THE FOLLOWING ANSWERS MOST OF THE QUESTIONS THAT COME UP WHILE UNDER CHAPTER 13. READ IN FULL WHEN YOU START YOUR CASE. THEN REFER TO IT LATER ON WHEN YOU NEED AN ANSWER.INDEX 1. WHO MAY FILE CHAPTER 13 2. YOUR CASE NUMBER 3. PAYMENTS 4. COURTS JURISDICTION OF WAGE ORDERS 5. CONTACT BY CREDITORS 6. BALANCE DUE CREDITORS 7. CLAIMS OF CREDITORS 8. CREDITORS NOT LISTED 9. HOW CREDITORS ARE PAID 10. COSIGNERS AND CO MAKERS 11. CREDIT CARDS AND CHARGE ACCOUNTS 12. PERMISSION FOR CREDIT 13. OBTAINING CREDIT WITHOUT PERMISSION 14. SELLING PROPERTY 15. REAL ESTATE DEBTS 16. CHECKS HELD BY OTHERS 17. PROBLEMS WITH EMPLOYERS BECAUSE OF CHAPTER 13 18. DISCHARGE 19. REQUEST FOR DISMISSAL BY DEBTOR 20. CREDIT RATING 21. INCOME TAX INFORMATION 22. CONTACT BY CREDITORS AFTER COMPLETION OF CHAPTER 13 23. REAFFIRMATION OF DEBTS 24. CHANGE OF ADDRESS OR EMPLOYMENT 25. WHAT YOUR PAYMENTS INCLUDE 26. ATTORNEY FEE
WHO MAY FILE CHAPTER 13
Chapter 13 is for individuals with a regular income who earn enough to pay their living expenses as well as their debts and who have voluntarily come under the protection of the court.
YOUR CASE NUMBER
Your Chapter 13 office phone number is (334) 262-8371. The office is open five days a week. Monday through Friday, from 8:00 A.M. to 4:45 P.M. except on federal holidays. Do not feel that you have to talk personally with the Trustee. The staff is familiar with the policies and guidelines under Chapter 13 and is well qualified to discuss with you any problems or questions that may arise. Give your case number to the service assistant answering the phone and they will provide you the assistance you require.
PAYMENTS
Most of our Chapter 13 payments are made through payroll deductions with the debtors place of employment. This payroll deduction will be sent to your employer in about 4 weeks. Until the deductions begin, you must make payments. Only in unusual circumstances does the court allow payments to be made by the debtor. Any payments made by you personally are to be made by ONLY:
1. Money Orders 2. Cashier's Checks (Note: Neither cash nor personal checks will be accepted by mail or the trustee's office). Each payment should include:
1. Your Name 2. Your Address 3. Your Chapter 13 Case Number
Each of your payments must be made by the due date. Failure to make your payments will result in your case being dismissed. Notify the Trustee's office in writing of any reason which will prevent you from making them. The law requires payments to begin within 30 days after the case is filed. Failure to do so will result in your case being dismissed at the confirmation hearing.
COURTS JURISDICTION OF WAGE ORDERS
If an order is issued to your employer, you and your employer should understand that such an order is not a garnishment. A garnishment can come only from someone to whom you owe money, and you do not owe the court any money. The court is simply carrying out its duty to administer the plan you voluntarily filed and in which you gave the court exclusive jurisdiction over your future pay during the course of the plan. Should any employer be inclined to treat such an order as a garnishment, let your attorney know and he will try to get your employer to understand that you are making an effort to pay your just debts instead of not paying them. We usually find that employers, after an explanation, understand and think more highly of an employee for trying to pay his bills.
CONTACT BY CREDITORS
All the creditors you listed on your Chapter 13 case are under a restraining order which prohibits them from bothering you in any way. If you get notices in the mail from creditors, just send them to your attorney. He/she will take care of them. Delinquent notices need not cause any great concern. But if you get a more personal, direct contact from a creditor, such as a telephone call, a personal letter, a summons, or a visit in person, you should immediately inform them that you are under Chapter 13. Give them the name and address of your attorney, get the name of the party contacting you and report it to your attorney. Under no circumstances are you to discuss the debt with them in any manner. Please be certain to get the name of the party it you are contacted personally. Your attorney will follow up on such a call and the name of the party making the contact is very important.
BALANCE DUE CREDITORS
You may not deal with a creditor just as they may not deal with you. You cannot pick and choose some particular creditor and pay him "on the side" as all debts must be dealt with through the court only. Any payment made by you would be illegal and would have to be reserved by the court. All creditors included in your plan must be paid by the court and under the terms of the law, not anyone's personal desires. If you want to know how much you still owe a creditor, or all creditors, drop in and take a look at our record of your case. We get a new, up-to- date record once a month and you may see it at anytime.
CLAIMS OF CREDITORS
After you have been under the plan approximately four months, we will send you a complete list of every creditor who has filed a claim in your plan. Creditors have 90 days from the date of your meeting of creditors in which to file their claims. Any claim not filed within the time limit is a late claim and as such may be subject to an objection. We can pay only those claims which have been filed and are prohibited from paying anyone who did not file a claim. If you complete your plan, any claim that was not filed will be discharged unless the bankruptcy code indicates that it is non-dischargeable. If a creditor has not filed a claim you may file a claim on his behalf. A claims register showing each creditor and the amount filed will be mailed to you in about four months. If a creditor is listed incorrectly, you should contact your attorney immediately.
CREDITORS NOT LISTED
Creditors not listed by you when you filed can cause quite a few problems. There are two kinds of unlisted creditors: those you owed money to when you filed and forgot to list-we will them "unlisted creditors", and those creditors who have a bill that was incurred after you filed. We will call this type "post- petition creditors". If you find an unlisted creditor, one you owed but forgot to list, you must let your attorney know the details immediately. Your attorney will file an amendment to your petition and possibly amend your plan. Time is important here, so do not delay if one shows up. Post-petition creditors, those whose bills were incurred after you filed, are rare. As you know you are not to use credit while under Chapter 13, but doctors and various medical expenses can't always be avoided. When this happens, you should recognize you owe and bill and you should pay it, as it can't normally be added to your Chapter 13 case. There is an exception to this rule for certain debts which arise after you file your case. Under certain circumstances taxes, medical expenses, and debts which are necessary for your plan to work can be added later and paid through your case. You should contact your attorney if you think such a debt come has up. Remember: Your Trustee cannot and will not allow you to miss a Chapter 13 payment so that you can pay "new debts". Your old debts being paid through your case come first.
HOW CREDITORS ARE PAID
The money you pay to the Trustee is used to pay all expenses, including your attorney and your creditors. So that you will have some idea as to how the creditors are paid, you should also know that there are three basic types of claims: Secured, Priority and Unsecured. Generally, you can say that we pay secured claims first, then priority claims, then the unsecured. We do not pay anything on the unsecured claims until the all the secured claims and the priority claims are current in their monthly payments. Due to this, it could be several months until the first payment is made on unsecured claims.
COSIGNERS AND CO MAKERS
A cosigner, co maker or guarantor on any of your consumer debts is protected from contact by the creditor by Section 1301 "Co- debtor Stay". This stay protects them only if they did not receive any of the consideration for the plan. It also protects them only for the amount of the debt your plan proposed to pay. The order confirming your plan will state what percent will be paid on your unsecured debt. If that percentage is not %100 to the unsecured debt. If the cosigner, co maker or guarantor has given collateral for the loan, the creditor must request a hearing before the court in order to proceed against the co- signer's, co maker's or guarantor's property.
CREDIT CARDS AND CHARGE ACCOUNTS
The use of credit cards or charge accounts of any kind while under Chapter 13 is the use of credit and is strictly prohibited. This applies to any member of the family that is supported by the debtor under Chapter 13, whether they, themselves, are under the jurisdiction of the Court or not, as long as the party under Chapter 13 may be responsible for the debts. All charge cards must be turned in to the creditor or turned in to your attorney.
PERMISSION FOR CREDIT
The use of credit while under Chapter 13 is prohibited without the permission of the Trustee. The only exception to this is a medical emergency. If you find you must replace some necessary article by using credit, you should contact the Chapter 13 office. Permission is considered for necessary articles only and the amount of credit must be reasonable and within your means of payment.
OBTAINING CREDIT WITHOUT PERMISSION
You place your plan in serious jeopardy if you obtain credit without approval. The Chapter 13 office may file a motion to dismiss your case. You also cannot cosign notes.
SELLING PROPERTY
You cannot dispose of any of your property, including land, without giving your creditors notice and an opportunity to object. You should contact your attorney and advise him of the circumstances. If you sell any of your property for a profit, some of the profit may have to be applied to your Chapter 13 debts. If you dispose of your property without court authorization, the transaction may be set aside.
REAL ESTATE DEBTS
Any debts you owe that are secured by a mortgage on real property, or a contract for a mobile home, must usually be paid directly by you and cannot be paid through Chapter 13 unless the court specifically authorizes it. Payments like this are included in your budget when your plan is set up for you, and they are something you must take care of yourself. If, for any reason, you are not making your real estate or mobile home payments regularly, you should inform the Chapter 13 office immediately. These problems can usually be worked out more easily if they are reported before the account becomes delinquent. Problems concerning real property foreclosure and liens of creditors on real property are matters that should be discussed with your attorney. Remember: if you fall behind in your house or mobile home payments, you will be given only one chance to work on bringing the payments current. The court cannot allow you to continue to live in the property if you cannot or will not pay for it. Foreclosure will take place if you do not keep payments current.
CHECKS HELD BY OTHERS
A creditor may hold a check you wrote for cash or purchase of goods, etc. that was not honored by your bank. The holder of the check may join the plan as a creditor or prosecute the transaction as a crime. Giving a bad check is a criminal matter, and you may have to take care of this matter outside of the plan. The restraining order in your case does not stop a criminal prosecution.
PROBLEMS WITH EMPLOYER BECAUSE OF CHAPTER 13
Occasionally we find situations where an officer of a credit union exerts "pressure" on a borrower to the extent that the employee feels his job may be in jeopardy due to the filing of a Chapter 13. Such tactics are illegal in that they constitute an attempt to obtain creditor preference. Any such actions must be reported to your attorney immediately.
DISCHARGE
When you have successfully completed your plan payments, you will receive notice from the court about your discharge.
REQUEST FOR DISMISSAL BY DEBTOR
"Federal Bankruptcy Law" allows you to request that your Chapter 13 case be dismissed at any time. If you should desire to stop your case, get in touch with your attorney. However, you should understand that a dismissal will reactivate all unpaid or disputed debts, all interest, finance charges and late charges allowed by the court, and all debts of creditors who did not file their claims. In addition, you would be forced to deal with those creditors on their terms, not yours or the Court's. The request for dismissal of your plan must be in writing.
CREDIT RATING
Your credit rating during and after completion of Chapter 13 will be, as it is now and was in the past, the personal opinion of any credit grantor who looks at your record. A credit rating is not "A, B, or C" or "1, 2, or 3", it is a record of all your past credit performance. This record is made available to a credit grantor and he makes up his own mind, by his own standards, as to whether or not he wants to grant credit to you. Suits, collections, attachments, straight bankruptcy, credit counseling and Chapter 13 are indications, in one degree or another, of creditor problems. How such records are evaluated by any given credit grantor is impossible to say. After many years and hundreds of paid-in-full Chapter 13 cases in this area, we find a good many knowledgeable credit grantors looking with respect upon those who have paid in full under Chapter 13. Any credit record that has been blemished by a problem must be gradually rebuilt.
INCOME TAX INFORMATION
When it is time for you to file your yearly income tax return, you may want information from the Chapter 13 office as to who has been paid how much and what interest has been paid. This office is not in a position to advise you on how to file your return, or the amount of interest paid, but we will, upon request provide you with a copy of your report which should give you names of the creditors that received money. Only secured creditors should have any interest to report. You should contact the creditors by letter and request the information from them as to the amount of interest credited to your account during the year.
CONTACT BY CREDITORS AFTER COMPLETION OF CHAPTER 13
When a creditor has had his debt paid by Chapter 13, whether partially or in full, he should, and usually does, send the paid-in-full papers to you. Even if he fails to do this, it is not to significant since the official records of the court showing that your plan is completely paid would overrule any claim he might make for additional money. Should you receive any request for additional money after your plan is completed, contact your attorney.
REAFFIRMATION OF DEBTS
Occasionally, a Chapter 13 debtor wishes to or is asked to reaffirm a debt which has been discharged following the successful completion of a case. You do not have to reaffirm any discharged debts. Since reaffirmation violates the spirit of the bankruptcy laws, the court is required to approve any reaffirmation and can do so only after closely examining your reasons for wanting to reaffirm the debt. If a creditor has gotten you to reaffirm a debt without the court's approval, you cannot be forced to repay it.
CHANGE OF ADDRESS OR EMPLOYMENT
You are to notify the Trustee's office within 7 DAYS if any of the following occur: 1. If you move your residence, provide the Trustee with your new address and phone number in writing. 2. If your employer changes address, provide the Trustee with the new address and phone number in writing. 3. If you change jobs, provide the Trustee with the new company name, address and phone number in writing. 4. If you lose your job, notify the Trustee's office. Failure to accomplish any of the above may result in your having to return to court on a proposed dismissal hearing.
WHAT YOUR PAYMENTS INCLUDE
Make regular payments to the Trustee until you are told to stop. You will have to pay all claims, your attorneys fee, administrative expenses and court costs. The Trustee's office keeps accurate records and will know when you have completed your plan. After paying all you owe, you will be given a complete accounting of your case. If you have overpaid, you will receive a refund.
ATTORNEY FEE
You are paying your attorney through your plan to assist and advise you for the entire time you are in Court. In almost all cases, the attorney fee is paid through the Court ONLY. Any additional fee must be approved by the Court.