How do I file for bankruptcy?
A bankruptcy case begins with the filing of a petition. You must also file a statement of your assets and liabilities, and schedules listing your creditors. If you choose to file a bankruptcy petition without the assistance of an attorney, you can obtain the required forms at most stationary stores or at uscourts.gov.
Is there a charge?
There is a $310.00 charge for filing a Chapter 13 Bankruptcy case.
What is Chapter 13 Bankruptcy?
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 pay them back as much as you can. People who file Chapter 13 cases are commonly referred to as "debtors". A Chapter 13 plan may not exceed more than 60 months. Only an individual or married couple with regular income can file for relief under Chapter 13.
Who is my Chapter 13 Standing Trustee?
Laurie K. Weatherford is the trustee in your case. The trustee represents the bankruptcy estate. The trustee is not your legal representative nor is the trustee the legal representative for any creditor. The primary function of the trustee is to administer the bankruptcy estate, i.e., oversee timely receipt of your plan payments and make prompt and accurate payments to your creditors. The trustee also provides information about Chapter 13 cases to debtors, creditors and to the court. Neither the trustee nor any member of her staff may give you legal advice.
What are my Chapter 13 costs?
The trustee's costs for administering your case are paid from the funds you pay into your plan. The United States Code sets the maximum charge at 10 per cent of the amount disbursed in the case. The percentage fee will vary during the life of your case, but the percentage is generally less than 10 per cent and will not exceed 10 per cent at any time. If your case is dismissed or converted to another chapter prior to confirmation, the trustee will return to you all funds on hand, less court approved attorney's fees and court approved trustee administrative fees.
Am I required to have an attorney?
While use of an attorney is strongly encouraged, it is not required. You may choose to proceed on your own without assistance from counsel. If this is your decision, you should understand that you will be fully responsible for representing yourself and will be expected to comply with the law and properly file all documents and motions.
How do I make my plan payments?
Payments made by you must be in the form of a certified, cashier's or bank check or a money order. We DO NOT ACCEPT personal checks, cash or internet bank checks. If you send us an incorrect form of payment it will be returned to you. Please make all payments payable to Laurie K. Weatherford, Trustee and send them to our lockbox address: P.O. Box 1103, Memphis, TN 38101-1103.
We are no longer permitted to accept payments at our office, if you send your payment directly to our office it will be returned to you. Once you send your payment to the lockbox it takes approximately 3 to 5 business days before it is posted by our office. Please keep a log of the payments you make to our office. Every 6 months you will receive a report of all payments posted to your case. If a payment is missing please contact us immediately and let us know the receipt number so that we can trace it. All payments are due on or before the first business day of each and every calendar month. You may send in more than your monthly payment, but you still must make the next months payment. We will not apply extra payments to preceding months. If you do not make your monthly payments, your case may be subject to dismissal. When you submit your payment to us, you must include your monthly mortgage payment unless the Court has granted a Motion to Pay Mortgage Payment Outside of the Plan. This is only allowed if the mortgage is current at the time of filing and the payment is being automatically drafted from your checking account prior to the time of filing.
What is a Motion to Vacate Stay?
A Motion to Vacate Stay is a formal request by one of your creditors to eliminate the protections of the Bankruptcy. When a Court grants this request, the stay is cancelled. Your creditors will then be able to enforce their claims & resume collection efforts against you in State Court. Motions for relief must be served on Debtor & Debtor's Attorney. Do not ignore a Motion to Vacate Stay. If you do, the Court may grant the motion as unopposed. The most common reason for a Creditor to file a Motion to Vacate Stay is when the debtor becomes delinquent in post-petition outside of plan payments. In the case of a car loan, a motion may also be brought if the vehicle in question is not insured.
What is a Wage Order?
Some debtors either voluntarily or by suggestion of the Chapter 13 Standing Trustee choose a Wage Deduction as a more convenient way to fund their Chapter 13 Bankruptcy. A Wage Deduction Order, signed by the Bankruptcy Judge, will be issued to your employer. Your employer will then make your plan payments for you by deducting the total monthly payment from your pay and sending that money to the Trustee's lockbox address. This money will never be deducted in one lump sum. Amounts will always be deducted in equal installments determined by the frequency of your pay schedules (i.e. bi-weekly, semi-monthly or weekly).
Debtor Responsibility: It is essential that you make direct payments to the Trustee's lockbox until you actually see the plan payments being deducted from your paycheck. It is also your responsibility to continue with the plan payments in the event there are missed days from your place of employment due to vacation, illness or termination.
Change of Job: If you change jobs, notify your attorney and the Trustee's office immediately. This notification must be made in writing. A new Wage Deduction order must be prepared and sent to the new employer. If there is a delay between the time payments through your old employer cease and payments through your new employer begin, you are responsible for making direct payments to the Trustee.
Employer Responsibility: It is a violation for an employer to discharge an employee or take any other disciplinary action because of a Wage Deduction Order. Most employers have been very cooperative in assisting with payroll deductions for employees involved in Chapter 13 Bankruptcy. If your employer has any questions or concerns with wage deductions, advise the Trustee's Office and we will contact your employer.
What takes place at the Confirmation Hearing?
At the Confirmation hearing, your Judge will determine if your plan should be approved or your case should be dismissed. The Trustee will recommend confirmation (approval) of your plan if the Trustee believes that the plan complies with the legal requirements for Chapter 13 Cases. If the Trustee determines that the plan is deficient, your attorney will be informed of the deficiencies by letter or e-mail approximately two weeks before the Confirmation Hearing. Copies of any revised or amended documents must be received by the Trustee at least three (3) days prior to the Confirmation Hearing. Your attorney must appear at any Confirmation Hearing. If you are proceeding without an attorney, you must be present.
What takes place at the 341(a) Meeting of Creditors?
The 341(a) Meeting of Creditors is a hearing where the Trustee or the Trustee's Staff Attorney will ask you questions, under oath, about your assets, your liabilities and the feasibility of your plan. In other words, everyone you owe money to, everything that you own, all sources of your income, the reasonableness of all budgeted expenses and whether your proposed plan payments are sufficient to pay off your creditors during the term you propose. Any creditors who appear will also be given an opportunity to ask questions. This meeting will be recorded. Copies of the transcript may be requested from the Trustee's Office for a fee. You and your attorney are required to attend the 341(a) meeting. If a petition was filed by a husband and wife, both must be present. There are no accommodations for children. If you fail to appear at the 341(a) meeting, your case may be dismissed. If you cannot come on the scheduled date, you must request a new date from the Trustee's office three (3) days before the date you are to appear and must have a valid reason for your request. After the second date, if you fail to appear your case could be dismissed. You should bring with you: (1) recent pay stub, (2) picture I.D. (3) proof of social security number and (4) market analysis on any real estate.
What is a Business Case?
Debtors who are self-employed as a sole proprietorship, report income as independent contractors, or earn a salary from a partnership or corporation they have an ownership interest in, are considered to be business cases by the Trustee. As a result, there are additional reporting requirements placed upon these Debtors under the Bankruptcy Code. The debtor is required to submit to the Trustee the following:
Proof of current insurance - business liability, workers compensation if there are employees or uninsured subcontractors, liquor liability if the business uses a liquor license, and automotive insurance for any business vehicles.
License - proof of current license if the business is required to have one to operate. Examples include day care centers, physicians, pesticide applicants, etc.
Income verification - copy of the previous year's Federal tax return for the individual and business, as well as monthly business reports (profit and loss statements, copies of business bank account statements, copies of canceled checks) for the current year through confirmation. Monthly business report forms are available from the Trustee's web site.
If a non-debtor spouse is self employed, income verification for that spouse's business is required.
How are my creditors paid?
The money you pay to the Trustee is used to pay your creditors, your attorney's fees, if any, and the Trustee's fees. Creditors have 90 days from the first meeting of creditors to file a proof of claim with the U.S. Bankruptcy Court. Government agencies have 180 days from the first meeting of creditors to file a proof of claim. The Trustee can only pay those creditors who file a proof of claim with the U.S. Bankruptcy Court.
Creditors fall into three basic categories:
Priority, e.g., income taxes, past due child support, and real estate taxes;
Secured, e.g., mortgages and auto loans, and;
Unsecured, e.g., credit cards and medical expenses.
Unless your plan specifically provides for a different order of distribution, the Trustee will pay the unpaid balance owed to your attorney first; then the priority creditors are paid in full, the secured creditors will then be paid in full, and finally, the unsecured creditors are paid. Payments to your creditors will begin after the Bankruptcy Court has confirmed your case.
What happens if I forget to list a creditor in my petition?
Creditors not listed when you file your case may cause problems. There are two kinds of unlisted creditors; those you owed money when you first filed your plan and forgot to list ("pre-petition creditors"), and those creditors who have a bill that was incurred after you filed your plan ("post-petition creditors").
If either circumstance does occur, notify your attorney immediately so that he can evaluate the situation and file the appropriate paperwork with the U.S. Bankruptcy Court.
Can I pay off my Chapter 13 plan early?
If you want to pay your Chapter 13 plan off early, you must first write the Trustee's office requesting a balance to complete letter. This request must be in writing and may be faxed, mailed, or e-mailed to this office. Before you are given a balance to complete letter, this office must review your Chapter 13 case. This reviewing process includes a review of the order confirming plan, consent orders, if any, and all proof of claims filed with the Bankruptcy Court. Since this review can be a lengthy process, a balance to complete letter will be provided to you in five to ten business days.
What happens if I lose my job?
If there is any disruption in the normally scheduled payments required under your Chapter 13 Plan (due to illness, layoff, job termination, etc.) please contact your attorney immediately. The Trustee's Office conducts a monthly review of all cases to determine which are in default, and from this review, prepares a list of cases to dismiss for nonpayment. The Trustee's Office will attempt to work with you to rearrange your payments temporarily to avoid dismissal of your case.
Can I sell or refinance my property during the Bankruptcy?
You cannot dispose of any of your property, including land, without obtaining permission from the Court. If you sell any of your property for a profit, some of that 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 and your plan could be dismissed. Please remember that any real estate broker you wish to utilize must also be approved by Order of the Court. If you have entered a Contract to Sell any of your property, you should immediately contact your attorney, so he or she can file an appropriate motion with the Court.
What happens when I complete my case?
When all of the creditors in your chapter 13 plan have been paid, your case has been completed. Once all of the checks that have been sent out to your creditors have been cashed and clear with the bank, a final report will be created. However, it may take up to 4 months from the date your case is completed for all of the checks to be cashed and clear with the bank. Occasionally, one of your creditors will not cash a check and we will have to cancel it. Once we cancel the check, we send the funds to the United States Bankruptcy Court Registry where the creditor will need to file a motion to claim them. Once the Court Registry deposits those funds, we will then issue the final report. A copy of the final report will be sent to you and a copy will be electronically filed with the Bankruptcy Court. The Bankruptcy Court will process the final report and within 3 to 5 business days, they will issue your discharge paperwork to you and your creditors. The final report explains to you how much you sent to our office for your case and how those funds were disbursed to your creditors, attorney and trustee. The Discharge Order is the document that lets you and your creditors know that the case has been approved as completed by the Bankruptcy Court.