Debtor Frequently Asked Questions
I have moved. How do I notify the trustee of my new address?
What is the role of the Chapter 13 trustee in the Chapter 13?
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?
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?
What is the automatic stay?
What is a proof of claim?
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?
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”?
What is the Notice Allowing/Disallowing Claims?
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?
How do I make my plan payments?
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?
Can I sell or gift my property away in Chapter 13?
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?
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?
-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?
Do I need to maintain insurance while in Chapter 13?
What are the requirements regarding post-petition taxes and tax returns while my Chapter 13 plan is pending?
What should I do if my income changes while in Chapter 13?
I just made my last plan payment. When will I get my discharge?
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?
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.