Frequently Asked Questions

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. It allows you to keep some or all of your property during the time you are paying your creditors back, and it permits you to modify some contract payments and interest rates. Your plan can eliminate late charges and penalties and allows you to extend payments on some of your debts.

IS MY CASE NUMBER IMPORTANT?

At the time your Chapter 13 petition was filed, the Bankruptcy Clerk assigned the case a number. This number is very important. You will need it whenever you write to the Trustee’s office or when you make a payment to the Trustee.

DO I NEED TO TELL YOU IF MY ADDRESS CHANGES?

You must keep us advised of your current mailing address for as long as you are under Chapter 13. The address on your petition will be used for all notices, correspondence, and reports. If your address changes, you must contact your attorney so that they can file the proper pleadings with the U.S Bankruptcy Court to change your address. If you do not have an attorney, please contact the U.S. Bankruptcy Court at (803)765-5436 about the pleadings required to change your address.

**OUR OFFICE CANNOT CHANGE YOUR ADDRESS IN OUR SYSTEM UNTIL THE PROPER PLEADINGS TO CHANGE YOUR ADDRESS HAVE BEEN FILED WITH THE U.S. BANKRUPTCY COURT**

WHAT DOES MY ATTORNEY DO?

Your attorney is one of the most important resources in connection with a successful Chapter 13 case. You should keep in contact with your attorney throughout the course of your Chapter 13 case. If you have any questions or your circumstances change, make your attorney aware of those facts. This will, to the maximum extent possible, assure the successful completion of your Chapter 13 plan.

Under the rules of the Bankruptcy Court, your attorney must continue to appear and represent you for as long as your case is active or until the judge permits your attorney to withdraw from your case. If you ever have a question concerning your case, a creditor, your rights, or your options, you should make it a rule to ask your attorney first. Be sure that you and your attorney have discussed fully whether additional legal services during your plan will cost you more money or whether the initial fee will cover all legal services. If you ever want to obtain a new attorney, an Order must be entered by the Court appointing a new attorney and relieving your prior attorney.

Some examples of your attorney’s responsibilities are to:

• Ensure that all secured debts are valid
• Handle disputes with your creditors
• Attend the meeting of creditors
• Appear at any other Court hearing in conjunction with your case
• Assist you in overcoming any obstacles that may arise during the course of your plan by filing any necessary documents

WHEN DO I HAVE TO MAKE MY FIRST PAYMENT?

Your first payment is due 30 days after you file your petition. If you are in the process of obtaining an order to deduct your Chapter 13 payments from your paycheck, you must make payments directly to the Trustee by check or money order until your employer begins deducting money from your paychecks. As the payment amount in your original plan is frequently different than the amount in the confirmed plan, you should ensure that your attorney has advised you of the correct amount. If you lost your job, and/or the employer is no longer making the payments for you, it is your responsibility to make the payments directly to the Trustee on time.

Checks returned by the bank for insufficient funds may result in our office requiring a cashier’s check or money order for all future payments, and may result in a motion to dismiss being filed in your case.

WHAT IF I MISS A PAYMENT?

Remember that YOU are ultimately responsible for making sure that your payments are made and received by the Chapter 13 Trustee. If you are unable to make your Chapter 13 payments as required by your plan, please CONTACT YOUR ATTORNEY IMMEDIATELY. THE TRUSTEE WILL ASK THE COURT TO DISMISS YOUR CASE IF YOU FAIL TO MAKE THE REQUIRED PAYMENTS DUE UNDER YOUR PLAN.

WHAT IF MY CREDITORS CONTINUE TO CONTACT ME?

In most cases, creditors that you listed on your Chapter 13 petition are under an order for relief which prohibits them from contacting you to collect their debts. You will hear this referred to as the “Automatic Stay”. If you get notices in the mail from your creditors, let your attorney know. 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 person letter, a summons, or a visit in person, you should immediately inform them that you are in a Chapter 13 bankruptcy and give them your attorney’s name and address. Under NO circumstances should you discuss the debt with them in any manner. Be sure you tell your attorney the name of the person who contacted you. Your attorney will want to follow up on such a contact and the name of the person contacting you is very important.

Unless your plan explicitly calls for you to make payments to a creditor directly, such as the normal monthly mortgage payments, you may not deal directly with a creditor. You cannot pick and choose a particular creditor and pay him “on the side.” Any such payments may be illegal. All creditors must be paid under the authority of the Court, by the terms of the law, and not by any personal desires or preferences. If you want to pay creditors, you must do so through the Chapter 13 plan.

DO CREDITORS NEED TO FILE A CLAIM?

In order to be paid by the Trustee, a creditor must file a proof of claim. After expiration of the time to file claims, the Trustee will send you a “Notice of Allowed Claims” report. You and/or your attorney should review the claims filed in your case for accuracy. Claims may be reviewed at the Bankruptcy Court or on the website. If a creditor is listed incorrectly or the amount claimed does not appear correct, you should contact your attorney at once. Unless your attorney objects, we will pay the amount on the claim, not the amount listed in your bankruptcy schedules.

IS IT IMPORTANT FOR MY BANKRUPTCY PAPERWORK TO BE ACCURATE?

You have been given a copy of the schedules and other paperwork filed on your behalf with the Bankruptcy Court. This constitutes the permanent record in the Court of your bankruptcy filing. It must be accurate in all respects. You must review the paperwork which has been provided to you, and make sure it is correct. If it is not, contact your attorney immediately and arrange for corrections to be filed with the Bankruptcy Court and served on the appropriate parties. If your paperwork is later determined to be inaccurate, you may lose your benefit of bankruptcy protection, and you may also face an assortment of civil and criminal penalties.

WHAT IF I REALIZE A CREDITOR ISN’T LISTED OR IS INCORRECTLY LISTED?

Creditors not disclosed or improperly listed when you filed can cause quite a few problems. There are two kinds of undisclosed creditors: Those you owed money when you filed your petition but did not list (“unlisted creditors”), and those creditors whose claim was incurred after you filed (“post-petition creditors”).

If you discover an undisclosed creditor, you should let your attorney know the details immediately. Also, if you fail to list the correct address for a creditor, they may not receive notice of your bankruptcy case. This could result in a debt surviving the bankruptcy or the failure to pay a secured creditor through your bankruptcy plan. This could cause a lien to remain against your property at the conclusion of your case.

Post-petition creditors are your responsibility. They will not be paid by the Trustee and are not covered by your bankruptcy.

HOW ARE MY CREDITORS PAID IN MY CASE?

The money paid to the Trustee is used to pay expenses to administer your case, including any payments to your attorney and your creditors. Creditors are generally paid in the following order:

• administrative expenses (Trustee’s percentage fee)
• secured claims and pre-petition alimony and/or child support claims; remaining attorney fees
• priority claims (generally taxes)
• general unsecured claims

The Trustee’s office generally does not pay anything to unsecured claims until priority claims and secured claims are paid in full. Therefore, it could be some time before the first payment is made on the unsecured claims.

WHAT IS THE AMOUNT NECESSARY TO COMPLETE MY PLAN?

You should be aware that, unless all creditors are being paid in full, you will be required to pay at least the “BASE” (monthly payment times the number of months provided in the plan). As this concept can be confusing, we encourage you to review this with your attorney. Hopefully, this will eliminate any misunderstanding about the amount necessary to complete your obligation.

HOW WILL I KNOW WHO IS RECEIVING MY MONEY?

Most people are very interested in knowing how much they owe to their creditors and how much they have left to pay on their Chapter 13 plan. You may access your case status online through the National Data Center “NDC”. The Chapter 13 Trustee also sends you an Annual Report, which lists payments received by the Trustee, payments made to each creditor, and the approximate amount owed on the plan. The Annual report is sent during April every year.

WHAT IF I WANT TO SELL PROPERTY DURING MY CASE?

Selling property generally requires court approval. Before you sell any property during your bankruptcy, you should contact your attorney.

WHAT IF I WANT A PAY OFF QUOTE ON MY CASE?

You may request the amount required to pay off your plan from the Trustee’s Office. Requests must be in writing, signed, and should be mailed to:

Annemarie Mathews, Chapter 13 Trustee
Office of the Chapter 13 Trustee
PO Box 8477
Columbia, SC 29202

Please allow 30 days for a response.

ARE MY CO-SIGNERS PROTECTED?

A co-signer, co-maker or guarantor on any of your consumer debts is generally protected from contact by the creditor by something called the “Co-debtor Stay”. This automatic protection applies only in Chapter 13 cases. If the co-signer, co-maker, or guarantor has given collateral for the loan, the creditor must request a hearing before the Judge in order to proceed against the property. The co-debtor stay will only protect co-signers, co-makers, or guarantors for the amount of debt your plan proposes to pay.

WHAT ABOUT MY MORTGAGE PAYMENTS?

If your plan provides you are obligated to make mortgage payments yourself, you must make those payments directly to the mortgage company ON TIME. If you fail to do so, your mortgage company may obtain an order from the Bankruptcy Court granting relief from the automatic stay which will entitle them to foreclose on your home. If you do not understand this, or have any questions about it, contact your attorney immediately. We strongly encourage you to keep copies of receipts for all payments to mortgage creditors. We have seen cases in which creditors have improperly applied payments. If you don’t have proof that you made these payments, you may lose your home.

WHAT IF I HAVEN’T FILED MY TAX RETURNS?

Failure to file tax returns is cause for denial of approval of your plan or dismissal of your case. Your attorney should discuss with you what is required. If you have not filed all tax returns by the date of your First Meeting of Creditors, the Trustee cannot determine the appropriateness, or “feasibility” of your plan. Therefore, your plan may not be confirmed.

DO I HAVE TO STAY IN CHAPTER 13?

Generally, Federal Bankruptcy law allows you to request that your Chapter 13 case be dismissed at any time. No one can force you to remain under a Chapter 13 plan. If you desire to stop your case, contact your attorney. However, you should understand that a dismissal will reactivate all unpaid or disputed debts, all interest, and finance charges, all late charges not allowed by the Bankruptcy Court, and all claims of your creditors on their terms. The request for dismissal of your case must be in writing and sent to the Bankruptcy Court.

WHAT HAPPENS AFTER I MAKE MY LAST PAYMENT?

After your final payment is made, the Trustee will audit your case to ensure that all payment requirements for your Chapter 13 plan have been met. In some cases, additional funds are needed to meet these requirements. The Trustee’s office will then mail a “Trustee’s Notice to Debtor of Plan Completion and Request for Discharge” to you and your attorney. The “Certification of Plan Completion and Request for Discharge” that is included with this notice must be completed and filed with the Bankruptcy Court within fourteen (14) days of the date of the Notice. Proof that you have completed the required Financial Management Course must also be filed with the Bankruptcy Court before your Chapter 13 case is discharged. Contact your attorney immediately after receiving the “Trustee’s Notice to Debtor of Plan Completion and Notification of Need to File a Request for Discharge” so that you can be sure that you have completed all of the required steps to obtain a discharge of your Chapter 13 Bankruptcy case.

After all of your payments have been sent to your creditors and cleared by the bank, the Trustee will file the Final Report with the Bankruptcy Court.

The Bankruptcy Court issues any discharge order in all Chapter 13 Bankruptcy cases, not the Chapter 13 Trustee’s Office. The Bankruptcy Court will only issue a discharge once it has determined that all items required by the Bankruptcy Code have been met. If all items have been completed properly, they will send you your Discharge Order and close your case. PLEASE KEEP YOUR DISCHARGE ORDER IN A SAFE PLACE. It is proof that you successfully completed your plan.

WHAT HAPPENS TO MY 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 lender who looks at your credit record. A credit rating is not A, B or C nor is it 1, 2 or 3 – it is a record of all of your past credit performances. This record is made available to a creditor 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 Chapter 7 bankruptcies and Chapter 13 are indications, in one degree or another, of credit problems. The Chapter 13 Office can not help you with any discrepancies or errors with the Credit Bureau.

WHAT IF MY CREDITORS STILL CALL ME?

When a creditor has had his claim paid by the Chapter 13 plan, he should, and usually does, send the paid in full papers to you. Even if the creditor fails to do this, it is not too significant since the official records of the Court showing your plan is completely paid and you received a discharge would overrule any claim he might make for additional money. Should you receive any request for additional money after your plan is completed, do not pay without first talking to your attorney.