WHAT YOU NEED TO KNOW ABOUT YOUR CHAPTER 13 CASE

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1 WHAT YOU NEED TO KNOW ABOUT YOUR CHAPTER 13 CASE This pamphlet is intended to help you understand YOUR responsibilities in Chapter 13, and the rolls played by the Bankruptcy Court, YOU, your Attorney, the Chapter 13 Trustee, and your creditors. Your duties include, but are not limited to: 1) making regular payments to the Chapter 13 Trustee as proposed in your Plan, including the first payment due within 30 days after your Plan is filed; 2) attending the First Meeting of Creditors, and having appropriate identification and proof of your social security number; and 3) attending the hearing(s) on Confirmation of your Chapter 13, if necessary. This pamphlet has been prepared and provided to you by: Anthony B. DiSalle Standing Chapter 13 Trustee (419) PLEASE READ THIS BOOKLET CAREFULLY. IT PROVIDES THE BASIC INFORMATION YOU NEED FOR YOUR CHAPTER 13 CASE. Revised 10/21/04-W

2 YOUR CHAPTER 13 CASE INFORMATION (Please fill in information below.) Your Case Number: Your Atorney s Name Your Atorney s Telephone No. PLEASE NOTE: You are required to appear at First Meeting of Creditors held at 316 N. Michigan St., Suite 500, Toledo, OH to be held on *In case of emergency, the telephone number at the Hearing Room is: **YOUR ATTORNEY WILL ADVISE YOU IF YOUR APPEARANCE IS REQUIRED AT THE CONFIRMATION HEARING When making payments, please make sure that your name (as on the petition) and case number are on your check, money order or cashier s check. DO NOT SEND CASH OR POST-DATED CHECKS.

3 INTRODUCTION You have filed a Voluntary Chapter 13 Bankruptcy Petition in the United States Bankruptcy Court for the Northern District of Ohio, Western Division (Toledo). A Chapter 13 bankruptcy allows you to propose a Plan to repay your creditors over a 3 to 5 year period. The payments to creditors under your Plan are made under Court supervision through the Office of the Chapter 13 Trustee. During your Chapter 13 bankruptcy, you are given certain protections from your creditors. For example, creditors are prohibited from taking any action outside of the Bankruptcy Court to collect debts owed at the time of filing, unless the Court issues an Order allowing them to do so. Another benefit is, that if certain conditions are met, you can usually keep your property, and pay for it over time. You are also restrained from attempting to sell any of your assets, including your home, car, etc., without requesting and obtaining permission from the Court. You are also prohibited from making any purchases or obtaining any loans, secured or otherwise, in exces of $1, without the Court s consent. As you can see these protections are not just set up for you, but also for your creditors. The Bankruptcy Court is the mediator between you and your creditors. The Court s job is to make sure that al parties act in good faith and in compliance with Bankruptcy laws.

4 YOUR CHAPTER 13 PLAN You have filed a voluntary Chapter 13 Petition with the U.S. Bankruptcy Court. Your petition sets forth all your assets, your income, expenses, and a plan. This plan, if approved by the Court, is the blueprint that will be used to pay back your creditors. Your Plan includes the amount of money you will to pay to the Trustee each month, in what order you want your creditors to be paid, which secured creditors will be paid by you (outside the plan), and which are to be paid by the Trustee (inside the plan). Your Plan must also state what percentage your unsecured creditors will be paid on their claims. Secured creditors, particularly mortgages, are for the most part, paid regular monthly payments by the debtor, with the exception of any arrearages (missed payments) that may have accrued prior to the filing of your petition. These arrearages must be paid through the Plan by the Trustee. If you are to maintain your current monthly payments to a creditor and the Trustee is to pay any arrearage, PLEASE REMEMBER: It is imperative that you begin making monthly payments beginning with the first payment due after the filing of your Chapter 13. It is what your creditors expect, and it is a sign of good faith on your part. If you are not sure where to send your payments, or the creditor has refused your payments prior to this time, the Trustee advises that you give the payment to your attorney. He/she will then write that creditor and enclose your payment with the letter. DO NOT WAIT UNTIL YOUR CASE HAS BEEN CONFIRMED TO BEGIN MAKING YOUR NORMAL MONTHLY PAYMENTS PURSUANT TO YOUR PLAN. It sometimes takes two to four months (or even longer) to confirm a case depending on its complexity. Waiting will only put you that much further behind, and may require a higher monthly payment to the Trustee in order to successfully complete your case.

5 YOUR ATTORNEY Your attorney represents your interests in this case, and must continue to do so for as long as your case is active, or until the Judge permits your attorney to withdraw from your case. Should you have any questions concerning your case, your rights, or your options, contact your attorney first. He/She is familiar with the Bankruptcy Code and Bankruptcy Rules, as well as the local rules and practices. Some questions may have a simple answer. Others may require contact with the Trustee s Ofice or the filing of documents with the Court. Only your attorney can prepare these filings and give you advice as to the best way to proceed in a given situation. In most cases, a portion of your atorney s fees wil be paid through your plan. Make sure you have discussed fees and costs with your attorney, and that you fully understand if additional services will cost you more money. It is to your benefit to fully understand all facets of this Court action. THE STANDING CHAPTER 13 TRUSTEE The Standing Chapter 13 Trustee s responsibilities are to administer your confirmed Chapter 13 plan. That would include monitoring your payments, responding to telephone calls and other inquiries from creditors, disbursing payments to your creditors, maintaining your case file, and working with you and your attorney during the pendency of your case. For your information, the Trustee s Ofice is open Monday through Friday, from 9:00 a.m. until 5:00 p.m. Due to the number of active cases, and the number of cases being filed, telephone lines may be busy, or the Trustee s staff may be helping other people. If you have difficulty getting through by telephone, a voice mail system is in place. Please leave a detailed message and always include your name, case number, question, and how we can best return your call.

6 Your call will be referred to one of the Trustee s case analysts or managers. These parties are well-trained and qualified to discuss any problems or concerns that you may have. However, Trustee and his staff, CANNOT give you legal advice. When necessary, they will refer you back to your attorney for assistance. FIRST MEETING OF CREDITORS Be advised that your attendance at the first meeting of creditors is MANDATORY. The First Meeting of Creditors is scheduled by the Trustee. Your confirmation hearing will be scheduled by the Court. You will receive a notice of the date, time and locations for those hearings. You MUST attend the First Meeting of Creditors. You MAY be required to attend the Confirmation Hearing. The first meetings of creditors are normally scheduled between 8:30 a.m. and 1:00 p.m. These hearings are held at 316 N. Michigan Street, Suite 500, Toledo, Ohio At the First Meeting of Creditors, you, your attorney, the Trustee and his assistant are present, as well as any of your creditors who may choose to appear. The Trustee and your creditors will ask questions about your property, debts, income, expenses and your proposed treatment of creditors. **IT IS IMPERATIVE THAT YOU BRING PICTURE IDENTIFICATION TO THIS HEARING, SUCH AS YOUR DRIVER S LICENSE OR STATE I.D.

7 A directive from the United States Trustee states as follows: Efective December 3, 2001, al debtors must provide trustees with picture identification to verify their identity and proof of social security numbers. All documents must be original or certified copies. Acceptable documentation includes: A. Picture identification: valid state driver s license, U. S. pasport, or government issued identification card (examples: employee, military, sate ID, legal resident alien). B. Social Security number (if not on picture ID): social security card, social security statement, W-2 form, recent payroll stub, or other official documentation that indicates name and social security number. If a debtor fails to provide the required identification at the 341 meeting the debtor is not to be examined and the meeting must be continued to the trustee s next date. CONFIRMATION HEARING Your Confirmation Hearing will be held at the United States Courthouse at 1716 Spielbusch Ave., Toledo, Ohio The hearing will be held at a date and time determined by the Bankruptcy Court. Your attorney will advise you if your appearance is required at the Confirmation Hearing.

8 PAYMENTS Your Chapter 13 plan proposes that certain payments are to be made on a set schedule. These payments are applied by the Trustee toward the payment of claims filed in your case. The law states that Debtor(s) shall begin making payments proposed by their Plan within 30 days after the date the Plan was filed. The law further states that if these payments are not made within that 30 day period, the case can be dismissed by the Court. Please re-read that portion of the accompanying letter which states your proposed payment and the date it is due. Payments should be made by money order, cashier s check or personal check and should be made payable to: Standing Chapter 13 Trustee. Mail all payments to: Anthony B. DiSalle, Trustee Standing Chapter 13 Trustee P.O.Box Cincinnati, OH PLEASE NOTE: IT IS IMPORTANT TO INCLUDE YOUR NAME AND CHAPTER 13 CASE NUMBER ON ALL PAYMENTS. *NO CASH OR POST-DATED CHECKS WILL BE ACCEPTED. **PAYMENTS MUST BE MAILED BY ORDINARY MAIL. ***PAYMENTS MAILED VIA EXPRESS or PRIORITY MAIL WILL NOT BE ACCEPTED. ****PAYMENTS CANNOT BE MAILED or BROUGHT TO THE CHAPTER 13 TRUSTEE S OFFICE.!! ALL PAYMENTS RECEIVED AT THE ABOVE MAILING ADDRESS WILL CLEAR YOUR BANK IMMEDIATELY UPON RECEIPT!!

9 At the first meeting of creditors, it will be determined whether your subsequent payments will be made directly by you or through a payroll deduction. At the present time, the Trustee s Ofice is unable to set up electronic/automatic transfers of funds from your bank account. WE PREFER THAT SUBSEQUENT PAYMENTS INTO YOUR PLAN ARE MADE THROUGH A PAYROLL DEDUCTION FROM YOUR PLACE OF EMPLOYMENT. It makes life easier for you, the Creditor(s) and the Trustee. And most importantly, we have found that cases funded by payroll deduction are more likely to succeed. You are responsible for making all required payments. You cannot miss payments to the Plan. If you encounter a problem making your payments directly, or if there is a problem with your payroll department withholding the payroll deductions, you MUST contact your atorney and the Trustee s Office immediately. IF PAYMENTS ARE BY PAYROLL DEDUCTION: The Court will not Order a payroll deduction unless you agree to it. If you are an employee, you will be asked at your First Meeting of Creditors if you would like to pay through a payroll deduction. If you agree to payment through a payroll deduction, the Order that confirms your Chapter 13 Plan will direct your employer to send to the Chapter 13 Trustee a fixed amount of money every time you are paid. The payroll deduction cannot start until your Plan is confirmed. The Order confirming your Plan will be sent to you by the Court. When you receive the Order, it is likely that your employer received the Order at about the same time. Start looking to see if the payroll deduction is coming out of your paycheck. YOU ARE RESPONSIBLE FOR MAKING YOUR PLAN PAYMENTS DIRECTLY TO THE CHAPTER 13 TRUSTEE UNTIL YOUR PAYROLL DEDUCTION BEGINS.

10 Remember, The Court has exclusive jurisdiction over your wages and property during the pendency of your Plan. Should any employer treat the payroll deduction as a garnishment, or should any creditor attempt to garnishee your wages, you should advise your attorney and the Chapter 13 Trustee s Ofice. Your atorney can take steps to asist your employer to more fully understand that you are making a voluntary effort to pay your debts. And, when necesary, the Trustee s Ofice wil aid your atorney in conveying that message. IF PAYMENTS ARE TO BE MADE DIRECTLY BY YOU: As previously stated, all payments should be made by personal check, cashier s check or money order, and mailed per the instructions previously mentioned. It is important that regular and timely payments are made so that the Trustee can make regular monthly disbursements to your creditors. If we don t receive regular payments from you, and we do not hear from you about the reason why, the Trustee will be forced to file a motion to have your case dismissed. If your case is dismissed by the Bankruptcy Court, you and your home and your other possessions are no longer under the protection of the Bankruptcy Court and your creditors may resume foreclosure/re-possession/collection proceedings. NOTE: A copy of the Order confirming your Plan is mailed to your employer(s), unless you request that your employer not be notified. This is done for your protection. If a creditor attempts to collect their debt by way of a garnishment, your employer has been put on notice of the Chapter 13 case and is instructed not to honor any garnishments or levies. Further, the employer is instructed to return the notice to the creditor and advise them that you are in a Chapter 13. The creditor should then be advised to file a claim in your case to allow for payment of any debt.

11 ***If, you are making direct payments, and for any reason do not want your employer to be notified that you have filed a Chapter 13, please advise your attorney, and the Trustee at the time of the First Meeting of Creditors. Also, any changes in employment or financial status that would affect your ability to make your payments, must be reported to your attorney and the Trustee s Ofice. The Trustee is always wiling to try to work through temporary financial set backs. We want to see you complete your plan! However, if there is no communication from you about any difficulties, the Trustee has no alternative but to file for dismissal of your case. ** ** COMMON PROBLEMS PREVENTING CONFIRMATION OF CHAPTER 13 PLANS. 1. Uninsured real estate or vehicles. You will be questioned at the first meeting of creditors if your home is insured and whether your vehicles are insured. The Court will NOT confirm a case where the real estate is not uninsured. Neither will the Court confirm a case where your mortgageholder has replaced your insurance with what is caled forced-placed insurance. That is insurance carried by your mortgageholder which insures their mortgage in full if your house is destroyed, but does not cover you, your possessions, or the equity in your home. This type of insurance will provide YOU with NO benefit if your house is destroyed by fire, natural disaster, etc. Also, FORCED PLACED INSURANCE COSTS APPROXIMATELY THREE TIMES WHAT PERSONALLY-HELD INSURANCE COSTS. Therefore, if you are aware, at the time of filing, that any of your property is not insured or is insured by forced-placed insurance, please begin the process of obtaining your own insurance immediately. This will help to avoid delays in the confirmation of your plan. 2. Unpaid or unfiled tax returns. Another question you will be asked by the Trustee is whether you have timely filed your tax returns, and paid your taxes for all previous years.

12 Sometimes, Debtors fail to include tax debts in their Schedules, especially if a re-payment plan has been arranged with the taxing authorities. Please note that ALL your creditors must be listed in your bankruptcy Schedules. Further, your unsecured tax liabilities must be paid through your Plan by the Trustee. Be sure to discuss this with your attorney, if this situation applies to you. Also, if you have not filed tax returns for any previous tax periods, take steps to file them promptly. This is another case where the Court will not confirm your Chapter 13 Plan until you do so. You may already know that you do not owe the IRS, State, etc., any monies. However, if you have not filed for the years or periods in questions, the taxing authorities will be unaware of that, and may assume taxes are owed. They may file claims in your case for past due tax estimates that include penalties and interest. These types of claims often cause feasibility problems, and can require large increases in monthly payments while the problem is being litigated. This office advises that you take all steps necessary to file all past due tax forms and make every effort to pay any tax due. If all tax forms have been properly filed, your attorney will be better able to work out an accurate repayment plan that does not include additional penalty and interest. CHAPTER 13 BUSINESS DEBTORS Debtors engaged in business are subject to the same requirements, restraints, and jurisdiction as individuals with only personal debts, but must also provide the Chapter 13 Trustee with additional information relating to the business. Business Debtors may also be required to mail to the Trustee copies of certain documents, including proof of insurance, bank account records, licenses, tax returns, leases, etc. These documents, if requested, must be provided to the Trustee prior to the first meeting of creditors. If the Trustee does not receive the requested documentation prior to the first meeting of creditors, we may be unable to go forward with the creditors meeting as scheduled.

13 Business debtors are also required to file quarterly reports and summaries of their business operations with the Trustee and the Court. Contact your attorney if you have any legal questions. TAXES During the pendency of your Chapter 13, you will be required to maintain records and file all necessary tax returns as required by law, and to pay any and all post-petition tax indebtedness directly to the appropriate taxing authorities. This requirement is addressed more completely in the Order Confirming Plan. Please read it carefully. COMPLETION OF YOUR PLAN When your creditors have been paid in full, the Trustee will prepare the necessary paperwork to stop any payroll deduction and notify you that your plan appears to be completed. You, your attorney and the Court will receive copies of the Trustee s Final Report and Account, after which you wil receive a Discharge Order from the Bankruptcy Court. ** PLEASE NOTE: The Trustee is unable to close Chapter 13 cases that are completed (or advise the Court to isue the Discharge Order ) until after al of the final checks, issued to your creditors and to you, have been cashed. Therefore, you will NOT receive a Discharge Order at the time you make your final payment. It could take 4-6 weeks for the final checks to clear and the paperwork to be prepared by the Trustee and the Court. Upon successful completion of your plan, the Trustee will also notify the Credit Bureau of Toledo that your Chapter 13 case has been completed. We will also forward to them copies of the Final Report and Discharge Order for their records. It is important that you follow up with the credit reporting agencies to see that your records are accurate once your case has been completed.

14 You can, at any time, pay additional funds into your Plan. Obviously, any additional funds will help shorten the length of the Plan. Often, Debtors will send in all or a portion of profit-sharing or bonus checks, or tax refunds. If you have a 100% Plan, you may pay off your plan at any time prior to the end of the time frame allowed by the Court. If your Plan proposes to pay less than 100%, you should contact your attorney about attempting to pay your Plan off early. INCURRING ADDITIONAL DEBT If you find it necessary to incur any additional indebtedness during the course of your Chapter 13, for the purchase of a vehicle for example, you MUST obtain approval from the Trustee BEFORE incurring such debt. Contact your atorney and the Chapter 13 Trustee s Office. SALE OF ASSETS OR REFINANCING If your plan provides for, or you desire to sell an asset, be sure to contact your attorney to be sure that the sale is accomplished in accordance with your Plan. Your atorney wil then contact the Trustee s Ofice so that the disposition of the proceeds of the sale can be determined. Ordinarily, the Court issues an injunction which will prohibit you from selling, disposing of or encumbering your real estate or any other major asset during the course of your Chapter 13 case unless you first obtain approval from the Court. Should such a situation arise, where you need to sell or refinance, please contact your attorney and the Chapter 13 Trustee as soon as possible. It will be up to your attorney to file the required paperwork with the Court.

15 COMMUNICATIONS FROM THE TRUSTEE From the time your case is confirmed, and even before, you will receive various communications, notices and other documents from this Office. This letter and pamphlet are the first of many. PLEASE READ ALL COMMUNICATIONS AND DOCUMENTS IN REGARD TO YOUR CHAPTER 13 CASE CAREFULLY. If you do not understand what is being said or the purpose of the document, please call your attorney immediately. You will be mailed copies of documents which will tell you which creditors have and have not filed claims in your case, and for what amounts. If the amounts do not appear correct call your attorney. You are allowed a certain amount of time within which to object to any claim. Every April and October you will receive a ledger from the Trustee, which will reflect the payments made into your plan and the disbursements made to your creditors during the previous six months, along with current balances. FINALLY As was stated at the beginning of this booklet, you have filed a Chapter 13 Re-payment plan. Which means you have entered into a joint effort to help satisfy your creditors, while holding on to all of your property. The Trustee, your attorney and even your creditors, are all hoping for the successful completion of your plan. As in any relationship, if lines of communication are not maintained the chances for success become more difficult. This is why you need to let us know if you are finding it difficult to make payments, if a check will not clear, if your employment situation changes. Complying with a Chapter 13 plan is not always easy. You may have to make a real sacrifice to meet the obligations you have set for yourself in your plan and to live within that budget. Please know that thousands of people have, over the years, been successful in completing their re-payment plans and have been just as successful in re-establishing their credit. GOOD LUCK!