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Debtor Frequently Asked Questions
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I have moved. How do I notify the trustee of my new address?
If you move or have a change to your address during your case, notify your attorney to file a notice of address change with the Bankruptcy Court. The Chapter 13 Trustee cannot change your address in the trustee's database until the Court's records are updated with your new address as the address on file with the Court is your official address for purposes of the Chapter 13 proceeding.
What is the role of the Chapter 13 trustee in the Chapter 13?
I am the Standing Chapter 13 Trustee for all Chapter 13 cases filed in the Western District of Missouri. I administer Chapter 13 cases filed in the United States Bankruptcy Court for the Western District of Missouri. One of my roles is to receive your plan payments and disburse these funds to creditors who have filed claims pursuant to the terms of confirmed Chapter 13 plans.
My duties include assisting you with your Chapter 13 plan, but I am prohibited by law from giving you any legal advice. You should consult your attorney if you need legal advice.
My duties include assisting you with your Chapter 13 plan, but I am prohibited by law from giving you any legal advice. You should consult your attorney if you need legal advice.
What is the role of the debtor’s attorney in Chapter 13?
When your attorney agreed to represent you, your attorney became obligated to appear and represent your interests subject to the terms of your agreement. Generally, 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, contact your attorney. It is also important to respond to your attorney’s telephone calls, or other communications, as soon as possible.
You and your attorney should have entered into a written contract that explained how much the legal fee would be and how it would be paid. Be sure that you have discussed fully whether additional legal services during your case will cost you more money or whether the initial fee will cover all legal expenses. Your attorney's fee may increase if you are involved in a bankruptcy lawsuit called an "adversary proceeding" or other services that are not customary or routine. Your attorney should notify you if he or she seeks additional fees for representing you in the bankruptcy case, an adversary proceeding is filed, or for performing non-routine services. All fees charged by your attorney must be disclosed to the Bankruptcy Judge and are subject to the Judge’s approval.
If you decide to change attorneys during your Chapter 13, your new attorney must enter an appearance on your behalf with the Bankruptcy Court and your old attorney must withdraw as your legal representative with a motion filed with the Bankruptcy Court.
You and your attorney should have entered into a written contract that explained how much the legal fee would be and how it would be paid. Be sure that you have discussed fully whether additional legal services during your case will cost you more money or whether the initial fee will cover all legal expenses. Your attorney's fee may increase if you are involved in a bankruptcy lawsuit called an "adversary proceeding" or other services that are not customary or routine. Your attorney should notify you if he or she seeks additional fees for representing you in the bankruptcy case, an adversary proceeding is filed, or for performing non-routine services. All fees charged by your attorney must be disclosed to the Bankruptcy Judge and are subject to the Judge’s approval.
If you decide to change attorneys during your Chapter 13, your new attorney must enter an appearance on your behalf with the Bankruptcy Court and your old attorney must withdraw as your legal representative with a motion filed with the Bankruptcy Court.
What is a §341(a) Meeting of Creditors?
Under 11 U.S.C. §341(a), a debtor is required to attend a §341(a) Meeting of Creditors. This is an official proceeding where the trustee questions a debtor regarding their financial affairs. The debtor will receive notification from the Court regarding how to appear at the meeting. Creditors may appear and ask questions, but are not required to do so.
What is the automatic stay?
As a general rule, all creditors listed on your Chapter 13 Petition and bankruptcy schedules are under a “stay,” sometimes referred to as the “automatic stay.” The stay is a restraining order which prevents creditors from attempting to collect a debt from you directly or from contacting you or your employer during your Chapter 13 case. As soon as you file your bankruptcy petition, the stay is in place. There are exceptions to the automatic stay.
If you get a letter or notice in the mail, a telephone call, a summons, or a visit in person from a creditor, inform the creditor that you have filed a bankruptcy petition and contact your attorney. Creditors may file “Motions to Lift the Automatic Stay” or “Motions for Relief from the Automatic Stay,” e.g., when they are not being paid, when the collateral on their loan has been surrendered, or when the debtor does not provide proof of insurance on the collateral, etc. You should speak with your attorney immediately if this type of motion is filed in your case.
What is a proof of claim?
A Proof of Claim is a legal document that a creditor must file with the Bankruptcy Court in order to receive payment under a Chapter 13 plan from the Chapter 13 Trustee. Even if the Chapter 13 plan specifically calls for payments to a creditor, that creditor will not receive any distributions from the Chapter 13 Trustee if a Proof of Claim is not filed.
Creditors can obtain a Proof of Claim form from the Bankruptcy Clerk’s Office. Proofs of Claim must be filed with the Bankruptcy Court.
Creditors can obtain a Proof of Claim form from the Bankruptcy Clerk’s Office. Proofs of Claim must be filed with the Bankruptcy Court.
What are the different classes of creditors?
Creditors are classified in three general categories for the purpose of repayment of debt in the Chapter 13 plan. Generally, the Chapter 13 Trustee makes payments to the secured and priority creditors first.
The first classification is called “secured creditors.” These creditors have liens on collateral. Most house and car loans have the house or car pledged as collateral and are secured debts.
The second classification of creditors is called “priority unsecured creditors.” Debts to these creditors include recent income taxes, payroll taxes, sales taxes, past due child support, court costs, legal fees, bankruptcy attorney’s fees, and Chapter 13 administrative costs.
The third classification of creditors is called “non-priority unsecured creditors” or sometimes "general unsecured creditors." Debts to these creditors have no property pledged as collateral and loans were made solely on the basis of a promise to repay them. They include most credit card debts, signature loans, medical debts, store charges, loans from family or friends, etc. Generally, funds to non-priority unsecured creditors are disbursed pursuant to the terms of the confirmed Chapter 13 Plan after secured and priority creditors have been paid.
The second classification of creditors is called “priority unsecured creditors.” Debts to these creditors include recent income taxes, payroll taxes, sales taxes, past due child support, court costs, legal fees, bankruptcy attorney’s fees, and Chapter 13 administrative costs.
The third classification of creditors is called “non-priority unsecured creditors” or sometimes "general unsecured creditors." Debts to these creditors have no property pledged as collateral and loans were made solely on the basis of a promise to repay them. They include most credit card debts, signature loans, medical debts, store charges, loans from family or friends, etc. Generally, funds to non-priority unsecured creditors are disbursed pursuant to the terms of the confirmed Chapter 13 Plan after secured and priority creditors have been paid.
What are “bar dates”?
Under Federal Bankruptcy Rules, creditors have “bar dates” that require them to file their Proofs of Claim within a certain time frame. For non-governmental creditors, the bar date is 70 days from the date the Chapter 13 case was filed or converted to a Chapter 13 proceeding. For governmental creditors, the bar date is 180 days after the bankruptcy Petition is filed.
What is the Notice Allowing/Disallowing Claims?
After the bar dates have passed and your plan has been confirmed, the Chapter 13 Trustee files and sends you a “Notice Allowing/ Disallowing Claims” which sets out how Proofs of Claims will be paid according to the terms of the confirmed Chapter 13 Plan. You and your attorney should carefully review the Notice for any errors or discrepancies. If you dispute any claim's treatment or claim amount you should contact your attorney immediately to discuss filing a formal, written objection to the claim.
Each scheduled creditor is sent an “Acknowledgment of Claim and Notice of Proposed Treatment of Claim” from the Chapter 13 Trustee which provides notice that the claim will be allowed as set out in the Acknowledgment absent a timely objection being filed with the Bankruptcy Court.
Each scheduled creditor is sent an “Acknowledgment of Claim and Notice of Proposed Treatment of Claim” from the Chapter 13 Trustee which provides notice that the claim will be allowed as set out in the Acknowledgment absent a timely objection being filed with the Bankruptcy Court.
When is my first plan payment due?
Your first Chapter 13 plan payment is due 30 days after you filed your Chapter 13 Petition. If your case converted from Chapter 7 to 13, your first payment is due 30 days from the date of conversion. If you fail to commence timely plan payments, the Chapter 13 Trustee may file a Motion to Dismiss your case. The Court may then enter an order dismissing your case.
How do I make my plan payments?
You can send a personal check, money order, or cashier’s check to the Chapter 13 Trustee’s lockbox address in Memphis, TN. The address for plan payments is: Richard V. Fink, Trustee, PO Box 1839, Memphis, TN 38101-1839. Please do not mail or hand deliver plan payments to the Chapter 13 office in Kansas City. Plan payments will not be accepted in the Kansas City office. Cash is never accepted. Plan payments can also be made online. The trustee currently uses two on-line payment systems: 1. ePay System: www.tinyurl.com/kcepay.2. TFS Bill Pay System: www.TFSBillPay.com. TFS Bill Pay offers 24-hour support at 1-888-729-2413
You also can have your employer make your Chapter 13 plan payments by payroll deduction with an Employer Wage Order. Making your Chapter 13 plan payments through a Wage Order to your employer is an easy way to ensure that your payments are made to the Chapter 13 Trustee on time. An Employer Wage Order is a voluntary wage assignment and is not a garnishment.
It is your responsibility to ensure that payments are made even if an Employer Wage Order is in place. If you get a paycheck and your plan payment has not been deducted, you are responsible for making the payment yourself to the Chapter 13 Trustee’s plan payment address in Memphis, TN or through one of the online payment systems.
You also can have your employer make your Chapter 13 plan payments by payroll deduction with an Employer Wage Order. Making your Chapter 13 plan payments through a Wage Order to your employer is an easy way to ensure that your payments are made to the Chapter 13 Trustee on time. An Employer Wage Order is a voluntary wage assignment and is not a garnishment.
It is your responsibility to ensure that payments are made even if an Employer Wage Order is in place. If you get a paycheck and your plan payment has not been deducted, you are responsible for making the payment yourself to the Chapter 13 Trustee’s plan payment address in Memphis, TN or through one of the online payment systems.
I received a Trustee’s Motion to Dismiss my case. What does that mean, and what should I do?
If you fail to make your plan payments, fail to appear at the §341(a) Meeting of Creditors, fail to cooperate with the Chapter 13 Trustee, or fail to comply with other requirements of the Bankruptcy Code, or other terms of your Chapter 13 plan, the Chapter 13 Trustee or creditors may file a Motion to Dismiss your case with the Bankruptcy Court. If you received a Motion to Dismiss, contact your attorney immediately.
Can I sell or gift my property away in Chapter 13?
Generally, a debtor must receive permission from the Bankruptcy Court to dispose of any asset while in Chapter 13. Debtors should speak to their attorney before agreeing to sell, transfer, give away, or otherwise dispose of any property acquired before, during, or after the filing of the Chapter 13 case. Sale: A request to sell encumbered property (where a lien exists), or property that is valued at or above $3,500, must be submitted in the form of a motion to the Bankruptcy Court and be approved by the Judge prior to any action being taken, including the closing of a sale.You may sell unencumbered property valued at less than $3,500 without the permission of the Chapter 13 Trustee or the Bankruptcy Judge, but you should always consult with your attorney prior to selling any property.
Gift: Call your attorney to discuss the correct procedures for receiving Bankruptcy Court permission to transfer/give away property. The Trustee has no authority to grant the permission to transfer or give away property regardless of its value. If you transfer property without following the correct procedure, the transfer may set aside by the Bankruptcy Judge, your case could be dismissed, or other legal action may be taken against you and/or the transferee or recipient of the gift.
Gift: Call your attorney to discuss the correct procedures for receiving Bankruptcy Court permission to transfer/give away property. The Trustee has no authority to grant the permission to transfer or give away property regardless of its value. If you transfer property without following the correct procedure, the transfer may set aside by the Bankruptcy Judge, your case could be dismissed, or other legal action may be taken against you and/or the transferee or recipient of the gift.
I need to buy a new car, and the dealer says I have to get a letter from the trustee. Can I get a letter from the trustee?
Borrowing money or using credit during your Chapter 13 is prohibited unless you have the written permission of the Bankruptcy Judge or the Chapter 13 Trustee. This includes, but is not limited to: using credit cards, borrowing money from a finance company/bank, purchasing or leasing a vehicle, purchasing or refinancing a house, incurring student loans for yourself or dependents, etc. The exception is in the instance of an emergency for the protection and preservation of life, health, or property. Contact your attorney if you need to incur debt.
A request to borrow $3,500 or less can be sent to the Chapter 13 Trustee stating the purpose of the loan, the amount of the loan, the terms of repayment of the loan (payment amount, interest rate, etc.), and information regarding the impact of the loan on the debtor's ability to continue to fund the Chapter 13 plan.
A request to borrow more than $3,500 must be filed with with the Bankruptcy Court and approved by the Bankruptcy Judge prior to borrowing. A Motion must be filed with the Bankruptcy Court stating the purpose of the loan, the amount of the loan, the terms of repayment of the loan (payment amount, interest rate, etc.), and information regarding the impact of the loan on the debtor's ability to continue to fund the Chapter 13 plan.
A request to borrow $3,500 or less can be sent to the Chapter 13 Trustee stating the purpose of the loan, the amount of the loan, the terms of repayment of the loan (payment amount, interest rate, etc.), and information regarding the impact of the loan on the debtor's ability to continue to fund the Chapter 13 plan.
A request to borrow more than $3,500 must be filed with with the Bankruptcy Court and approved by the Bankruptcy Judge prior to borrowing. A Motion must be filed with the Bankruptcy Court stating the purpose of the loan, the amount of the loan, the terms of repayment of the loan (payment amount, interest rate, etc.), and information regarding the impact of the loan on the debtor's ability to continue to fund the Chapter 13 plan.
What should I do if I have had a property loss and receive insurance proceeds?
If you suffer a casualty loss and that loss is covered by insurance, you do not need the approval of the Bankruptcy Court for the insurer to pay the loss payee according to the terms of the insurance contract. If a creditor being paid through the Chapter 13 Trustee’s Office is the loss payee on the insurance policy and funds are distributed to that creditor from the insurer, the Chapter 13 Trustee must continue to disburse payments to that creditor according to the terms of the confirmed plan unless: -you file a formal written objection to the Proof of Claim with the Bankruptcy Court and the Court enters an order directing the Chapter 13 Trustee to stop making payments to the creditor or the order reduces the allowed amount of the claim to the amount previously paid by the Chapter 13 Trustee; or
-the creditor withdraws its claim, or amends its claim, or returns payment and indicates that its claim has been paid in full.
If you receive any insurance proceeds in excess of $3,500 after payment of the loss payee, you cannot spend this excess money without an order from the Bankruptcy Court. Contact your attorney immediately.
-the creditor withdraws its claim, or amends its claim, or returns payment and indicates that its claim has been paid in full.
If you receive any insurance proceeds in excess of $3,500 after payment of the loss payee, you cannot spend this excess money without an order from the Bankruptcy Court. Contact your attorney immediately.
What should I do if I receive a lump sum of money or other asset while in bankruptcy?
If you acquire any property while in Chapter 13, you must notify your attorney. This includes inheritances, life insurance proceeds, recoveries from legal actions, bonuses, gifts, etc. Whether you receive cash or an asset (such as real property or a car), do not take any action without speaking to your attorney. You will likely need a Court Order to retain the lump sum or other asset. Additionally, you may be required to amend your schedules and/or plan to account for this additional asset.
Do I need to maintain insurance while in Chapter 13?
You must maintain insurance on your property. All assets must be insured against physical loss for at least the values stated in your schedules. If you operate a business or are self-employed, you must have liability insurance and other insurance customary for the industry, such as workers compensation, products liability, professional liability, etc. You may not operate your vehicles without insurance and are required to prepay at least three months of insurance, to have collision and comprehensive coverage with a deductible not to exceed $500 and to name the lienholder as a loss payee.
You should always have access to copies of your insurance policies and declaration pages. Contact your attorney immediately if you encounter problems with any of your insurance policies. Insurance payments are usually not part of your Chapter 13 plan payment unless your homeowner’s insurance is part of an on-going mortgage payment being paid from your Chapter 13 plan payment.
What are the requirements regarding post-petition taxes and tax returns while my Chapter 13 plan is pending?
It is your responsibility to timely file all federal, state, and local tax returns both prior to and after the filing of your Chapter 13 Petition. The Chapter 13 Trustee may periodically request copies of your federal, state, and local tax returns. It is your responsibility to provide those documents when the Chapter 13 Trustee requests them. If you experience issues with filing your tax returns, contact your attorney. If you receive tax refunds in any year that you are in Chapter 13, do not spend the refund before speaking with your attorney.
What should I do if my income changes while in Chapter 13?
Notify your attorney of any changes to your employment or income status. This includes an increase in income, obtaining a second job, getting a new job, working overtime, losing employment, etc. You may be required to file amended schedules and/or an amended Chapter 13 plan. The Chapter 13 Trustee may check your tax returns every year and if your income is understated the trustee may pursue an amendment to your plan or dismissal of your case.
Can I gamble while in Chapter 13?
Do not gamble while you are in your Chapter 13 case. If you feel that gambling is a problem for you, click here are some helpful resources:
I just made my last plan payment. When will I get my discharge?
When you have successfully completed your Chapter 13 plan by making all plan payments and have met all other legal requirements for a discharge,, e.g., completed the Personal Financial Management Class, you may be eligible to receive a Discharge Order from the Bankruptcy Court. A Motion for Entry of Discharge must be filed in order to receive a Discharge Order. The Motion must certify, among other things, that you have made any direct payments, such as mortgage payments, domestic or student loan payments, required by your Chapter 13 plan.
This discharge acts as an injunction against certain creditors and prohibits them from taking unauthorized action against you after your case has ended and may extinguish your personal liability on a debt. However, if you have failed to pay a secured claim during your plan, then the lien on the collateral still may exist despite the discharge being entered. Some claims may not be discharged upon completion of your plan. Your attorney can help identify these debts and develop strategies for dealing with them, if they were not paid in full during the life of your plan. When you receive a Discharge Order, you should keep it in a safe place.
This discharge acts as an injunction against certain creditors and prohibits them from taking unauthorized action against you after your case has ended and may extinguish your personal liability on a debt. However, if you have failed to pay a secured claim during your plan, then the lien on the collateral still may exist despite the discharge being entered. Some claims may not be discharged upon completion of your plan. Your attorney can help identify these debts and develop strategies for dealing with them, if they were not paid in full during the life of your plan. When you receive a Discharge Order, you should keep it in a safe place.
What is the Personal Financial Managment Course?
You must complete an Instructional Course Concerning Personal Financial Management and obtain a Certificate of Debtor Education prior to filing a Motion for Entry of Discharge. There are many approved providers for this course in the Western District of Missouri.
One approved option available to you is called “Finally Financial Freedom” and is available through the Trustee’s Education Network, which is an affiliate of the National Association of Chapter 13 Trustees. “Finally Financial Freedom” is a free online, four to five-hour, 10 lesson course covering such topics as budgeting, how to spend and save, smart shopping, use of credit, identity theft, insurance, money management, etc. You can sign up to take the course at www.13class.com using trustee identifier TEN13004. If you meet the parameters above and complete all coursework within a year of the filing of your Petition, the Trustees’ Education Network will file a Certificate of Completion with the Bankruptcy Court and send you a copy.
One approved option available to you is called “Finally Financial Freedom” and is available through the Trustee’s Education Network, which is an affiliate of the National Association of Chapter 13 Trustees. “Finally Financial Freedom” is a free online, four to five-hour, 10 lesson course covering such topics as budgeting, how to spend and save, smart shopping, use of credit, identity theft, insurance, money management, etc. You can sign up to take the course at www.13class.com using trustee identifier TEN13004. If you meet the parameters above and complete all coursework within a year of the filing of your Petition, the Trustees’ Education Network will file a Certificate of Completion with the Bankruptcy Court and send you a copy.