Facts You Need To Know

Text Box: Office of Jan P. Johnson, Chapter 13 Trustee Sacramento, California

Dear Debtor(s),

You have chosen to file a Chapter 13 bankruptcy where you will live with a budget for the next three to five years. This will not be easy, but I congratulate you for selecting a repayment plan over one of liquidation. Your goal in Chapter 13 is to receive relief from the pressures of your creditors while reorganizing yourself and ultimately receiving the discharge of those debts included in your plan.

My office is here to help you, but we cannot give legal advice. Your attorney is the best source of legal information during your bankruptcy. Should you have filed without an attorney, I urge you to seek one who can be paid through your plan. Bankruptcy is very technical and you should have legal counsel. Your success is one of our goals. I hope that this booklet helps you achieve yours.

Sincerely,

Jan P. Johnson

Chapter 13 Trustee

A. Your Chapter 13 Trustee and how to contact his office:

Jan P. Johnson is your Chapter 13 Trustee. His office phone hours are 9:00 a.m. to 3:00 p.m., Monday through Friday. Mr. Johnson has a very busy schedule and is unable to answer your calls directly in most cases. He has a trained staff to answer all your questions during the previously mentioned phone hours. Please do not leave a message. Due to the high volume of calls, the office staff is unable to return them. Please direct all your calls to (916) 492-8001 from 9:00 a.m. to 3:00 p.m., Monday through Friday. Phones are shut down between the hours of 12:00 p.m. and 1:00 p.m. Please note that the Trustee's phones will be turned off on the last two business days of each month in order to disburse checks to creditors. Please do not call the Trustee on these designated disbursement days.

Mr. Johnson's office is open from 9:00 a.m. to 3:00 p.m., Monday through Friday. It is located at 2535 Capitol Oaks Dr., Suite 100 Sacramento, California 95833. Please do not send mail to the physical address. The following addresses are for correspondence and payments:

Correspondence Address:

Jan P. Johnson, Trustee

P.O. Box 1708

Sacramento, Ca. 95812

Payment Address:

Jan P. Johnson

P.O. Box 1557

Sacramento, CA 95812

The Chapter 13 Trustee has a website that allows access to information about your case. You may access the website at www.13network.com. If you find any inaccurate information on the website, you are encouraged to contact your attorney and your Trustee's office immediately.

B. Personal Financial Management:

There are several websites that contain helpful information on personal financial management. www.edgate.com can be accessed in English or Spanish. This network provides resources to more than 12,000 schools and five million students, including materials, lesson quizzes, interactive calculators, online games and videos. Another excellent site sponsored by VISA is www.moneychoices.com, or in Spanish www.opcionesmonetarias.com. This site provides a certificate of completion.

C. If you have a legal question:

The Trustee and his staff cannot give legal advice. All legal questions concerning your case, a creditor, your rights, your options, correspondence you receive, or changes in your situation should be directed to your attorney. Your attorney must continue to represent you as long as your case is active or until a Judge permits him/her to withdraw from your case.

D. Your Plan payments:

All payments are due on the 25th of each month. There is no grace period. Your first payment is due on the 25th of the month following the date your petition was filed.

A wage order is the court ordered deduction of your plan payment directly from your paycheck. While at your first meeting of creditors, the Trustee or his representative will either waive a wage order, or will note that one will be forthcoming. This means that if a wage order has been waived, you are responsible for sending a money order or cashier's check to the previously noted payment address due on the 25th of each month until the completion of your plan. Please make payable to 'Chapter 13 Trustee' and make certain that you attach the sticker given to you at your first meeting of creditors directly to the front of the money order or cashier's check. It is important to write your name, social security number and to use your case number sticker on every payment. Keep your receipt for every payment you make to the Trustee.

If a wage order is not waived, you and your attorney are responsible for providing a completed wage order form to the Trustee's office immediately. However, the wage order will not be implemented until your case is confirmed. This may take several months to occur, during which time, you are responsible for sending a money order or cashier's check to the previously noted payment address due on the 25th of each month. In order to find out if your wage order has been implemented, you should keep in close contact with your attorney to determine if your case has been confirmed. You may want to ask your employer to notify you as soon as they have received the wage order. Until the order is implemented, you must continue to mail payments to the Trustee. Double payments may occur if you have recently mailed in a plan payment and your employer has implemented the wage order in the same month. The Trustee cannot return any payments made in error because of a lack of communication between you and your employer regarding your wage order implementation date. If you find that you have made a double payment, you do not need to make an additional payment the following month. You are urged to closely monitor your wage order.

If you have a wage order implemented and you change employers, it is your responsibility to make payments directly to the Trustee's office. The payment should be made with a money order or cashiers check until the wage order can be implemented with your new employer's address and information.

If your mortgage is delinquent when you filed the petition, then your regular on-going mortgage payments must be made to the trustee who will make these payments for you. You are required to make the FIRST mortgage payment to the lender yourself and then all future payments to the trustee starting on the 25th of the month following the filing of your petition.

If any payment is missed, the trustee may ask the court to dismiss your case. If your payment is late (received after the 25th) to the trustee, you must include your late fee charges in your payment to the trustee.

E. Your Annual Report:

Each February that you are in your Chapter 13 plan, you will receive a statement showing all the payments you have made to your Trustee and payments your Trustee has made to creditors on your behalf for the prior calendar year. If you note any discrepancies in the accounting of your payments, please notify the Trustee's office or your attorney immediately.

F. Your mortgage payment:

If your mortgage payment was not delinquent when you filed the petition, then your regular on-going mortgage payment is paid as usual to your creditor directly. It is of the utmost importance that you continue to make your mortgage payments in a timely manner if they are not being paid through your plan.

You also must maintain adequate insurance on your home and keep your property taxes up to date if these costs are not included in your mortgage payment. Failure to do either could result in your losing your home to foreclosure.

G. Your current address:

The Trustee must have your current address at all times in order to mail important documents throughout the life of your plan. The Trustee must also have your current telephone number as well. Please notify the Trustee's office and your attorney in writing of any changes in your address or telephone number.

H. Notice of Filed Claims:

Seven months after your case is filed, the Trustee produces a Notice of Filed Claims. This notice is sent to you and your attorney in the seventh month of your case. It is of the utmost importance that you thoroughly review the report with your attorney for the following reasons:

1. If a creditor did not file a claim they will not be paid. You may want to file a claim on behalf of a particular creditor.

2. If you disagree with the amount or classification of a filed claim you may have the right to object to the claim.

3. If there are any claims filed by creditors that were not originally provided for in your plan, you must take the necessary action to properly provide for the claim or the effected creditor will not receive a distribution.

All three of the above situations must be resolved through your attorney. The Trustee cannot resolve any of the above situations. The Trustee's office can alert you to the existence of a particular situation but the action necessary to correct the situation can only be initiated by you or your attorney.

I. The length of your plan:

Upon entering a Chapter 13 plan, it is difficult to determine the exact duration of your plan. It is rare for a plan to last exactly the same number of months as the original projected length. A creditor may file a claim for a larger than anticipated amount or a forgotten creditor may need to be added to your plan. In both instances your plan may need to be extended to accommodate the increased amount owed to your creditors. On the other hand, some creditors may file a claim lower than the originally anticipated amount. This does not necessarily mean your plan will complete quicker than your originally scheduled plan length. If your plan is scheduled to pay 100% to your general unsecured creditors, and a filed claim is lower than previously anticipated, you may complete your plan quicker than previously thought. However, if you are paying any amount less than 100% to your general unsecured creditors, and a filed claim is lower than previously anticipated, you must continue your plan out to the last originally scheduled month. In this event, the Trustee will disburse as much money as possible to your general unsecured creditors.

J. If you want to pay-off your bankruptcy early:

If you want to pay-off your case early, you must contact your attorney. Your attorney may submit a motion to the court and set a hearing date for the matter to go before a bankruptcy judge who will issue a final order regarding your request. If you attempt to pay-off your case prior to the thirty-sixth month, please be advised that your Trustee will request that you pay 100% to your general unsecured creditors regardless of the percent noted in your confirmed plan.

SECTION IV

YOU AND YOUR CREDITORS

A. Will your creditors continue to call?

All the creditors in your plan are under an automatic stay, which prohibits them from contacting you. In the event you are contacted, you may refer them to your attorney and give them your Chapter 13 case number and Trustee's name.

B. What to do if you forgot to list a creditor.

Immediately contact your attorney if you forgot to list a creditor on your original documents. You must file amended documents to add the forgotten creditor.

C. How and when will your creditors be paid?

Your payments to the Trustee are used to pay your creditors, your attorney (if all his/her fees were not paid up front) and your Trustee fees. Creditors fall into three basic categories: secured, priority, and general unsecured. Generally, the Trustee pays your attorney and all secured creditors first, then your priority creditors, and finally your general unsecured creditors. The Trustee takes a small percentage based fee upon each disbursement.

Confirmation is the approval of the terms of your plan by your Trustee. Disbursements to your creditors will not begin until your case is confirmed. If your Trustee or a creditor objects to your proposed plan, the matter may be heard by a bankruptcy judge who will make the final decision regarding the objection. Prior to the confirmation of your case, all of the money you pay into the plan is held in trust. If you are unable to confirm your plan, your case cannot go forward. You may be given a chance to revise your plan to meet the concerns of the opposing parties. If you are unable to do so, your case will be dismissed. See section V, part D, regarding the dismissal of a case.