “surrender” on post-confirmation mods - we will continue to pay the value of the collateral as listed in the original plan.

    Fourth, if the modification is filed pre-confirmation, you do not submit the order confirming. If no objections are filed to the modification then confirmation will be included in the original confirmation order filed by our office.

    If there is an objection to your modification based on money; equity or both, there is no need to do another modification. If you agree to the Trustee's recommendation, we can do an agreed order and there will be no need to do a lot of unnecessary work.

    Remember, the Trustee must sign off on all orders regarding post confirmation modifications and stipulation to valuation.

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AGREED ORDERS FROM HEARING

    When you resolve a case with Scott from hearings, Ginger or Sheri will be faxing you the proposed agreed order. Make sure you promptly sign and fax back. If your approval is not received within one (1) week, we will refax the order to you. If it is still not received, then the matter will be reset on the next court docket and the matter will go to hearing.  

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RESPONSES TO MOTIONS 

    It is clear from the responses to motions to dismiss filed by you that many of you are not taking the time to talk to your clients before you respond and are not evaluating and recalculating the plan.

     Most of these responses say absolutely nothing of value. In most cases, there is post-confirmation mortgage arrearage in the thousands and debtors' plans are so underfunded that the case should really dismiss and be refiled.

    Your responses should give a BRIEF explanation as to why no payments were made; when payment will be made; the current employer and payroll address of debtor; whether you will file a mod or object to a claim or increase the payment. Wayne Novick has a good response form that I am sure he would share with you if asked.

    One final point - the motion to dismiss will not be resolved if a plan payment has not been received prior to the hearing. If time is short, have your debtors bring the payment to your office (in either cash or certified funds) and call Scott that you have the payment. Then send the payment to the lock box. Scott will take your representation that you have the funds and will remove the matter from the court's docket.

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NUTS-N-BOLTS SEMINAR 

    The Chapter 13 Office will be holding another Nuts-N-Bolts Seminar on Thursday May 8, 2003 in the morning. This seminar will be for both attorneys and staff and will be limited to 50 people. If you are an infrequent filer, a new attorney, feel you need a refresher course or have been requested to attend by our office, please call Scott (ext. 137) or Ginger (ext. 114) to get on the list. If we request you to attend - we want you and your staff - not just the staff. This will be a very basic seminar to point out what red flags we look for in your petitions and schedules.

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RELIEF FROM STAYS / ATTORNEY FEES

     Most of you are aware that in proof of claims where the mortgage company is asking for reimbursement of attorney fees that these fees can be knocked out pursuant to In re Landrum.

    Also, In re Shaffer, 287 B.R. 898 (Bkcy S.D.OH 2002) has held that mortgage creditors cannot recover its fees on a motion for stay relief because there is no statute or enforceable contractual provision authorizing such an award.

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DEBTOR - ATTORNEY ONE LIST 

    If you are not currently signed up on the debtor attorney one list, I strongly suggest you do (debtor's attorney only). A great deal of information goes through this service and is a beneficial tool, including new cases, changes in policy; questions and general discussions. This tool should be used more than it is. If you wish to sign up call the office 222-7600, ext. 105 and Tim will send you an application.

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PENDING BANKRUPTCY LEGISLATION 

    The bankruptcy reform bill has passed the House. At present it is still tied up in the Senate. If and when it passes, you will be advised through the one list.

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MILITARY DEBTORS 

    If you have a debtor that is deployed or is being deployed in the war zone, please advise us immediately. We will need to see their deployment papers so that we do not try and dismiss the debtor(s). If you have joint debtors and one is deployed prior to the initial meeting of creditors, contact our office for the procedure to allow the meeting and case to go forward.

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CLOSING CASES / ATTORNEY FEES 

    If a case is in the process of closing out and you have at some point requested attorney fees (usually at the end of the case), if the order is not submitted within 30 days from the date of the application, the case will be closed without paying the attorney fees. You will have to deal with your debtors at that point.

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ELECTRONIC CASE FILING (ECF)

    The current plans call for our office and some attorneys to start using ECF (Electronic Case Filing) in October of this year. By July of 2004, all attorneys will be required to file documents electronically. The Clerk's office will provide training and must certify your office before you will be allowed to begin using ECF. For most of you, the equipment required will be a PC, possibly a scanner, a program that will create PDF files (such as Adobe Acrobat with write capability), depending on your volume a DSL, T1 or some other type of high speed Internet Connection and an e-mail.

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NACTT 

    National Association of Chapter 13 Trustees Annual Conference will be held July 17 - 20, 2003 in Chicago, IL.

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FINAL THOUGHT 

    Be advised that you should be on the lookout for petition preparers, especially when you see a debtor that is involved in a foreclosure. We have been investigating a rash of debtors who have paid organizations, in some case, thousands of dollars, to try and work with their mortgage companies, yet do nothing. Please make sure that when you interview your clients that you explore this possibility. A lot of this is also coming off of the internet. If you run into a situation, please call Scott immediately.

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