Information for Debtors

Information for Debtors

ABOUT 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 repay as much as you can. It allows you to keep some or all of your property during the time you are repaying your creditors and it permits you to modify some contract payments and interest rates. Your Chapter 13 plan may limit some interest, late charges, and penalties on some debts, as well as allow you to extend payments on those debts. The United States Bankruptcy Court must approve your plan before it becomes effective. The order approving a plan is called a Confirmation Order.


CREDIT COUNSELING
Within the 180 days BEFORE filing your bankruptcy case, you must complete an approved credit counseling program and be able to provide certification that the program was successfully completed. This certificate must be filed with the court. If you HAVE NOT completed such a program, discuss this with your attorney at once.


PERSONAL FINANCIAL MANAGEMENT COURSE REQUIREMENT
You are required to attend a financial management course before you will be entitled to receive a discharge of your debts. Please speak with your attorney to learn where and how you may obtain this education. The financial management course is different from and is in addition to the credit counseling that you received before you filed your bankruptcy case.


MEETING OF CREDITORS
If you are at the beginning of your case, the Court recently notified you of the date, time and location of the meeting of creditors for your case. Your attendance on that date is mandatory, or your case may be dismissed. You must bring a picture ID, such as a driver’s license or military ID, along with your Social Security Card or some original document with your social security number such as a W-2. Your testimony will be under oath or affirmation and will be recorded. Please contact the Trustee’s office in advance if a sign language or a limited English proficiency interpreter will be required for the meeting.


TAX RETURNS AND TAX REFUNDS
Federal Rule of Bankruptcy Procedure 4002(b)(3) requires that you provide the Trustee with a copy of your most recently filed federal tax return or transcript of such return no later than seven (7) days prior to the meeting of creditors. If your return is not available and you cannot comply with the rule, you must get an extension order from the Court, otherwise the Trustee will move for dismissal of your case prior to your attendance at the meeting of creditors. YOU SHOULD NOT PLAN TO BRING THE RETURN TO THE MEETING OF CREDITORS BECAUSE THAT WILL BE TOO LATE TO AVOID THE POSSIBILITY OF DISMISSAL OF YOUR CASE. Tax refunds may be property of your bankruptcy estate. Please contact your attorney with your questions regarding the administration of tax refunds.


DOMESTIC SUPPORT OBLIGATIONS (CHILD SUPPORT AND/OR ALIMONY)
In order for your plan to be confirmed, your plan must propose to pay all domestic support obligations (due at the time of filing and during the life of the plan). Your domestic support obligations must be paid on time and kept current and you must certify that fact at the conclusion of your case in order to receive a discharge of your debts. Any questions you have concerning your domestic support obligations should be addressed to your attorney.


MORTGAGE PAYMENTS
Payments to real estate mortgage creditors that come due after your case is filed must be made directly to those creditors, unless your Chapter 13 plan provides otherwise. Please make certain you keep written copies as proof of these payments. If a serious problem prevents you from making such a payment, you should contact your attorney. You may not be eligible to receive a discharge if you do not maintain your principal residential mortgage payments throughout the entirety of your plan.


PLAN PAYMENT OPTIONS
The first plan payment is due thirty (30) days after your case was filed or converted to Chapter 13, and payments maintained each and every month thereafter.

1. The Trustee’s office does not accept cash but will accept personal checks, money orders, and cashier’s checks made payable to “Chapter 13 Trustee.” You must include your name and case number on each payment to ensure the payment will be posted to the correct case.

2. You may also request a payroll order which requires your employer to withhold the amount of your plan payment from your paycheck and forward the payment to the Trustee. A payroll order helps ensure regular and timely payments, and the successful completion of your plan. If you elect to request a payroll order, be advised that you are responsible for the monthly payments until you see that there has been a deduction from your pay.

3. You may employ a bill pay service through your checking account, if available.

4. The Trustee also provides a method by which you can remit payments electronically. Please note that there may be a fee associated with this method. Please visit www.tfsbillpay.com to explore this payment option.

Creditors and the Trustee will monitor your payment history and failure to make regular and timely plan payments is grounds for dismissal.

You, as well as creditors and parties-in-interest, have the ability to review our office’s records on your case by visiting www.NDC.org.


PROBLEMS MAKING YOUR PLAN PAYMENTS
If you are not able to make your regular plan payments because of illness, loss of job, family emergency, or other serious problem, you should inform your attorney immediately.


REQUEST FOR DISMISSAL BY THE TRUSTEE OR A CREDITOR
If you fail to make the plan payments to the Trustee, and you have not been excused, the Trustee will ask the Court to dismiss your case. Any creditor may ask the Court to dismiss your case if you do not make your plan payments to the Trustee or your direct monthly payments on your house or vehicle.

Creditors or the Trustee may request dismissal of your Chapter 13 case if they believe your plan will not work (is not “feasible”), if you fail to attend the Meeting of Creditors, or fail to comply with other requirements of the Bankruptcy Code.


INSURANCE
Secured property that is collateral for a loan (such as a car or house) must be insured. In order for you to keep your secured property while your creditors are being paid through your Chapter 13 plan, you must make certain that the insurance premiums are paid on time. The secured creditor must be listed as lien holder and loss payee on all insurance policies and binders. If you let insurance lapse, the secured creditor may request, and the Court may enter an Order, allowing repossession or foreclosure. Keep your insurance policies handy should any creditor ever request proof of insurance or allege that your insurance has lapsed.


HOW CREDITORS ARE PAID
The money that you pay to the Trustee is used to pay expenses of administration (including Trustee fees and payments to your attorney) and the claims of your creditors. The Trustee pays all claims according to your Chapter 13 plan. Please make sure you are aware of what obligations will be paid by the Trustee’s office and those that you are required to pay directly to the creditors.


DISCHARGE OF DEBTS
When you have successfully completed your plan payments, you will receive notice about obtaining your discharge. In order to receive a discharge at the end of your case, all domestic support obligations must be paid and/or current. You must provide the Court with a certificate verifying that all such payments have been made. If you have a mortgage on your residence, you must also be current on those payments. In addition, you must have completed a personal instructional financial education course and provide verification of the successful completion of such course. This course requirement is not the same as the credit-counseling course you received prior to the filing of your case. If you have any questions regarding these requirements, please contact your attorney. After you receive your Order of Discharge, you will generally not owe any debts incurred before you filed your Chapter 13 case, other than long-term debts (such as a mortgage) and certain non-dischargeable debts (such as child support, alimony, or student loans). If you are not sure which of your debts will be discharged, you should discuss that with your attorney.

You may not be eligible to receive a discharge in your current Chapter 13 case if you have received a discharge in a recent previous bankruptcy case. Please discuss your eligibility for a discharge with your attorney.


CHANGE OF ADDRESS
You will receive correspondence during your plan. For example, if you do not comply with all terms of your plan, the Trustee or a creditor may move for dismissal of your case or for other orders from the Court. A notice of the motion will be mailed to you, and you will have the opportunity to respond. In addition, the Trustee will send you an annual report on your case. It is imperative that you maintain a good mailing address with your attorney, the Trustee, and the Court. This is necessary even after you have completed your plan payments because there is final paperwork you must file, as well as your receiving a final report and discharge, if eligible. Please immediately contact your attorney if your mailing address changes.


CREDIT REPORTING
The Trustee’s office does not report anything to nor has any contact with credit reporting agencies. Your bankruptcy may appear on your credit reports for years after it has been discharged. It is vitally important to keep and save ALL your documents, especially the discharge order and the final report from our office.


REPRESENTING YOURSELF
While there is no law against a person filing a Chapter 13 bankruptcy without an attorney (“pro se”), it is in the debtor’s best interest to obtain the services of a bankruptcy attorney when filing a case. Most of the fees required by an attorney for filing a Chapter 13 bankruptcy are usually paid through the plan (over 3-5 years, the usual length of a Chapter 13 bankruptcy) and the monthly payments (and the total to be paid over the period of the plan) are not affected by the presence or absence of attorney fees (i.e. you’ll usually end up paying the same amount of money into your Chapter 13 whether you have to pay attorney fees or not but you’ll save yourself A LOT of trouble if you get a lawyer).


ONE FINAL WORD
Complying with a Chapter 13 plan is not easy. You may have to make a real sacrifice to meet the obligations that you have specified in your plan and still live within your Chapter 13 budget. Thousands of families have successfully completed Chapter 13 plans in the District of Colorado. They have resolved their debt problems without filing Chapter 7 bankruptcy and have paid most, if not all, of their obligations to their creditors. Chapter 13 will work for you only if you work very hard at meeting your obligations under your plan.

You may contact our office for information about your case, however, please note that the Chapter 13 Trustee does not represent you or your legal interests, and the Bankruptcy Code does not permit us to give legal advice.