OFFICE OF THE CHAPTER 13 TRUSTEE DEBTOR ORIENTATION HANDBOOK “STRIVING FOR FINANCIAL STABILITY THROUGH EDUCATION” FRANK M. PEES STANDING TRUSTEE
PURPOSE OF ORIENTATION To Welcome To Educate To Empower To Help with Administrative Issues
BANKRUPTCY Process under Federal Law provides protection from creditors to: Individuals Families Small Businesses Corporations Family Farmers and Fishermen
UNITED STATES BANKRUPTCY CODE Sets out relationship between Debtors Creditors Trustee Court Allows for most debts to be canceled if a bankruptcy case is filed and all procedures are followed
TYPES OF BANKRUPTCIES 7 Chapter 7-Liquidating Chapter (must liquidate all non-exempt assets to raise the capital needed to pay your debts) 11 Chapter 11- Allows corporations and large businesses to reorganize debts, assets and operations in order to remain in business. 12 Chapter 12- Strictly for family farmers and fishermen 13- Chapter 13-Allows families and small businesses to reorganize.
PEOPLE INVOLVED IN YOUR BANKRUPTCY Debtors- the individual or family filing the bankruptcy-need to file accurate paperwork with the court listing your debts, assets, income and expenses. Attorney-advises the debtor on all matters, files paperwork, appears at hearings, negotiates with creditors. Difficult to be successful if filing pro se.
Creditors-the people or companies you owe. There are three classifications of creditors and their classification determines how they are treated in the plan. secured priority unsecured The Chapter 13 Trustee and the staff of the Trustee’s office reviews your paperwork conducts the §341 Meeting of Creditors* receives payments from you and pays your creditors *341 MTG of CREDITORS: 170 N. High St.; Mandatory; I.D. required
Court or Bankruptcy Judge makes final decision regarding any dispute between debtors and creditors has authority to confirm convert or dismiss your case.
CASE NUMBER Use your case number on all checks and correspondence. 13-54321 [Example] First 2 numbers (13) is year case was filed Third number is jurisdiction (5) Last 4 numbers are uniquely yours Know your case number when calling the Trustee’s Office
PAYMENTS All payments must be mailed to the lockbox. No payments can be made at the Trustee’s Office. Most payments are made by wage order. Page 2 of your book shows how you can calculate the amount deducted from each pay period. Direct payments allowed only in certain circumstances. Allowed to send extra payments to shorten the plan. Cannot pay ahead. Cannot ask to have a payment applied to a specific creditor. First payment is due no later than 30 days after the petition date.
PAYMENT TIMELINE First payment is due no later than 30 days after the petition date. Petition Filed 30 days after filing date, first payment due Every 30 days thereafter, payment is due
LENGTH OF PLAN Plans last between 36 and 60 months. No plan can last longer than 5 years. Can last less than 36 months only if all creditors are paid 100%.
IRS The IRS will be watching you a little closer. Make sure to file your tax returns in a timely manner. (Can still file them electronically.) You probably will not receive a refund if any debt is owed to the IRS. If you do not owe the IRS and your case is not in arrears, you may receive at least a partial refund. If so, it will be a little slower in getting to you because you can no longer receive it electronically. May want to talk to your attorney about changing the number of exemptions you claim.
CYA (CALL YOUR ATTORNEY) If you need any legal advise If you want to incur debt -anything over $1,000.00. (Credit cards are not allowed while you are in the plan.) If you want to sell anything of value If you change jobs or move to a new address If you receive any legal papers
AUTOMATIC STAY Goes into effect as soon as case is filed. All repossessions, foreclosures and creditor contact must stop. Remains in effect with continued current payments and current insurance. Co-signers are protected by a Co-Debtor Stay. However, there are avenues a creditor can take to go after a co- signer If you want the co-signer protected, need to talk to your attorney as to the treatment of that debt. Creditors must ask court for release from automatic stay (stay lift or motion for relief from stay) You need to be noticed if any creditor attempts to lift the stay.
WATCH YOUR MAIL Need to watch your mail; open your mail Only a small window of opportunity to answer many legal pleadings including a lift stay. Once that time elapses, there is very little that can be done.
REASSURANCE The Trustee’s Office realizes that things happen If you cannot make your full plan payment, contact your attorney immediately. Need to do everything possible to complete the plan.
PROOF OF CLAIM Each creditor that receives notice of your bankruptcy filing has an opportunity to file a proof of claim. Creditors use the POC form to tell the court what you owe. The deadline for filing the POC is called the bar date. For non-governmental agencies that date is 90 days after the first date set for the Meeting of Creditors. Governmental agencies such as the IRS have 180 days to file a POC. If creditors fail to file a POC in a timely manner, chances are they will not be paid through the plan.
NOTICE OF INTENTION TO PAY CLAIMS It is very important to review all of the documents sent to you by the Trustee’s Office. The first of these is the Notice of Intention to Pay Claims. Please review this document carefully. If you owe a mortgage or a car lien and that creditor is not listed, please call your attorney. If creditors do not file, it may shorten the time you are in the plan. Make sure that your friends, family, etc. file a POC so that they can be paid through the plan.
SEMI-ANNUAL REPORTS Sent twice a year: in April and October Show how the money came into the Office and to whom it was disbursed Also show who is included in your plan Not a pay-off statement. Review all of your payments and make sure that our office has accounted for all of the payments you have made.
COURT HEARINGS At confirmation, the court approves your plan. Before you leave your §341 Meeting of Creditors, you will know whether your plan is in posture for confirmation.
THINGS TO REMEMBER At some time you will want to re-establish your credit. This plan will help you to do so. If paying your mortgage company direct, notify them once a year to make sure that you are current on your payments. If you have any problems getting car titles after your vehicles have been paid through the plan, contact your attorney. Be sure to keep all your paperwork! If you need to send any correspondence, do not send this with your payment. Correspondence goes to our physical address which is on page 4 of your book; payments to the lockbox. If you change your address or your place of employment, please notify our office, the court and your attorney. Maintain insurance on home and vehicles
DISCHARGE Technically, plans close once a month. A certification of final payment and case history is submitted to the court for auditing before your case can be closed. Auditing takes 4 to 6 weeks. If no objections are filed, you will receive an Order of Discharge from the bankruptcy clerk. The fact that you filed will stay on your credit report for at least 7 years after the date of filing. Our office is here to help you with credit re- establishment.
TRUSTEE’S WEBSITE The Trustee’s website contains basic information such as filing date, approximate completion date, receipt of payments from you, pay-off amount, etc. It provides this information 24 hours a day, 7 days a week.