1) I understand I must make a payment each month to the Trustee. How do I do that?
2) Who is the Trustee anyway?
3) My
Plan and confirmation order says I must send copies of my tax returns
and any tax refunds to the Trustee while I'm in Chapter 13. Does the
Trustee really want these?
4) My
confirmation order also says that I must report to the Trustee if my
actual or projected gross income goes up 10%...could you explain that?
And what if I take money from my retirement fund or get extra money
that’s not from my job?
5) Do
I have to list all my creditors on my papers? For example, my parents
loaned me some money before the bankruptcy. I didn't want to list them
because I am embarrassed and don't want them to know this Chapter 13 is
happening.
6) O.K.
...I added my parents and a couple other creditors I had forgotten on
my bankruptcy papers. But this collection agency that I listed keeps
calling and threatens to garnish my wages. I thought this would all
stop when I filed. What can I do?
7) What happens if I miss payments to the Trustee because of an emergency?
8) May I incur credit during my Chapter 13? What if my car breaks down and I need a new one...?
9) My
spouse and I have been talking about selling our house and buying
another while we are in our Chapter 13. Is there anything special we
must do?
10) How can I find out how my plan is progressing?
11) My attorney said my plan payments would last for at least 36 months.
When should I stop making payments?
12) May I make larger payments to the Trustee and complete my case early?
13) Well, I'm about to make my last payment. I heard that now I get a discharge. What does that mean and how long does it take?
You must make your payments to the Trustee in the
amounts as described in Paragraph 1 of your plan. In most cases the
court will order your employer to forward your required payments
directly from your paycheck to the Trustee’s bank which is located in
Memphis, Tennessee. Sometimes it takes a few weeks for that paycheck
deduction to take effect, SO……. REMEMBER, until those deductions are
being made by your employer, YOU have the obligation to make sure that
payments are made directly to the bank. We have included in the back of
this book a number of address stickers for you to use to insure any
payments you must make yourself reach the bank correctly. Be sure to
watch your pay-stub. If there is a delay in getting the pay roll
deduction started or if your employer for whatever reason does not
deduct a payment, you need to make it directly to the Trustee until the
paycheck deduction takes effect or is corrected. The amount of your
payment may change, so be sure to check your individual plan so that
you are prepared for any payment changes. If you have to make any plan
payments directly to the Trustee’s bank, please note the following:
THE TRUSTEE'S BANK WILL NOT ACCEPT PERSONAL CHECKS.
DO NOT MAIL CASH!!
If you have to pay directly, the Trustee’ bank can only accept Money
Orders or Cashiers Checks, which must include: (1) your NAME
(2) your ADDRESS and
(3) your CHAPTER 13 CASE NUMBER (on the front of this book).
Please make all direct payments payable to:
Brian Lynch, Trustee And mail them to:
Brian Lynch, Trustee P.O. Box 420 Memphis, Tennessee 38101-0420
Remember: The Trustee will not send you or your employer a monthly
reminder. It is up to you to make sure your payments are getting to the
Trustee on time.
All Chapter 13 cases have a Trustee.
He is responsible for the overall administration of your case. In all
cases in Northern Oregon,
the Trustee is Brian Lynch. He has approximately
5,000 active files in addition to yours. The Trustee's duties are found
in the
Bankruptcy Code. They include, at a minimum,
reviewing your bankruptcy petition to ensure that it is complete and
accurate; determining your ability to make payments and whether your
Chapter 13 plan will be successful as proposed; conducting the first
meeting of creditors and appearing at other hearings in your case;
monitoring the progress of your case; collecting your payments and
paying creditors according to the plan; recovering improper payments
made before your filing; providing information about your case to those
who are authorized and have a need to know; and most importantly,
assisting you in the performance of your plan.
The Trustee’s address is:
1300 SW Fifth Ave., Suite 1700
Portland, Oregon 97201
The Trustee’s phone and fax numbers are: (503) 972-6300 PHONE (503)
972-6313 FAX
If, for any reason, you change your address while you are in Chapter
13, you MUST notify BOTH the Trustee’s office and the Bankruptcy Court.
REMEMBER: the Trustee cannot give you any legal advice. If you need
legal advice, you need to contact your attorney.
The Trustee’s Office Hours Are – 9am to 12 noon - 1pm to 4pm (closed
for lunch)
The Judge’s Order approving your Chapter 13 plan says
that you must submit signed and dated COPIES of BOTH your STATE and
FEDERAL TAX RETURN FORMS to the Trustee every year during your plan
whether you get a refund or not. Send your tax returns and any other
documents other than your plan payments to:
Brian Lynch, Trustee
1300 SW Fifth, Suite 1700
Portland, OR 97201
DO NOT SEND ORIGINALS! Please send these copies to the Trustee
immediately after you file the returns. The Trustee will check the
returns to see if your gross income has increased and/or if you are
entitled to receive a tax refund.
REMEMBER: You will not successfully finish your plan unless you
complete this requirement!
Your Chapter 13 plan requires you to pay your net tax refunds each year
to the Trustee (usually for the first 3 years). If you have a tax
refund, the entire refund must be sent to the Trustee unless, in that
same year, you also owe taxes to a different income taxing authority.
For example, if you receive a $500 Federal tax refund and that same
year you owe the State $300, you would only need to send the Trustee
the net of $200. (just endorse the checks over to Brian Lynch or send a
money order or cashier’s check for the net amount and a note showing
the math and send it to the Trustee’s bank just like you would send a
plan payment) You cannot avoid paying your refund to the Trustee by
applying your refund to next year’s tax obligation, agreeing that your
refund can be kept by the IRS for some reason or used as a donation.
REMEMBER: You will not successfully finish your plan unless you
complete this requirement!
The Judge’s Order approving your plan says that you are
required to report to the Trustee if and when your gross income
increases more than 10% from the amount originally reported on your
Schedule I that was filed with your bankruptcy papers. If that happens,
you should contact your attorney to review all of your income and
expenses and file amended schedules to reflect the changes.
You are also required to inform the Trustee if and when you get married
during the time you are in Chapter 13.
The Judge’s Order approving your plan also says that if you or your
spouse take a retirement fund distribution or have the right to receive
any money exceeding $2500 during your plan, you must inform the
Trustee’s office. It also says that you must keep any of that money
until you either get permission from the Trustee to spend it, or notify
all your creditors that you propose to spend it. Taking a retirement
distribution during the plan could turn your otherwise exempt property
into disposable income. If that happens, the amount of the retirement
distribution may have to be paid to your creditors before you get your
discharge. BE SURE TO TALK TO YOUR ATTORNEY BEFORE YOU ACT.
REMEMBER: Everyone in Chapter 13 must pay their ongoing tax obligations
during the life of the plan. This obligation includes any taxes owed as
a result of any increase in income.
Unfortunately, you are required by law to list all of
your liabilities (debts) and assets (your possessions) in your
bankruptcy papers. The petition you signed, under oath, says that you
have done so. Nobody can pick and choose who gets listed. If you forgot
to list someone to whom you owe money, that debt will probably not be
eliminated by your bankruptcy. If you forgot to list some of your
property it could cause big problems for you if you don’t change your
bankruptcy papers. You can add creditors or property you forgot by
amending your schedules. This requires a small fee to the bankruptcy
court. If you forgot a creditor or some property, be sure to inform
your attorney at once.
REMEMBER: The Bankruptcy Code prohibits you from favoring one creditor
over another. This means you cannot pay a creditor "on the side" unless
it is specifically allowed under your plan. In some cases, your plan
may instruct you to pay secured creditors directly (car loans and
mortgage payments are good examples). However, under no circumstances
should you be paying any creditor unless your plan says you can. If you
have any questions about this, talk to your attorney before you make
any of those kinds of payments.
The filing of your bankruptcy papers should
automatically stop any collection efforts once the
creditor is notified.
Most creditors know this and will stop
collection efforts immediately. It usually takes about 30 days for a
creditor to get officially notified.
Occasionally, some creditors do not get the word or may still try to
muscle their way in for more money than they are allowed to receive. If
you are contacted, first check to be sure that creditor has been listed
on your bankruptcy papers. If they weren't listed, see question #5
above. If they were listed, go on...
REMEMBER: You do not have to discuss the matter with a creditor who
contacts you. It is best to simply tell them you are in Chapter 13,
give them your case number and attorney's name. Then politely tell them
not to call you again. If they persist, tell them they are in violation
of a court order and you want them to stop. Be sure to keep a record of
all calls and forward it to your attorney for action.
You must not miss any payments to the Trustee unless it
is permitted by the bankruptcy judge. When you file your Chapter 13,
your creditors are prohibited from taking any action against you. In
exchange for that protection, you must complete your obligations under
the plan. One of those obligations is making your payments to the
Trustee on time. If you wish your Chapter 13 to be successful, you
cannot have your employer stop making the payroll deductions. If you
miss payments, the Trustee cannot pay your creditors as called for by
your plan and the Trustee is obligated to file papers with the
Bankruptcy Court asking that your case be dismissed. If your case is
dismissed, your creditors will be notified and may resume collection
against you. If you have a change in your circumstances such as an
unforeseen emergency, you should notify your attorney at once. Your
attorney can re-evaluate your financial situation and, if appropriate,
change your plan to reflect the different circumstances. This process
can take several weeks, so be sure to contact your attorney immediately
if you foresee any problem making your payments. REMEMBER: The Trustee
does not have the power to excuse any payments. Any change in payments
must be approved by your Bankruptcy Judge.
Your Confirmation Order, signed by the Bankruptcy Judge
approving your plan, states that you may not incur any credit
obligations during the life of your plan without the Trustee's written
consent. The only time you can act without the Trustee's written
consent would be: (1) an emergency, or (2) ordinary expenses for a
business approved in your plan.
Any request for credit must be approved by the Trustee in writing
before you obligate yourself in any way. The most common credit
obligation you may wish to incur is for the purchase of a car. Be sure
to contact your attorney if you must buy a car or trade in your old
one. Do not let a car dealer talk you into anything before your
attorney has had a chance to get involved. The Trustee regularly
approves requests to finance new vehicles, so long as you and your
attorney follow the proper procedure. That procedure requires that you
supply the Trustee with some basic information on a form provided by
his office and that you get Trustee approval before you commit to any
obligation. REMEMBER: Taking on any new credit obligations could
jeopardize your plan and failure to get permission could result in your
case being dismissed. AND, not paying your tax obligations as they
become due is considered taking on new credit. Be sure to pay whatever
tax obligations you have during your plan.
Your Confirmation Order requires
you to inform the Trustee and your creditors
of the sale, lease, encumbrance, disposal or purchase of any real
property or any personal property with a value over $10,000. Informing
the Trustee and creditors can be tricky and may have
unexpected consequences if not done properly. It is very important you
learn and understand all the possibilities before you take any steps
involving the sale or acquisition of any property. You should contact
your attorney well before you list or advertise your property or
purchase property and discuss what you want to do. The Trustee will
require specific information before any permission to buy or sell is
given and selling or purchasing property sometimes requires a court
order that usually takes about 30 days to obtain. Find out what is
required BEFORE you commit to any purchase or sale. REMEMBER: Selling,
buying or improving property is tricky when you are in Chapter 13. Talk
to your attorney first!
REMEMBER: You cannot incur any credit obligations while in Chapter 13
without first obtaining the Trustee’s written consent. Visit our Escrow
page for more information.
In January every year, the Trustee will send you a
complete record of all receipts and disbursements. It will tell you
exactly how much money the Trustee has received from you and how much
and to whom payments have been made.
You may also request a progress report if you need one. This request
must be in writing and sent to the Trustee's office at the address
shown in the answer to question #2. It will take approximately a week
to 10 days to respond. The progress report will give you a summary of
your case to date. If you want to know how much it would take to pay
off your case, you should send a request for that information to the
Trustee’s office in writing.
REMEMBER: You cannot pay off your case before you have been making plan
payments for at least 36 months and have completed all the requirements
of paragraph 1 of your plan, UNLESS you pay all your creditors 100%.
You or your employer should continue making payments
until the Trustee (or your attorney) specifically tells you to stop.
The Trustee will inform your employer when the payroll deductions are
no longer necessary and should stop. Depending on whether your income
places you below or above Oregon's median income level, you may be
required to make payments to the Trustee for at least 36 months and
perhaps as long as 60 months. It can be difficult to predict the exact
outcome of your case when it is filed. You should ask your attorney
whether you are below or above the median. That answer will tell you
whether you must continue payments for a minimum of 36 months or
whether you must continue for the full 60 months.
Don't worry about overpaying. Once your case has undergone final audit,
the Trustee will refund any overpayment you might have made. It is
better to overpay a little than to underpay and risk having your case
dismissed when it is nearing completion.
The Bankruptcy Code requires you to send all your
disposable income to the Trustee for at least 3 years and in some cases
for up to 5 years. Your disposable income is the amount left over after
you subtract your reasonable and necessary living expenses from your
net income. This amount is shown as your payments set out in paragraph
1 of your plan. Sometimes it will take more than 3 years to complete
your plan. There is, however, one exception to this 3-year rule. You
may pay off your plan before 3 years if you pay all creditors who have
filed claims 100%. If you can't pay the full 100%, you must make your
plan payments for at least 3 years before you are eligible for
discharge. (See question # 13) You can ask to pay off your plan after 3
years only if you can pay 100% of what is due to the creditors who must
be paid during the life of the plan. These include secured creditors;
priority tax claims and sometimes back child support.
Paying off your plan early can be complicated and you should check with
your attorney before you contact the Trustee.
Making larger payments to the Trustee is required if your income
increases (see answer to question # 4). When the Trustee receives
unexpected extra payments, he will wonder where you got the extra
money. So, if you want to make larger payments because you got a big
raise amounting to more than 10% of what you originally reported as
your income, you should inform the Trustee of that fact in writing when
you begin sending in more money. You will, however, still be required
to make payments to the Trustee for 3 years unless you can pay all your
creditors 100%. (See above). REMEMBER: Do not borrow money or incur
credit to make bigger payments to the Trustee hoping that you can
complete your plan before 3 years. You filed a Chapter 13 plan to
eliminate your debts and get a "fresh start". Your best bet is to make
your scheduled payments on time using your disposable income.
A discharge is your biggest goal. The discharge order is
a document prepared by the Bankruptcy Court and signed by your judge.
It means you have completed the requirements under your plan. Most, if
not all, of the creditors you listed may never again contact you about
those debts. If you have some nondischargeable debts, such as child
support or student loans that have not been paid in full during your
plan, those creditors may contact you again about payments of those
debts. The Trustee must audit and review your case before the
Bankruptcy Court will issue the discharge. This normally takes about 60
days. During that period the Trustee double checks your payments and
reviews your case to ensure that you have done everything required from
his standpoint. Then the Trustee notifies your Bankruptcy Judge and the
Court will then issue your discharge in approximately 30 days.
|
