What is Chapter 13?

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. People who file Chapter 13 cases are commonly referred to as “debtors.”

Who is my Chapter 13 Standing Trustee?
What are the duties of my Chapter 13 Standing Trustee?

Your Chapter 13 Standing Trustee is Isabel C. Balboa, Esquire. The Trustee represents the bankruptcy estate. The Trustee is not your legal representative nor is the Trustee the legal representative for any creditor. The primary function of the Trustee is to administer the bankruptcy estate (i.e. oversee timely receipt of your plan payments and make prompt and accurate payments to your creditors). The Trustee also provides information about Chapter 13 cases to debtors, creditors, and to the Court. Neither the Trustee nor any member of her staff may give you legal advice.

Am I required to use an attorney?

While use of an attorney is strongly encouraged, it is not required. You may choose to proceed on your own, without assistance from counsel. If this is your decision, you should understand that you will be fully responsible for representing yourself and will be expected to comply with all the law and court rules and properly file all documents and motions. Also, you should be prepared to disclose at the First Meeting of Creditors the name, address, telephone number and amount you paid anyone who helped you with your filing. Bring any receipts or business cards or written information you received from the person who assisted you. If you would like legal assistance, but are unable to afford an attorney, please go to the following website for more information on the pro bono and legal aid programs offices in this state: http://www.njb.uscourts.gove/probono/.

What are my Chapter 13 Costs?

The filing fee is the fee charged by the Bankruptcy Court at the time your petition is filed. There may be additional fees for amendments to schedules, court appearances, etc., which should be discussed directly with your attorney.

The attorney fee is legal fees that are agreed upon with your attorney and some, or all, may be paid through your plan. Your creditor(s)’ attorney may also be awarded fees by the Court for filing motions in your case. All attorney fees must be reviewed and approved by your Bankruptcy Judge before being paid through your plan.

The Trustee’s costs for administering your case are paid from the funds you pay into your plan. The United States Code sets the maximum charge at ten percent (10%) of Trustee receipts. The percentage fee will vary during the life of your case, but the percentage is generally less than 10% and would not be more than 10% at any time. If your case is dismissed or converted to another chapter prior to confirmation, the Trustee will return to you all funds on hand, less Court approved attorney’s fees and allowed Trustee’s fees.

What are Trustee payments?
When are Trustee payments due?
Who do I make my payments payable to?
Where do I mail my Trustee payments?

Trustee payments are the payments that you make to the Trustee to repay your creditors, cover some or all of your Attorney’s fees and cover the Trustee’s fees.

Your first payment is due the first of every month (For example: if you filed your petition with the court on June 15th, your first payment is due on July 1st). All payments should be made payable to Isabel C. Balboa and should include your full name and your bankruptcy case number. All payments must be by money order, cashier’s check, or certified checks only, and must be legible. The Trustee’s office does not accept hand-delivered payments, cash payments, personal checks or bank by phone. The Trustee does accept ePay (sign up required) Do not overnight your payments as your payments go to a Post Office lock box and there is no one there to sign for them. All payments must be sent to:

Isabel C. Balboa
P.O. Box 1978
Memphis, TN 38101-1978

Can I have my Trustee payment taken from my employment check?
What is a wage deduction/order?

You may choose to have your payment deducted from your pay check and mailed by your employer to the Trustee through a wage ordered deduction. If you choose to have your payment deducted from your pay check, a Court order must be issued by your Bankruptcy Judge. Your employer is then required to mail your payment directly to the Trustee at the P.O. Box address. Your payments may be deducted weekly, bi-weekly, or monthly, depending on how you are paid.

Even if you choose to have your payment deducted from your pay check, it is essential that you make direct payments to the Trustee’s lockbox until you actually see the plan payments being deducted for your paycheck. It is also your responsibility to continue with the plan payments in the event there are missed days from your place of employment due to vacation, illness or termination. If your employer fails to make a full plan payment deduction, you must send the needed plan payments directly.

What is the First Meeting of Creditors?
How do I know when the First Meeting of Creditors is scheduled?
What takes place at the First Meeting of Creditors?
Can I get a copy of the transcript of my First Meeting of Creditors?
What happens if I am physically unable to attend the First Meeting of Creditors?
What do I need prior to the First Meeting of Creditors?
What do I need to bring with me to the First Meeting of Creditors?
Where do I send my documents for the First Meeting of Creditors?
What is a Business Debtor?

This is the first Court appearance that you are required to attend. You, your attorney, and your creditors will be notified of this date once your petition is filed. At this hearing, you will meet with the Trustee or one of the Trustee’s counsel/staff attorneys, with your attorney present and any creditors that choose to appear. You will be asked questions, under oath, about your assets, your liabilities and the feasibility of your plan. If a petition was filed by a husband and wife, both must be present. This meeting will be recorded. Copies of the transcript may be requested from the Trustee’s office for a fee.

If you are physically unable to attend the First Meeting of Creditors, you and/or your attorney, will need to file a motion with the US Bankruptcy Court to obtain an Order allowing a telephonic meeting. You should speak with your attorney for further information.

When you attend your hearing, you must bring with you the following documents:

At least seven (7) days prior to this hearing you are required to provide the Trustee with the following. PLEASE NOTE IF ANY DOCUMENTS ARE SUBMITTED LATE, THIS MAY DELAY THE 341(a) MEETING OF CREDITORS AND THE CONFIRMATION OF DEBTOR(S)’ PLAN WHICH MAY RESULT IN A DISMISSAL OF THIS BANKRUPTCY PROCEEDING.

The Chapter 13 Trustee for the Camden Vicinage requires that all documents be downloaded at www.standingtrustee.com under “Trustee Filing System.” All documents filed should be redacted in accordance with Fed. R. Bankr. P. 9037 which states that all filers must redact: social security or taxpayer-identification numbers; dates of births; names of minor children; and financial account numbers. One exception would be for business cases only; bank statements should reveal the last four digits of the account number so that the accounts can be properly identified.

NON-BUSINESS DEBTOR(S):

BUSINESS DEBTOR(S):
In addition to the documents listed above, if the Debtor(s) (or any member of the household, including, but not limited to, Debtor’s spouse or significant other), is or was involved in a “business” within the two (2) years prior to the filing of this bankruptcy proceeding (this includes independent contractors, real estate agents or brokers, and landlords), a Certification of Business Debtor with all documents requested in the certification should also be submitted to the Trustee’s office via TFS. NOTE: Certifications of Business Debtor are located on the Trustee’s website at www.standingtrustee.com/forms/. If the Certification and supporting documents (i.e. tax returns, insurance, license, bank statements, and/or profit and loss statement), are not uploaded to the Trustee’s Filing System at least ten (10) days prior to the § 341(a) Meeting of Creditors, the meeting may not be held and the Trustee may move to dismiss your case.

What is the Confirmation hearing?
What takes place at the Confirmation hearing?

After the first meeting of creditors hearing, your attorney will proceed to a confirmation hearing before the Judge. Your appearance is not required, unless you are without representation by an attorney. Your attorney must appear at any confirmation hearing. If you are proceeding without an attorney, you must be present.

At the confirmation hearing, your Bankruptcy Judge will determine if your plan should be approved or your case should be dismissed. The Trustee will recommend confirmation (approval) of your plan if the Trustee believes that the plan complies with the legal requirements for Chapter 13 cases. If the Trustee determines that the plan is insufficient, your attorney will be informed of the issues at hand. Copies of any revised or amended documents must be received by the Trustee at least three (3) days prior to the confirmation hearing. No further Court appearances are necessary unless motions are filed by your creditors or you are otherwise informed by your attorney.

What do I do if I have a change of income?
What do I do if I am terminated or laid off from my job?

If there is change in your current income(due to illness, layoff, job termination, etc.), please contact your attorney immediately. The Trustee’s office conducts a monthly review of all cases to determine which cases are in arrears, and may request a dismissal of your case for non-payment. The Trustee’s Office will attempt to work with you to rearrange your payments temporarily to avoid dismissal of your case.

What do I do if I move?

In order for our Office to maintain current records, it is important that you notify the Trustee’s Office, in writing, as well as your attorney’s office immediately of any change of address.

Who / What are my creditors?
How are my creditors paid?

The money you pay to the Trustee is used to pay your creditors, your attorney’s fees, if any, and the Trustee’s fees. Creditors have 90 days from the First Meeting of Creditors to file a proof of claim with the US Bankruptcy Court. Government agencies have 180 days from the First Meeting of Creditors to file a proof of claim.

Creditors fall into 4 basic categories: Administrative (i.e. your attorney, creditor(s)’ attorney’s fees and costs; Secured (i.e. mortgages, auto loans); Priority (i.e. income taxes, past due child support, real estate taxes); and unsecured creditors (i.e. credit cards, medical expenses).

All creditors listed in your petition are under a restraining order (also known as the “Automatic Stay”) which prohibits them from making any attempt to collect money directly from you while your plan is in effect. However, you are required to make current post-petition payments to those creditors who hold a secured or priority claim during the length of your plan. Your attorney and any outstanding domestic support obligation creditors will be paid first, then your secured creditors, priority creditors and finally general unsecured creditors. General unsecured creditors will not be paid unless a proof of claim is timely filed.

What is a Motion to Vacate Stay?

A Motion to Vacate Stay is a formal request by one of your creditors to eliminate the Automatic Stay (restraining order). When a court grants this request, the stay is removed. Your creditors will then be able to reinforce their claims and resume collection efforts against you in State Court. Motions for relief must be served on Debtor(s) and/or Debtor’s attorney. DO NOT ignore a Motion to Vacate Stay. If you do, the Court may grant the motion.

The most common reason for a creditor to file a Motion to Vacate Stay is that the Debtor is in arrears in post-petition payments or if a vehicle is not insured.

Can I obtain credit during my bankruptcy proceeding?
Can I sell, buy or refinance property during my bankruptcy proceeding?

The use of credit is prohibited while you are in your Chapter 13 plan. This means you cannot use and/or obtain credit cards, borrow any money from a finance company, bank or credit union. You are also prohibited from signing, co-signing, or guaranteeing any debt. You cannot buy anything over time. If you need to buy something over time while in bankruptcy or borrow money, contact your attorney. In case of an emergency you may seek the Judge’s permission for use of credit during your Chapter 13 plan.

You must obtain Court approval if you wish to sell, buy, refinance or transfer any property during your Chapter 13 plan. If you receive a profit from a sale or refinance, some or all of that profit may have to be applied to pay your Chapter 13 creditors. If you fail to obtain Court approval, the transaction may be set aside and your plan may be dismissed. If you have entered into a sale or refinance, you should immediately contact your attorney, so he/she can file an appropriate motion with the Court.

Any real estate broker you wish to utilize must be approved by the Bankruptcy Court.

If you plan to pay all or part of your plan from the sale or refinance of real property, you must notify the Trustee and request a payoff, in writing, at least ten (10) days prior to the closing or it may be delayed.

What if I need to purchase a car while I am in an open Chapter 13?

It is possible to obtain a “no position” letter from the Trustee’s Office in order to purchase or lease a vehicle. The criteria for obtaining a “no position” letter for the purchase or lease of a vehicle is as follows:

Once you have selected a new vehicle but before you purchase, you must contact the Chapter 13 Trustee’s Office for the vehicle financing paperwork.

How long do I have to pay my case?
Can I payoff my case early?

The law requires that every Chapter 13 plan last for a minimum period of three years. However, you may be required to commit your income for up to five years. The actual duration of your plan may vary depending upon if your payments are made on a regular basis and amount of claims actually filed by your creditors that are confirmed to be paid through the plan. Additionally, your applicable 'commitment period' - the amount of time you must pay under your Chapter 13 Plan is dependant upon the disposable income you disclosed in your schedules when you filed for Bankruptcy protection.

If you want to pay your Chapter 13 plan off early, you must contact the Trustee’s office, in writing, requesting a pay-off letter. The request may be mailed, faxed or e-mailed to the office. This request may take up to thirty (30) days.

Remember that the bankruptcy code requires a Chapter 13 plan to last a minimum of 36 months. Therefore, any case under 36 months will be given a pay off at 100% of all timely filed proofs of claim, despite the confirmation hearing. Moreover, the payoff at 100% of all timely filed proof of claims will be given in cases where your applicable commitment period requires that you stay in your case for 60 months.

What is a dismissal of my case?
Why would my case be dismissed?

Your Chapter 13 Bankruptcy is voluntary therefore you are permitted to request that your Chapter 13 case be dismissed at any time. However, you should understand that a dismissal will remove the automatic stay (restraining order) from your creditors. Your creditors will then be able to enforce their claims and resume collection efforts against you in State Court.

Please note that the Court, Trustee and/or creditors may request a dismissal of your case at any time for failure to file documents, non-payment, unfeasibility, or failure to comply with the terms of the confirmation hearing.

Contact your attorney if you expect to miss payments due to loss of employment, extended illness or medical disability. Under Bankruptcy law, there are serious consequences if your case is dismissed.

How do I know when my case is complete?
What do I need to do in order for my case to complete?
How do the credit bureaus know my case is complete?
What is the Financial Management Course?

After you have successfully completed all payments to the Trustee and your confirmed plan has been paid, the Bankruptcy Court will grant you a discharge. Before you receive your discharge you are required to attend a personal financial management course. You must also file a certification with the Court that you are current in all support payments, both pre-petition and post-petition. After your plan is completed you will receive two documents:

You are required to attend an instructional course in personal financial management in order to complete your case. While you may attend any course that has been approved by the United States Department of Justice, the Trustee’s Office provides a free course that will fulfill this requirement. The Trustee’s financial management course is provided twice a year. You will receive notice in the mail of the dates and times of the next scheduled course.

What is my case information?
Who can see my case information?
Where do I find my case information?

Information relating to your Chapter 13 Bankruptcy case will be made available via the internet to your creditors and other parties in interest. 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 your creditors. Consistent with this duty, the Chapter 13 Trustee will make the following information available to your creditors on a web site:

You may review, without charge, your Chapter 13 case information that is posted on the internet. If you believe the information about your bankruptcy case is inaccurate, you can contact the web site host to report the error. You should receive a written response from the web site host within thirty (30) days following receipt of such report. The internet address where your information is posted is http://www.13datacenter.com.

What is the Order Discharging Debtor?
What debts will be discharged?
What debts are not discharged?
Who gets a copy of my discharge?

The US Bankruptcy Court will grant an Order of Discharge to the person names as the Debtor(s) after the completion of all payments under the Chapter 13 plan. It is not a dismissal of the case.

The discharge prohibits any attempt to collect from the Debtor(s) a debt that has been discharged. For example, a creditor is not permitted to contact a Debtor by mail, phone, or otherwise, to file or continue a lawsuit, to attach wages or other property, or to take any other action to collect a discharged debt from the Debtor. A creditor who violates this order can be required to pay damages and attorney’s fees to the Debtor.

However, a creditor may have the right to enforce a valid lien, such as a mortgage or security interest, against the Debtor’s property after the bankruptcy if that lien was not avoided or eliminated in the bankruptcy case. Also, a Debtor may voluntarily pay any debt that has been discharged.

The Chapter 13 discharge order eliminates a Debtor’s legal obligation to pay a debt that is discharged. Most, but not all, types of debts are discharged if the debt is provided for in the Chapter 13 plan or is disallowed by the Court pursuant to section 502 of the Bankruptcy Code.

Some of the common types of debts which are NOT discharged in a Chapter 13 bankruptcy case are:

This information is only a general summary of the bankruptcy discharge. There are exceptions to these general rules. Because the law is complicated, you may want to consult an attorney to determine the exact effect of the discharge in your case.

All creditors and parties in interest in your case will receive a copy of the discharge. It is your responsibility to send a copy of your discharge to the three credit bureaus, if you wish.

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©2014 Isabel C. Balboa, Chapter 13 Standing Trustee, except where noted.

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