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A.         What do I do if I need to refinance or purchase a vehicle or home while I am in my Chapter 13?

            

                 We understand that things happen and the law permits, under certain circumstances, use of credit while in a chapter 13.  If you need to refinance or purchase a vehicle or any other item using credit during your bankruptcy, you must contact your attorney immediately. Your attorney must determine whether or not your request complies with local rules and guidelines and submit the appropriate motion and supporting documents to the Trustee and/or court for a bankruptcy judge’s approval. Pursuing credit in excess of $1,000.00 without court permission may jeopardize your Chapter 13 case and could lead to a dismissal of your case.

 

B.         May I sell my property while I am in my Chapter 13?

 

             All your property, almost without exception, is considered part of your bankruptcy estate. You cannot sell any major part of your estate without permission from the court. Your attorney must submit the appropriate motion and supporting documents to the Trustee and/or the court for a bankruptcy judge’s approval.

 

C.         I can’t make my payment this month OR I’ve received a delinquency letter.  Can I make payment arrangements?

 

                  The Trustee cannot make payment arrangements. However, what are you able to pay and when? All I can do is make a note in your case regarding this call. I cannot guarantee that no delinquency action will be taken on your case. The best thing you  can do is contact your attorney if you haven’t done so already.

 

D.         What do I do if I get behind in my plan payments?

 

             If you become delinquent in your plan payments, contact your attorney immediately. Please do not call the Trustee’s office. The Trustee cannot make arrangements with you regarding the delinquent payments. If you will not be able to cure the delinquency you have incurred, your attorney may submit a motion to modify your plan to the court, and set a hearing date for the matter to go before a bankruptcy judge.

 

E.          What happens if I receive a motion to dismiss my case?

 

             The Trustee may set a hearing for a motion to dismiss your case for many reasons. If you become delinquent in your plan payments, or fail to cooperate with the Trustee’s office in any number of ways, you may receive a notice in the mail to appear before a bankruptcy judge.

             Immediately call your attorney if you receive a notice of a motion to dismiss. It is imperative that you address the matter quickly in order to avoid a dismissal of your bankruptcy.

 

F.          What does it mean if my case is dismissed?

 

If your case is dismissed, you will no longer be protected from your creditors by the automatic stay. The stay will be lifted, and your creditors will resume recovery procedures on the debts owed to them. Your creditors may add interest and penalties to the amount owed to them that were waived while your Chapter 13 plan was active.

If your case is dismissed prior to confirmation, the Trustee is entitled to fees incurred in the administration of your case. Your attorney may also be entitled to fees. Any allowed fees will be paid from the money you paid to the Trustee for your plan.  In addition, disbursements may have been made to your mortgage creditor and/or other secured creditors entitled to adequate protection. Any remaining funds, after the previously mentioned allowed fees are paid, will be returned to you upon the closing of your case.

 

G.         What happens to debts I owe that are not paid-in-full during my bankruptcy?

 

             During your bankruptcy, some creditors may not receive the entire amount originally owed to them. Any remaining amounts owed to your unsecured creditors at the end of your bankruptcy may be discharged upon the completion of your case unless they are non-dischargeable. Creditors with dischargeable debts cannot resume collection against you on these debts.

             Some debts in your plan may not be discharged unless you have paid them in full. Please consult your attorney for further information on non-dischargeable debts.

 

H.         What happens when I am in the last scheduled month of my plan?

 

             Please refer to section III, part I, regarding your plan length or commitment period. When you believe you have reached what was originally scheduled to be your last month in the plan, you should expect the following:

 

1)          When calling the Trustee’s office to confirm the status of your case, you will be told one of two things:

 

Your case appears to be paid-in-full.  However, a thorough audit must be completed before the case is closed and a discharge is entered.

 

Please continue to make your plan payment until the audit has been completed on your case.

 

2)   The Trustee is responsible for the accounting in your case, and he must take the time necessary to make certain it is accurate. This may cause a slight delay in the closing of your case. You may be advised to make additional payments to the Trustee’s office until the auditing of your case is complete. If you have a wage order in effect, it may not stop until the Trustee’s accounting of your case has been completed. Your attorney will notify your employer in writing to stop your payroll deduction. If you over-pay the Trustee, the money will be returned to you as soon as possible.     

 

If you have further questions regarding the completion of your case, please contact your attorney.

 

I.           What will happen when my Plan is complete?

 

             Upon the closing of your case you will be advised, if the Trustee has been making on-going payments on your mortgage, that you must begin making those payments yourself and when to commence doing so.

 

             When the Trustee has verified that all your creditors have been paid according to the terms of your confirmed plan and that all checks issued in the case have been cashed, he will submit a Trustee’s Final Report and Account to the court with copies forwarded to you and your attorney.  Creditors will receive a Summary of Trustee’s Final Report and Account and have 30 days to object.  In addition, written notice to the holder of a claim for a domestic support obligation as well as the State child support agency for that creditor will be sent providing the following information:  the granting of the discharge; your last recent known address; your last recent known employer name and address; and the name of each creditor that holds a claim that is not discharged under paragraph (2) or (4) of §523(a) or was reaffirmed by you under section 524(c).   This process could take four to six months from receipt and subsequent disbursement of your last payment to receipt of your discharge.  Every document you receive during the course of your bankruptcy is important, but the Trustee’s Final Report and Accounting and your Discharge are the most important. Keep them for your records as proof of your discharge from Chapter 13. In order to obtain credit after your bankruptcy is discharged, some companies may require a copy of your discharge and final report.