Bankruptcy Basics: The ABCs of Filing Chapter 13 · PDF fileChapter 1—Chapter 13: Case Objectives and Applicable Law i. inTrODuCTiOn Chapter 13, known as adjustment of debts of an

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Bankruptcy Basics: The ABCs of Filing Chapter 13

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BAnkruPTCy BASiCS: ThE ABCS OF FiLinG ChAPTEr 13

SECTiOn PLAnnErS

The honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, EugeneAnn k. Chapman, Vanden Bos & Chapman LLP, Portland

Christopher n. Coyle, Vanden Bos & Chapman LLP, PortlandWayne Godare, Chapter 13 Trustee, Portland

OrEGOn STATE BAr DEBTOr-CrEDiTOr SECTiOn EXECuTiVE COMMiTTEE

Tara J. Schleicher, ChairSusan S. Ford, Chair-Elect

Patrick W. Wade, Past ChairM. Caroline Cantrell, Treasurer

David W. Hercher, SecretaryThe Honorable Frank R. Alley

E. Clarke BalcomChristopher N. Coyle

Wayne GodareKeith D. Karnes

Justin D. LeonardHoward J. Newman

Karen M. OakesThomas M. OrrMilly Whatley

The materials and forms in this manual are published by the Oregon State Bar exclusively for the use of attorneys. Neither the Oregon State Bar nor the contributors make either express or implied warranties in regard to the use of the materials and/or forms. Each attorney must depend on his or her own knowledge of the law and expertise in the use or modification of these materials.

Copyright © 2012

OREGON STATE BAR16037 SW Upper Boones Ferry Road

P.O. Box 231935Tigard, OR 97281-1935

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TABLE OF COnTEnTS

Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Faculty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii

1. Chapter 13: Case Objectives and Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–i— Ann k. Chapman, Vanden Bos & Chapman LLP, Portland, Oregon— Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland, Oregon

2. Chapter 13: Drafting a Chapter 13 Plan from Theory to Practice—Dealing with Typical Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–i— Ann k. Chapman, Vanden Bos & Chapman LLP, Portland, Oregon— Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland, Oregon

3. Chapter 13 Trustee’s Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–i— Wayne Godare, Chapter 13 Trustee, Portland, Oregon

4A. Chapter 13: The Creditor’s Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–i— Stephen T. Tweet, Albert & Tweet LLP, Salem, Oregon

4B. Confirmation and the Order Confirming Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B–i— Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland, Oregon

5. Chapter 13: Confirmation to Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–i— Ann k. Chapman, Vanden Bos & Chapman LLP, Portland, Oregon— Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland, Oregon— Jordan S. hantman, Office of the Chapter 13 Trustee, Portland, Oregon

6. Chapter 13 Potpourri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–i— Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland, Oregon— Jordan S. hantman, Office of the Chapter 13 Trustee, Portland, Oregon

7. Putting it All Together: Chapter 13 hypotheticals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7–i— Douglas r. ricks, Vanden Bos & Chapman LLP, Portland, Oregon— Ann k. Chapman, Vanden Bos & Chapman LLP, Portland, Oregon

8. 11 u.S.C. Chapter 13—Adjustment of Debts of an individual with regular income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8–i

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7:30 registration

8:30 Chapter 13: Case Objectives and Applicable Law

F Why debtors file Chapter 13F Legal framework and requirementsF Law regarding secured creditorsThe honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, EugeneAnn k. Chapman, Vanden Bos & Chapman LLP, PortlandWayne Godare, Chapter 13 Trustee, Portland

9:15 Drafting a Chapter 13 Plan: From Theory to Practice

F Basic drafting requirementsF Trustee’s common drafting errorsF Drafting common scenariosThe honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, EugeneAnn k. Chapman, Vanden Bos & Chapman LLP, PortlandWayne Godare, Chapter 13 Trustee, Portlandkeith D. karnes, Cascade Pacific Lawyers, Salem

10:15 Break

10:30 Drafting a Chapter 13 Plan (Continued)

11:00 Checking the Plan Against Confirmation requirements

F Trustee’s plan analysisF Utilizing Trustee’s liquidation analysis and feasibility programsF Ensuring plan compliance with applicable commitment periodF Drafting complete Chapter 13 plansWayne Godare, Chapter 13 Trustee, PortlandJordan S. hantman, Office of the Chapter 13 Trustee, Portland

12:15 Lunch

1:00 Filing to Confirmation

F Defending the plan through confirmationF Objections to confirmationF ResponsesF Contested confirmation proceedingsF Lien avoidanceThe honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, EugeneWayne Godare, Chapter 13 Trustee, Portlandkeith D. karnes, Cascade Pacific Lawyers, SalemStephen T. Tweet, Albert & Tweet LLP, Salem

SChEDuLE

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2:30 Break

2:45 Confirmation to CompletionF Treatment of tax refunds and income complianceF Post-confirmation eventsF Reviewing and objecting to claimsF Motions for reliefAnn k. Chapman, Vanden Bos & Chapman LLP, PortlandJordan S. hantman, Office of the Chapter 13 Trustee, Portlandkeith D. karnes, Cascade Pacific Lawyers, SalemStephen T. Tweet, Albert & Tweet LLP, Salem

3:15 Chapter 13 PotpourriF Tax concerns in bankruptcyF Hardship dischargeChristopher n. Coyle, Vanden Bos & Chapman LLP, PortlandJordan S. hantman, Office of the Chapter 13 Trustee, Portland

3:45 Putting it All Together: Chapter 13 hypotheticalsThe honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, EugeneAnn k. Chapman, Vanden Bos & Chapman LLP, PortlandWayne Godare, Chapter 13 Trustee, Portland

4:30 Adjourn

SChEDuLE (Continued)

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The honorable Frank r. Alley, iii, U.S. Bankruptcy Court, District of Oregon, Eugene. Prior to his appointment in 1995, Judge Alley was a partner in the Medford, Oregon, firm of Fowler Alley & McNair, where his practice emphasized commercial litigation. He is a former member of the Board of Governors of the Oregon State Bar and the Executive Committee of the bar’s Debtor-Creditor Section. He has taught Debtor/Creditor Relations and Bankruptcy at Willamette University School of Law. He has served as a faculty member at the Northwest Bankruptcy Institute and in CLE presentations for the Oregon State Bar Debtor-Creditor and Family Law Sections, the Conference of Chief Bankruptcy Judges of the Ninth Circuit, and the Bankruptcy Section of the State Bar of Montana.

Ann k. Chapman, Vanden Bos & Chapman LLP, Portland. Ms. Chapman practices in the areas of bankruptcy law and commercial law. She is a member of the Credit Abuse Resistance Education Committee (C.A.R.E.), a member and past chair of the Oregon State Bar Debtor-Creditor Section, and a member of WOMBATS (Women Bankruptcy Attorneys). She has spoken on bankruptcy and practice management for the Oregon State Bar, the Multnomah Bar Association, the National Business Institute, and other professional organizations, and she has authored several articles on professionalism and other topics.

Christopher n. Coyle, Vanden Bos & Chapman LLP, Portland. Mr. Coyle practices in the areas of bankruptcy law, commercial litigation, and debtor/creditor issues. Prior to joining Vanden Bos & Chapman, Mr. Coyle was a solo practitioner practicing taxation and bankruptcy law. He is admit-ted to practice before the United States Tax Court. He is a member of the Oregon State Bar Taxation and Debtor-Creditor sections, C.A.R.E., and the Multnomah Bar Association.

Wayne Godare, Chapter 13 Trustee, Portland. On June 1, 2010, Mr. Godare became the Chapter 13 Bankruptcy Trustee for the District of Oregon, Portland Division. He was first admitted to the State Bar of Arizona in 1971, the Wyoming State Bar in 1983, and the Oregon State Bar in 1990. Mr. Godare has practiced bankruptcy law exclusively since joining the Oregon State Bar.

Jordan S. hantman, Office of the Chapter 13 Trustee, Portland. Mr. Hantman is a staff attorney for Wayne Godare, Chapter 13 Trustee. Prior to joining the Trustee’s Office, he represented both debt-ors and creditors in consumer bankruptcy cases in Oregon.

keith D. karnes, Cascade Pacific Lawyers, Salem. Mr. Karnes practices in the areas of bankruptcy, consumer law, foreclosure, and tax defense. He is past chair of the Oregon State Bar Consumer Law Section and a current member of the Oregon State Bar Consumer Law and Debtor-Creditor sections’ executive committees. He has written and lectured extensively on fair debt collection, foreclosure defense, bankruptcy, and credit reporting. Mr. Karnes is licensed to practice in Oregon and Washington.

Stephen T. Tweet, Albert & Tweet LLP, Salem. Mr. Tweet’s practice emphasizes business law, bank-ruptcy, and creditors’ rights; he represents both debtors and creditors. Mr. Tweet is former secretary, treasurer, and chair of the Oregon State Bar Debtor-Creditor Section and a former adjunct professor of law teaching creditors’ rights at Willamette University.

FACuLTy

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Chapter 1

ChAPTEr 13: CASE OBJECTiVES AnD APPLiCABLE LAW

Ann K. ChApmAn

Vanden Bos & Chapman LLPPortland, Oregon

Christopher n. Coyle


Table of Contents

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–1

II. Reasons to Consider Chapter 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–1A. A Discharge with Dignity—A Debtor’s Desire to Repay the Creditors in a

Controlled Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–2B. The Debtor Wants to Keep Nonexempt Assets . . . . . . . . . . . . . . . . . . . . . 1–2C. The Debtor Wants to Protect a Codebtor from Creditor Actions . . . . . . . . . . . 1–3D. The Forced “Redemption over Time” of Secured Collateral . . . . . . . . . . . . . 1–3E. The Debtor Wants to Keep Property by Curing a Prebankruptcy Default . . . . . . 1–4F. The Debtor Needs the Chapter 13 “Super Discharge” . . . . . . . . . . . . . . . . . 1–4G. The “Chapter 20” Case (Filing Chapter 13 on the Heels of Chapter 7). . . . . . . . 1–5H. The Debtor Wants to Change Loan Terms. . . . . . . . . . . . . . . . . . . . . . . . 1–6I. The Debtor Needs to Stop Tax Collection and Pay Tax Debts over Time . . . . . . 1–7J. Consider Dissolving a Small Corporation and Assuming All Liabilities . . . . . . 1–7K. Stripping Wholly Unsecured Mortgages from Real Property. . . . . . . . . . . . . 1–7

III. Legal Framework and Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–8A. Sources of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–8B. Speaking Greek: Bankruptcy Shorthand . . . . . . . . . . . . . . . . . . . . . . . . 1–9C. Conceptual Framework of Chapter 13: Composition, Pot, or Extension

Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–11D. Who May Be a Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–13E. Plan Drafting: Requirements and Optional Provisions . . . . . . . . . . . . . . . 1–14F. Confirmation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–20

IV. Law Regarding Secured Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–23A. Collateral Value and Cram-Down . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–23B. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–24C. Monthly Payments/Adequate Protection. . . . . . . . . . . . . . . . . . . . . . . 1–25D. Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–26

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Chapter 1—Chapter 13: Case Objectives and Applicable Law

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i. inTrODuCTiOn

Chapter 13, known as adjustment of debts of an individual with regular income, involves trustee administration of a debt repayment plan by individuals pursuant to a confirmed plan. Plans run from 36 to 60 months depending upon the circumstances. Only the debtor may file a plan in a Chapter 13 case. Contents of the plan are determined by the Code and local rule. See 11 U.S.C. § 1322. There are mandatory local forms for the Chapter 13 plan. The plan must provide treatment to credi-tors that is at least the same as the creditors would receive in a Chapter 7 case. Chapter 13 will normally be selected by an individual engaged in business as a sole proprietor who: (1) wants to protect nonexempt prop-erty by paying the trustee its equivalent liquidation value in a Chapter 7, (2) wishes to impose a payment schedule for repayment on the IRS or other taxing authorities (their consent is not required assuming certain legal requirements are met), (3) needs the broader discharge provisions available in Chapter 13 versus Chapter 7 (although limited under BAP-CPA), (4) wishes to cure the arrearage on a secured claim (such as a trust deed), (5) wishes to control the liquidation of certain property, or (6) has the ability or desire to repay out of income. The Bankruptcy Code often require debtors with income exceeding the state median income to file a Chapter 13. Unlike Chapter 7, which requires the debtor to surrender his or her nonexempt assets to the trustee in return for an immediate discharge under Section 727, in Chapter 13 the debtor surrenders no assets to the trustee.1 Instead, the Chapter 13 debtor keeps his or her assets and pro-poses a repayment plan for both secured and unsecured creditors over a period of time; the plan may last up to five years (and in some cases must last that long). This plan allows the Chapter 13 debtor to reorganize by allowing the debtor to structure payments to secured, priority, and un-secured creditors; in some cases, the debtor is given tremendous power to dictate terms to creditors (though the Bankruptcy Code provides the outer bounds of what those terms may be). The discharge is entered at the end of the Chapter 13 case after the debtor has completed all pay-ments under the plan. 11 U.S.C. § 1328(a). However, there is a “stay” of collection against the debtor as soon as the case is pending. The scope of the Chapter 13 discharge is still broader than the discharge awarded under Section 727, although the amendments to the Bankruptcy Code in 2005 significantly reduced the breadth of what used to be the “super” discharge.

ii. rEASOnS TO COnSiDEr ChAPTEr 13

Why would a debtor desire to file a Chapter 13 instead of a Chap-ter 7? Notwithstanding the appeal of an immediate discharge in Chapter 7, debtor’s counsel should evaluate each individual’s circumstances and make the appropriate recommendation regarding Chapter 7 or Chapter

1 All references to sections and chapters refer to Title 11, 11 U.S.C. § 101, et seq.

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13. Creditors should also try to understand why a particular debtor filed Chapter 13. For example, the debtor may have elected Chapter 13 in-stead of Chapter 7 because certain kinds of relief are available in Chap-ter 13 that is not available in Chapter 7. Once the creditor understands the reason the debtor selected Chapter 13, the creditor will be better able to deal with the dynamics of the case and plan a response. The following are some of the reasons individuals file Chapter 13 instead of Chapter 7.

A. A Discharge with Dignity—A Debtor’s Desire to repay the Creditors in a Controlled Environment

Notwithstanding the popularity of bankruptcy as a solution to financial problems, some debtors feel a duty or responsibility to their creditors and want to try to pay back some of their debt. Theoretically, a debtor with 20 creditors could contact all 20 creditors and try to work out a repayment plan that combined a principal indebtedness write-off with monthly payments outside bankruptcy. However, the likelihood of getting all 20 creditors to go along with the program is slim. Generally, it is more costly for the debtor to settle with his/her creditors outside of bankruptcy. Chapter 13 enables those debtors who want to repay some-thing to their creditors to make partial or full repayment. The debtor gets the benefit of the automatic stay—the bankruptcy shield—and upon successful completion of the plan, the debtor receives a Chapter 13 discharge. The debtor can deal with all of his or her creditors in one forum. The intransigent creditor who wasn’t willing to deal outside of bankruptcy is left with no choice but to go along for the ride.

B. The Debtor Wants to keep nonexempt Assets

In Chapter 7, the debtor is obligated to surrender all nonexempt assets to the Chapter 7 trustee for liquidation. In Chapter 13, the debtor retains some or all assets (whether exempt or nonexempt) and proposes the Chapter 13 plan. While the plan may include as one of its provisions a sale of selected assets to fund the plan, the debtor is not required to sell any assets in Chapter 13. So long as the debtor meets the payment requirements of a confirmed Chapter 13 plan, the debtor should receive his or her discharge—and the debtor will have kept all assets (both ex-empt and nonexempt). There is no unfairness in allowing the Chapter 13 debtor to keep some or all assets, because one of the requirements for Chapter 13 plan confirmation is that the plan meet the “best interests of creditors test.” 11 U.S.C. § 1325(a)(4). The “best interest of creditors test” means that hold-ers of allowed unsecured claims in the Chapter 13 must receive through the Chapter 13 plan at least as much as they would have received if the debtor’s assets were liquidated in Chapter 7. Thus, unsecured creditors in Chapter 13 should not receive any less than they would receive in Chapter 7. However, instead of unsecured creditors receiving a Chapter 7 dividend after liquidation of nonexempt assets, the creditors receive their dividend during the life of the plan from the net disposable income that is paid by the debtor to the trustee to fund the plan.

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C. The Debtor Wants to Protect a Codebtor from Creditor Actions

The automatic stay of Section 362(a) protects the debtor no matter what type of bankruptcy is filed. However, Chapter 13 also includes a codebtor stay. 11 U.S.C. § 1301. Under the codebtor stay, a person who is obligated with a debtor on a consumer obligation is also protected from creditor action. It is common for many consumer debtors to have comak-ers or guarantors who may be liable with them to a creditor—usually a relative (i.e., a parent signing so a child can get a car loan). The Chapter 13 codebtor stay stops the creditor from immediately going after the codebtor. However, a creditor may request that the court terminate the codebtor stay to allow a lawsuit against a nonbankrupt codebtor. Statu-tory grounds warranting relief from the codebtor stay exist when:

“(1) as between the debtor and the individual protected under subsection (a) of this section [the codebtor stay pro-vision], such individual received the consideration for the claim held by the creditor;

“(2) the plan filed by the debtor proposes not to pay such claim; or

“(3) such creditor’s interest would be irreparably harmed by continuation of such stay.”

11 U.S.C. § 1301(c). The debtor usually does not want the creditor to go after “Mom” or “Dad,” who may have cosigned on a loan. A common tactic to en-sure the creditor will not go against the codebtor is to separately clas-sify the cosigned loan in the Chapter 13 plan and propose to pay that loan in full. Because full payment is proposed in the plan, it is unlikely the bankruptcy court will lift the codebtor stay to go after the codebtor (so long as no other independent basis for relief from the codebtor stay exists). However, this approach will not protect the codebtor’s credit rating.

D. The Forced “redemption over Time” of Secured Collateral

In Chapter 7, the debtor must file and serve a statement of inten-tion disclosing whether the debtor is going to surrender, reaffirm, or redeem collateral that secures a consumer debt. 11 U.S.C. § 521(a)(2)(A). “Reaffirmation” requires the Chapter 7 debtor to reaffirm the entire loan balance on the original loan terms (unless the creditor allows different treatment). “Redemption” requires the debtor to pay the fair market val-ue of the collateral in cash. Many debtors do not have the cash to redeem collateral, and, while “redemption financing” has become more avail-able in recent years, some debtors struggle to qualify. Thus, the Chapter 7 debtor may be faced with the dilemma of reaffirming a car loan for $7,000 even though the car that is the collateral for the loan may only be worth $4,000. The debtor is also faced with the dilemma of coming up with the required payments to bring the car loan current to avoid default and repossession. Chapter 13 solves this dilemma. In Chapter 13, a debtor may “cram down” the secured creditor and pay the secured

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creditor just the value of the collateral through the plan plus interest (which can often be reduced from the contract rate), except in the case of a “910” claim (but interest rate reduction may still be available) (“910” claims are further addressed below). Because the debtor is keeping the collateral by paying the value, it is similar to a redemption, but it is a redemption “over time” because a full cash payment is not required. As you will see, a common battle-ground in Chapter 13 is the value of the secured creditor’s collateral. This is not just a “secured creditor” issue, for every dollar paid to a se-cured creditor so the debtor can retain collateral may be one less dollar available to pay unsecured creditors a dividend. Thus, unsecured credi-tors should be keenly aware of what type of asset the debtor is going to pay for in the plan to a secured creditor and how much is going to be paid to that secured creditor.

E. The Debtor Wants to keep Property by Curing a Prebankruptcy Default

By the time some debtors file bankruptcy, they are substantially delinquent on their home mortgage payments. Some of them are on the verge of foreclosure. It is not unusual for a bankruptcy petition to be filed on the eve of a planned foreclosure sale. If the debtor files Chapter 7, the automatic stay will stop the foreclosure sale, but unless the debtor brings the home mortgage account current, the mortgage lender will likely obtain relief from the stay and will continue with the foreclosure. If the Chapter 7 debtor does not quickly raise the necessary money to cure the mortgage default to stop the foreclosure, then the debtor will lose his or her house. Chapter 13 provides a solution to this common problem. Chapter 13 allows a debtor to stop the foreclosure, pay regular monthly mortgage payments post-petition, and pay the pre-bankruptcy arrearage in a reasonable time over the life of the plan. The principal res-idence protection benefit is a major reason many debtors file Chapter 13.

F. The Debtor needs the Chapter 13 “Super Discharge”

It is a common adage in bankruptcy that only “honest debtors receive a discharge.” That statement may in part be traced to Section 523(a), which includes 19 exceptions to discharge.2 Chapter 13 provides some benefits Chapter 7 does not by discharging some of the debts ex-cepted from discharge in Chapter 7. Section 1328(a) expands the scope of the discharge in Chapter 13 to include “all debts provided for by the plan” except:

2 Exceptions to discharge under Section 523(a) relate to specific creditor claims and how the debtor has dealt pre-petition with that creditor. Claims to stop the dis-charge under Section 523(a) are commonly known as nondischargeability claims, and the focus is on whether a particular creditor’s claim should be found nondischarge-able. Nondischargeability claims should be distinguished from claims for denial of discharge under Section 727(a). A denial of discharge claim under Section 727(a) seeks to deny the debtor his or her discharge in its entirety as to all creditors, usually because of bad acts by the debtor in the bankruptcy process itself.

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F Certain long-term debts provided for under Section 1322(b)(5); F For restitution or a criminal fine; F For civil restitution or damages resulting from debtor’s willful or malicious injury causing personal injury or death; F Taxes to be collected or withheld as excepted by Section 507(a)(8)(C); F Taxes or customs duty where a return or notice was not filed or was filed after the date on which the return was last due and within two years of the petition date as excepted by Section 523(a)(1)(B); F Taxes or customs duty from a fraudulent return or will-ful attempt to evade the taxes or customs duty as excepted by Section 523(a)(1)(C); F For money, property, services, or credit obtained by (a) false pretenses, false representation, or actual fraud other than a state-ment respecting debtor’s financial condition; (b) use of a materially false, intentionally deceptive writing respecting debtor’s financial con-dition and on which the creditor reasonably relied; F For certain debts involving fraud or willful and malicious injury where debtor did not adequately notice the creditor and where the creditor did not have notice; F For certain debts involving fraud while acting as a fidu-ciary, embezzlement, or larceny; F For domestic support obligations as set forth in Section 523(a)(5); F Certain student loans (unless debtor can affirmatively es-tablish an undue hardship) excepted by Section 523(a)(8); and F Damages for death or personal injury caused by the debt-or’s operation of a motor vehicle, vessel, or aircraft as excepted by Sec-tion 523(a)(9). Debtor’s counsel should review a Chapter 13 debtor’s obligations to determine if there is any benefit to filing a Chapter 13 rather than a Chapter 7 (e.g., a debt owed to a former spouse that is not a domestic support obligation and that is not otherwise excepted from discharge).

G. The “Chapter 20” Case (Filing Chapter 13 on the heels of Chapter 7)

Chapter 20 is a euphemism for a debtor filing Chapter 7, obtain-ing a discharge of all dischargeable debts in Chapter 7, and then filing Chapter 13. Why would a debtor do this? The debtor may have an ob-ligation left over from the Chapter 7 case that was not discharged but that could be paid in full in Chapter 13 notwithstanding that there is no discharge available after the Chapter 7 discharge (i.e., a property settle-ment obligation under Section 523(a)(15)), or the debtor may have filed Chapter 7 and received a discharge of prepetition debt but was unable to work out terms with secured creditors with liens against the debtor’s property, such as the automobile lender and the home mortgage lender). Remember that debts are discharged in bankruptcy but liens survive!

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Thus, by filing Chapter 13 after Chapter 7, the debtor may be able to pay only the vehicle’s value over time in Chapter 13 (if it’s not a 910 claim) and is able to stop foreclosure and cure the mortgage delinquency over the life of the plan. In addition, some debtors may not be eligible for Chapter 13 with-out first “cleansing” themselves of some debt by obtaining a Chapter 7 discharge. In order to be eligible for Chapter 13, a debtor must reduce his unsecured debt to less than $360,475 or rid himself of secured debt so he owes less than $1,081,400. A creditor may try to attack Chapter 20 cases on the grounds that the follow-up Chapter 13 is not filed in “good faith.” The issue of “good faith” is a much broader determination than whether someone has filed for Chapter 13 after Chapter 7. If the debtor has a good reason for filing Chapter 13, then, absent some other type of fraud on the court or other egregious conduct, the creditor fighting a Chapter 20 on good-faith grounds will probably have an uphill battle. The U.S. Supreme Court has explicitly recognized that Chapter 20 cases are not necessarily prohibited. Johnson v. Home State Bank, 501 US 78, 111 S. Ct. 2150 (1991); see also In re Grignon/Hendrix, 2010 Bankr. LEXIS 4279 (Bankr. D. Or. Dec. 7, 2010) (discussing good faith in the context of a no-discharge Chapter 13 filed after a Chapter 7 discharge).

h. The Debtor Wants to Change Loan Terms

Chapter 13 allows a debtor to rewrite certain loan terms. Gener-ally, the Chapter 7 debtor can only keep collateral by making payments if he or she reaffirms the secured debt or pays the debt pursuant to the prepetition contract terms. However, it is not unusual for the collateral to be worth much less than the debt. When the collateral is worth less than the debt and the creditor demands a full reaffirmation, the debtor is in a dilemma. After all, why should the debtor pay $20,000 for a car when it is only worth $12,000? Also, many bankruptcy judges, if required to approve a reaffirmation agreement, will not approve a reaffirmation of a secured claim for the full amount of the debt if the debt exceeds the value of the collateral. In addition, the debtor may not be able to make the monthly payments required by the original loan terms. In the face of these hurdles, the Chapter 7 debtor is faced with the loss of exempt property that the debtor wanted to keep. Chapter 13 may avoid this problem. The Chapter 13 debtor with property (such as an automobile) subject to a lien may propose to pay just the value of the collateral to the secured lender, and the unsecured portion of the automobile loan will be treated with all other unsecured creditors. This is referred to as “cram-down.” Vehicle collateral may not be “crammed down” if the creditor has a purchase money security inter-est and the debt was incurred within 910 days of the date of the petition. In the case of personal property that is not a vehicle, cram-down is not allowed if the debt incurred was a purchase money obligation incurred within one year of the petition date. In a cram-down situation, the debtor will also be able to adjust (usually reduce) the interest rate and reduce the payments, so long as

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the secured claim is paid during the life of the plan. Interest rates can be modified on a 910 claim. In addition, monthly payments due can be reduced as long as the balance on the 910 claim is paid in full before the end of the case and the monthly payment is an equal monthly amount. This is a significant weapon for debtors in Chapter 13. The debtor’s power to rewrite loan terms in Chapter 13 is the motivating factor for many lenders to renegotiate terms and give debtors favorable interest rate and payment concessions in a Chapter 7 reaffirmation agreement. Many of these lenders understand that if they do not make these value and interest rate concessions, the court may not approve the reaffirma-tion agreement in Chapter 7; the debtor will surrender the vehicle in Chapter 7 or file Chapter 13 to keep the vehicle based on value.

i. The Debtor needs to Stop Tax Collection and Pay Tax Debts over Time

With the economic downturn, taxing authorities are becoming more aggressive and persistent in collecting outstanding tax obligations. As a result, many debtors have found that the taxing authorities have been inflexible in negotiating posture. Chapter 13 does not discharge priority tax debt–in fact, all priority tax debt under Section 507 must be paid in full over the life of the Chapter 13 plan. 11 U.S.C. § 1322(a)(2). However, Chapter 13 will stop tax collection activity and the imposition of tax liens and will allow the Chapter 13 debtor to pay the tax authori-ties back as a priority creditor (ahead of other unsecured creditors over the life of the plan). Upon payment of the priority tax obligation as it exists on the date of petition and the entry of the debtor’s Chapter 13 discharge post-petition, interest that would have otherwise been abated under pre-2005 law will be due after the discharge is entered if the tax returns were not filed initially by the debtor when due. This is a change from pre-2005 law.

J. Consider Dissolving a Small Corporation and Assuming All Liabilities

Small corporations who find it too costly to file a Chapter 11 may find hope in Chapter 13. Corporations themselves are not eligible to file Chapter 13; however, a small business owner may find it beneficial to dissolve the corporation and assume all liabilities as personal prior to filing. Some things to consider are the secured and unsecured debt limits for Chapter 13 as well as potential contingent liabilities and the tax consequences of the business restructure. A variation may be for the debtor to purchase all assets on a secured basis; again, potential liabili-ties and tax consequences must be considered.

k. Stripping Wholly unsecured Mortgages from real Property

The decline in real property values has left many debtors “un-derwater” on their homes; if second (or more junior) mortgages were taken out during the “boom” but there is no longer any equity to sup-port any portion of the mortgage, those mortgages are deemed wholly unsecured and potentially “stripped” in a Chapter 13. Such lien strips

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are not available in Chapter 7. Dewsnup v. Timm, 502 U.S. 410 (1992). While Section 1322(b)(2) prohibits modification of the rights of holders of secured claims secured by only a security interest in the debtor home, a wholly unsecured home mortgage may be “stripped off.” The effect of “stripping” an unsecured lien is to completely remove it from the prop-erty and to treat it as an unsecured claim.

iii. LEGAL FrAMEWOrk AnD rEquirEMEnTS

A. Sources of Law

1. The u.S. Constitution and u.S. Code. The portion of the United States Code that primarily addresses bankruptcy matters is Title 11 (11 U.S.C. § 101 et seq.), which is often referred to as the “Bankruptcy Code.” The Bankruptcy Code is broken down into chapters. Chapters 1, 3, and 5 relate to all types of bankruptcy cases except Chapter 9. Except as otherwise noted in the Code, Chapters 7, 9, 11, 12, and 13 relate only to cases filed under that applicable chapter of the Code. The Bankruptcy Code was significantly modified with the passing of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which be-came effective on October 17, 2005. Various statutes in Title 28 of the United States Code are also ap-plicable to bankruptcy cases. Applicable statutes include 28 U.S.C. § 151–157 (bankruptcy judges); 28 U.S.C. § 581–589(a) (United States Trustee); 28 U.S.C. § 1334 (jurisdiction); 28 U.S.C. § 1408–1412 (venue and jury tri-als); 28 U.S.C. § 1452 (removal); and 28 U.S.C. § 1930 (bankruptcy fees). Statutes applicable in Title 18 of the United States Code include provi-sions relating to bankruptcy crimes. See 18 U.S.C. §§ 151–155.

2. The Federal and Local Bankruptcy rules of Procedure, FrCP, FrE, and Local Forms. The national rules relating to bankruptcy practice are the Federal Rules of Bankruptcy Procedure (“FRBP”). They are numbered FRBP 1001 through 9037. They are commonly referred to as the “Bankruptcy Rules.” Other national rules sometimes applicable in bankruptcy cases are the Federal Rules of Civil Procedure (“FRCP”) and the Federal Rules of Evidence (“FRE”). The Bankruptcy Court for the District of Oregon has adopted comprehensive local rules governing numerous aspects of bankruptcy practice. For ease of reference, the rule numbers are patterned after the FRBP. There are also nationally approved forms for use in bankruptcy cases. These are available in most legal stationery stores and online at http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx. In addition, there are local bankruptcy forms, known as LBFs. They can be obtained through the clerk’s office and online at http://www.orb.uscourts.gov/Rules_Form/courtRulesForm.cfm. The Bankruptcy Code and Bankruptcy Rules are available in pamphlet form from Collier’s Publishing and also from West Publishing. The District Court’s Local Rules (“LR”) are inapplicable unless specifically referenced by the Bankruptcy Court Local Bankruptcy Rules

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx

http://www.orb.uscourts.gov/Rules_Form/courtRulesForm.cfm

http://www.orb.uscourts.gov/Rules_Form/courtRulesForm.cfm

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(“LBR”). LBR 1001-5. Most of the District of Oregon Local District Court Rules are not incorporated by the Local Bankruptcy Court Rules. The local bankruptcy court also indexes these opinions by stat-ute. These opinions are available at the local clerk’s office; opinions is-sued after 2005 may be searched on the Bankruptcy Court’s website.

3. State Law. In certain instances, state law may be applica-ble in a bankruptcy setting. For example, the Bankruptcy Code allows states to select federal or state exemptions. Oregon has chosen to “opt out” of the federal exemption scheme. Therefore, all Oregon bankruptcy exemption issues are determined by examining state law. State law is-sues may also arise in fraudulent conveyance litigation, perfection, and other issues related to the Oregon Uniform Commercial Code and real estate matters.

4. A Plethora of Bankruptcy Court Decisions; the Bank-ruptcy Appellate Panel and Other Appellate Courts. Published bank-ruptcy court decisions are found in four bankruptcy reporting services. They are: (1) West’s Bankruptcy Reporter (BR); (2) CRR Bankruptcy Court Decisions (BCD); (3) Collier Bankruptcy Cases Second Edition (CBC2d); and (4) CCH Bankruptcy Law Reporter (Bankr L Rep). Deci-sions can come from the bankruptcy courts, the federal district courts, the federal bankruptcy appellate panel (the BAP), which exists in the Ninth Circuit, the federal circuit courts, or the U.S. Supreme Court. West also publishes a Bankruptcy Digest, and BCD contains a topical index arranged by Code section.

B. Speaking Greek: Bankruptcy Shorthand

Like any other specialized area of law, bankruptcy law has its own set of acronyms, shorthand, and loaded terms. Below is a collection of acronyms and terms used in practice (and these materials). F ACP. Applicable commitment period, the minimum man-datory duration of a Chapter 13 case. F BAPCPA. Bankruptcy Abuse Prevention and Consumer Protection Act, the bankruptcy “reform” passed by Congress in 2005. F Bin. Best interest number, the amount necessary to be paid to satisfy the best interests of creditors test. F PDi. Projected disposable income, the debtor’s projected ability to make payments toward unsecured creditors as determined by Form B22C. In addition, these materials are written to provide an introduc-tion to Chapter 13. However, these materials do presume basic familiar-ity with the bankruptcy process. The general progression for consumer bankruptcy attorneys is to start with involvement in Chapter 7 cases, move into handling Chapter 13 cases, and finally moving towards han-dling complicated Chapter 11 and 12 cases. For practitioners just start-ing in the bankruptcy area, both Fundamentals of Bankruptcy (an OSB CLE seminar held on August 12, 2011) and the training program pro-vided by the pro bono Bankruptcy Clinic (through Legal Aid Services of Oregon) provide excellent information regarding basic bankruptcy

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practice. A few concepts are discussed here with special attention to the implications for Chapter 13 practice.

1. The Automatic Stay. Immediately upon filing of any bank-ruptcy petition, whether voluntary or involuntary, an automatic injunc-tion goes into effect, which prevents most creditor actions against the debtor and the property of the estate. See 11 U.S.C. § 362. The automatic stay of Section 362(a) always protects the debtor no matter what type of bankruptcy is filed, except in certain specific instances. However, Chap-ter 13 also includes a codebtor stay. 11 U.S.C. § 1301. Under the codebtor stay, a person who is co-obligated with a debtor on a consumer obliga-tion is also protected from creditor action. Where the automatic stay is the “breathing room” for the debtor, the discharge is the relief ultimate-ly sought by the debtor. When the debtor obtains his or her discharge, the automatic stay is replaced by a permanent injunction that prohibits creditors from those same actions with respect to discharged debts. While the automatic stay gives the debtor a respite from many creditors, there are a number of exceptions to the automatic stay. 11 U.S.C. § 362(b). Some of the more common exceptions are for the com-mencement or continuation of criminal actions, some family law ac-tions, collection of a domestic support obligations, and (new to BAP-CPA) some eviction proceedings. 11 U.S.C. § 362(b)(1), (2), and (22)–(23). Creditors should carefully evaluate whether their particular situation falls within one of the Section 362(b) exceptions; since the penalties for violation of the automatic stay can be quite severe, caution is advised.

2. The Bankruptcy Estate. Upon filing, a bankruptcy estate is formed consisting of all of the property of the debtor described in Sec-tion 541 and supplemented by Section 1306. In Chapter 13, post-petition property is brought into the bankruptcy estate. One of the effects of con-firmation is to vest property of the estate back into the debtor, Section 1327(c), however, no clear case law has fully explained the interactions between Sections 541, 1306, and 1327(c); further complicating the issue is the ability of the plan to modify and change the default vesting provi-sions. Section 1322(b)(9).

3. Exemptions. A debtor is entitled to retain certain property. The Bankruptcy Code allows states to opt out of the federal exemptions, Section 522, and Oregon has done so. If a debtor has lived in multiple states in the two years prior to the petition, Section 522(b)(3) provides for determination of which state’s exemptions may apply; states may have different rules regarding application of that state’s exemptions, and in some cases the debtor may be eligible for federal exemptions.

4. Claims. A claim is a “right to payment” or “right to an equitable remedy.” 11 U.S.C. § 101(5). A claim encompasses any remedy a creditor may seek from a debtor. In Chapter 13, there is an ability to address certain post-petition claims under Section 1305. Local practice has been that a creditor was required to file a proof of claim, based on the plain language of Section 1305.

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5. Priority unsecured Creditors. Priority creditors do not possess an enforceable security interest in an asset of the debtor, but the creditor’s debt is of a specific type that receives priority under the Bank-ruptcy Code and is paid before general unsecured creditors. The most common unsecured, priority claims are for income taxes and domestic support obligations; a complete list of the creditors entitled to priority (and their relative priorities) is found in Section 507.

C. Conceptual Framework of Chapter 13: Composition, Pot, or Extension Plans

The requirements of the plan (detailed in Section 1322) and the requirements for confirmation (detailed in Section 1325) are discussed in detail below. In general, there are two overarching requirements on any Chap-ter 13 plan that does not propose to pay creditors in full over course of case (an “extension” plan). These requirements are wholly independent, and, in the various permutations of debtors, one or the other usually is the determining factor in plan drafting. First, from the perspective of the debtor, the debtor must pay her projected disposable income toward the Chapter 13 plan. Calculation of “projected disposable income” (sometimes “PDI”) is discussed in detail elsewhere; for purposes of introduction, a debtor’s projected disposable income can be thought of as what is left of a debtor’s income after the payment of reasonable and necessary expenses; the determination of what constitutes a debtor’s “reasonable and necessary expenses” is de-termined, in part, by “allowances” in certain categories rather than actual expenditures. Chapter 13 cases that are driven primarily by this require-ment may be referred to as “base cases,” “projected disposable income cases,” “PDI cases,” or “composition cases.” These cases are driven by the payment (input) requirements and are characterized by focus and scrutiny on the debtor’s income and expenses as the determination of projected disposable income that forms the basis for the requirements on the debtor during the case. There is also a focus on the appropriate “applicable commitment period”; again, while this topic is discussed in detail later, the applicable commitment period is the minimum length of a debtor’s Chapter 13 case (essentially, for how long the debtor must contribute her projected disposable income into the Chapter 13 plan). Second, from the perspective of creditors, the debtor must pay to creditors certain amounts in a Chapter 13. Common requirements include paying arrears to a secured lender, paying priority obligations (such as certain taxes and domestic support obligations), and/or paying the “best interest number” (“BIN”); again, these requirements are dis-cussed in detail later—for purposes of this introduction, it is sufficient to know that unsecured creditors of a Chapter 13 debtor must receive at least as much as would have been received in a Chapter 7 liquidation. Chapter 13 cases driven by this payout requirement may be referred to as “claims cases,” “pot cases,” “arrears cases,” “priority cases,” or “BIN cases” (depending on the reason for the required payout). These cases

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are characterized by focus on feasibility (the probability of the debtor to be able to successfully perform the plan). Unlike PDI cases where the debtor seeks to have the shortest possible plan, a debtor in a BIN case may seek to extend the length of the plan beyond the minimum time commitment to allow for smaller payments. For example, a Chapter 13 debtor whose schedules show project-ed disposable income of $1,000 each month and whose only nonexempt asset is worth $10,000 to unsecured creditors (a $10,000 best interest number (“BIN”)) will seek to have the lowest payment possible for the shortest time possible. How much this debtor pays will be determined by the plan payment and the applicable commitment period: if the PDI is $1,000 per month and the applicable commitment period (“ACP”) is five years (60 months), the debtor will pay into the plan $60,000. Even after payment of administrative expenses (such as the trustee’s commis-sion and attorney fees), there will be more than enough money paid to unsecured creditors to satisfy the requirements of the best interest test. Compare that situation with a Chapter 13 debtor whose sched-ules show projected disposable income of $250 each month and who has a $10,000 mortgage arrearage on a personal residence and no non-exempt property. If this debtor’s applicable commitment period (ACP) is three years (36 months), the payments over this period will only total $9,000 (and would not account for administrative expenses). This debtor may choose to extend the length of the plan to the maximum allowed (five years/60 months); this increases the amount paid into the plan to $15,000 and allows the debtor to pay the mortgage arrears (assuming sufficient payment for administrative expenses). To ensure the feasibil-ity of this case, the debtor may also seek to utilize exempt property, such as a retirement account, to bring additional funds into the plan to fulfill the payment requirements to creditors. Determining and understanding whether a debtor’s situation and plan will be driven by the required inputs (the debtor’s projected disposable income) or by the required outputs (payments to secured, priority, and/or unsecured creditors) allows practitioners to focus on the most important portion of the debtor’s bankruptcy case. An extension plan or a 100% plan is for an otherwise solvent debtor who does not have current cash flow or liquid assets to meet obligations as they come due. In this situation, the Chapter 13 plan will be to pay all creditors in full during the life of the plan. In such a case, unsecured creditors are entitled to the payment of interest. Since credi-tors will be paid in full through the Chapter 13 plan, the calculation of disposable income is much less important. For example, a Chapter 13 debtor owns three properties with eq-uity (after liens and costs of sale) of $250,000.00. However, the debtor was just found liable in the amount of $125,000 in a civil matter, and the judgment creditor is seeking to foreclose on these properties; for pur-poses of this hypothetical, ignore or assume facts to avoid “good faith” concerns regarding a single-creditor filing. All of the debtor’s resources are invested in these properties. Chapter 13 can allow the debtor to sell

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one or more of the properties in an orderly fashion, avoiding a “fire sale” liquidation and allowing the debtor to maximize the value of the properties, so long as there is a positive cash flow available to fund plan payments.

D. Who May Be a Debtor

Eligibility for Chapter 13 is governed, in part, by 11 U.S.C. § 109(e), which states:

“Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidat-ed, unsecured debts of less than $360,475 and noncontin-gent, liquidated, secured debts of less than $1,081,400, or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontin-gent, liquidated, unsecured debts that aggregate less than $360,475 and noncontingent, liquidated, secured debts of less than $1,081,400 may be a debtor under chapter 13 of this title.”

The dollar amounts reflect the April 1, 2010 adjustment pursuant to Section 104; the next adjustment will be effective April 1, 2013. 75 F.R. 8748. This section breaks down into three primary criteria for eligibil-ity: (1) individual, (2) regular income, and (3) within debt limits. While “individual” is not defined by the Bankruptcy Code, an individual is universally accepted as a “natural person.” Thus, corporations are not eligible for Chapter 13 relief. Partnerships are also not eligible; however, it appears that Congress may have intended small businesses operated by a husband and wife to be considered eligible for relief. See HR Rep. No. 595, 95th Cong, 1st Session, 119, 320 (1977). A Chapter 13 debtor must have regular income. The Bankruptcy Code defines an “individual with regular income” as an “individual whose income is sufficiently stable and regular to enable such individ-ual to make payments under a plan under Chapter 13 . . . other than a stockbroker or commodity broker.” 11 U.S.C. § 101(30). The courts have been very broad-minded in determining “regular income.” Thus, it is not uncommon to find Chapter 13 debtors funding Chapter 13 plans not just with regular wage income but also with wel-fare payments, Social Security payments, pension income, and some-times even unemployment payments. The legislative history clearly supports some of these sources as “regular income”: “Thus, individuals on welfare, social security, fixed pension incomes, or who live on invest-ment incomes, will be able to work out repayment plans with creditors rather than being forced into straight bankruptcy. Also, self-employed individuals will be eligible to use Chapter 13 if they have regular in-comes.” See HR Rep. No. 595, 95th Cong, 1st Session, 311–312 (1977). Not every individual is eligible for Chapter 13 relief. Congress has placed debt limitations on debtors who seek Chapter 13 relief. A

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debtor must have noncontingent liquidated unsecured debts of less than $360,475 and noncontingent liquidated secured debt of less than $1,081,400 in order to be eligible for Chapter 13 relief. 11 U.S.C. § 109(e). For joint debtors, the debt limits are not doubled. See, e.g., In re Archibald, 314 B.R. 876 (Bankr. S. D. Ga. 2004). Furthermore, this propo-sition is simply stated in Colliers: “the limits are not doubled in a joint case.” 2 Collier on Bankruptcy ¶ 109.06[4] (15th ed. rev. 2003). However, neither Archibald nor Colliers squarely addresses the situation where each joint debtor would be individually eligible but the total debt owed by both parties is in excess of the debt limits. In Archibald, the debtors’ residence was encumbered by a $1.6 million mortgage owed jointly by the debtors, rendering neither debtor eligible. A complementary reading of the eligibility requirement sepa-rates the eligibility requirement into the two focal areas: debt limits and regular income. Under this reading of Section 109(e), eligibility under the debt limits is determined in relation to the regular income require-ment. Section 109(e) requires that Chapter 13 debtor have “regular in-come”; this language replaced “wage earner” in the 1978 Bankruptcy Reform Act. P.L. 95-598. Under this reading of this statute, eligibility of a debtor is determined at the individual level based on whether or not the individual has regular income. In this situation, if debtors have regular income, both are evaluated by the first clause of Section 109(e) as an “individual with regular income owes . . . debts of less than [the debt limits]” rather than the second clause, which presumes an individual’s spouse without regular income, by stating an “individual with regular income and such individual’s spouse . . . that owe. . . .” This reading is likewise supported by case law. In Tabor, the court determined that, while debtor-husband was ineligible for Chapter 13 bankruptcy, debtor-wife was eligible because she was only liable for her joint and separate debts. In re Tabor, 232 B.R. 85 (Bankr. N. D. Oh. 1999). Furthermore, Ta-bor only dismissed the Chapter 13 as to the ineligible spouse. Further, joint administration of the case does not impact the substantive rights of creditors of each spouse. Ageton v. Cervenka (In re Ageton), 14 B.R. 833, 835 (9th Cir. BAP 1981) (noting joint filing creates two separate estates that may be consolidated). Joint administration does not require con-solidation. Section 302(b) specifically requires the court to determine the extent of consolidation. This step may be impacted by the concerns of each spouse’s respective creditors; however, it does not impact the fact that the case may be jointly administered. To the extent that creditors ob-ject, their objection can be characterized as an objection to the extent of consolidation under Section 302(b) rather than an objection under Sec-tion 109(e).

E. Plan Drafting: requirements and Optional Provisions

In what may be the shortest section of the United States Code, Chapter 13 simply provides that, “The debtor shall file a plan.” 11 U.S.C. § 1321. From these humble beginnings, Sections 1322 and 1325 detail the

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provisions required to be in the plan, options for additional provisions, and the effects of the plan allowed and disallowed for confirmation. Section 1322 details the requirements for the contents of a Chap-ter 13 plan. This section provides both the required elements that must be found in all Chapter 13 plans and a nonexclusive list of additional provisions that may be included in a Chapter 13 plan. 11 U.S.C. § 1322(a) (requirements), § 1322(b) (permissible provisions). Sections 1322(c), (e), and (f) provide additional modifications to what a Chapter 13 plan may do. Finally, Section 1322(d) describes the maximum plan duration.

1. Plan requirements (Section 1322(a)). Some of the require-ments for the contents are basic common sense. The plan must provide that the debtor make payments to the trustee in an amount sufficient for the trustee to make the payments detailed in the plan. 11 U.S.C. § 1322(a)(1). If classification of claims is made, each claim in a class must be treated equally. 11 U.S.C. § 1322(a)(3). The major substantive requirement for the contents of a plan is that the plan must provide for payment in full of all priority claims; BAPCPA added an exception that domestic support obligations invol-untary assigned or owed to a governmental unit do not need to paid in full (though such debts are not discharged). 11 U.S.C. §§ 1322(a)(2), (4), 1328(a)(2). The exception to the full payment of priority obligations rule is conditioned on the commitment of all of the debtor’s projected disposable income for a five-year period. 11 U.S.C. § 1322(a)(4). The holder of a priority claim may agree to a different treatment. Section 507 contains a long list of debts entitled to priority. Some of the commonly seen ones in Chapter 13 are as follows. a. Allowed unsecured claims for domestic support obliga-tions.3 11 U.S.C. § 507(a)(1). b. Administrative expenses (including the debtor’s lawyer’s fee). 11 U.S.C. § 507(a)(2). c. Tax debts and obligations. 11 U.S.C. § 507(a)(8). The payment of priority debt is usually accomplished before any payments are made to unsecured creditors unless the plan provides oth-erwise. In some cases, payments could be made concurrently with pay-ments to unsecured creditors. Sometimes, debtor’s counsel tries to be paid his or her priority (i.e., administrative expense) claim in bankruptcy prior to any payments being made to secured creditors. Secured creditors should look closely at a plan that proposes that kind of treatment. If paying the debtor’s lawyer before the secured creditor results in the secured creditor being inadequately protected (e.g., the value of the secured creditor’s collater-al is depreciating while the debt is increasing due to interest accrual, or

3 “Domestic support obligation” is a term of art defined in Section 101(14A); irrespective of any labeling in a dissolution judgment, only those debts that fall with-in the Bankruptcy Code’s definition of DSO are entitled to priority treatment. DSOs should be distinguished from other obligations owed to a former spouse (i.e., “prop-erty settlements”) as only DSOs are entitled to priority and nondischargeability treat-ment in Chapter 13.

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there is an argument that equal monthly payments are not being made), then the creditor’s lawyer may be able to object to the timing of any such priority payment to the debtor’s counsel until after the secured creditor is adequately protected.

2. Plan Options (Section 1322(b)). Section 1322(b) provides a nonexhaustive list of options that a Chapter 13 plan may propose. These provisions should be read in conjunction with the requirements for con-firmation—while Section 1322 may allow for the inclusion of a particu-lar provision, the plan may not be confirmable under Section 1325.

a. Separate Classification. Section 1322(b)(1) provides that unsecured claims may be divided into separate classes provided that the plan does not “discriminate unfairly” against any class. The statute provides that a plan may discriminate against classes in favor of pay-ment of consumer debts in certain circumstances (such as when there is a co-obligor). Meyer v. Renteria (In re Renteria), Case No. 11-1502 (9th Cir. BAP May 4, 2012). Unless such an exception applies, under the four-factor test adopted by the Ninth Circuit BAP in Wolff, classification and disparate treatment does not unfairly discriminate if (i) the discrimi-nation has a reasonable basis; (ii) the debtor cannot carry out the plan without the discrimination; (iii) the discrimination is proposed in good faith; and (iv) the degree of discrimination is directly related to the basis or rationale for the discrimination. In re Wolff, 22 B.R. 510, 512 (9th Cir. BAP 1982).

b. Cram-Down/Strip-Down and Strip-Off. Section 1322(b)(2) provides that a plan may modify secured claims (other than claims secured only by a security interest (as defined in Section 101(37)) in the debtor’s personal residence with the exception of secured claims in which the last payment is contractually due within the duration of the Chapter 13 plan). Modifications of secured claims come in two varieties: the cram-down/the strip-down and the strip-off. “Cram-down” and “strip-down” (terms used interchangeably) refer to the bifurcation of a partially secured creditor’s claim into its respective “secured” and “unsecured” components. Section 506(a) pro-vides the authority for this bifurcation as it limits a secured claim to the extent the collateral has value. Beyond the collateral value, the creditor has a separate unsecured claim. Cram-down can be used for secured creditors with a lien against any property of the debtor (e.g., vehicles, rental homes) with few excep-tions: purchase money–secured creditors of nonbusiness vehicles pur-chased within 910 days of filing, purchase money–secured obligations on personal property within one year of filing, and certain security in-terests against the debtor’s home. 11 U.S.C. §§ 1325(a)(9), 1322(b)(2). While Section 1322(b)(2) provides the exception for the debtor’s home, the “exception to the exception” is that the anti-modification clause only applies to mortgages that have their final payment (under the original payment schedule) due after the final payment under the plan. For balloon mortgages on a debtor’s home, the Bankruptcy Code

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was amended to include Section 1322(c)(2), which provides specific au-thority to modify balloon mortgages on the debtor’s principal residence so long as the last scheduled payment is due prior to the final plan pay-ment. However, it is not possible to extend the time for payment beyond the duration of the plan. “Strip-off” or “lien avoidance” is the related concept under Sec-tions 506 and 1322 where there no collateral value to allow for any se-cured claim, as in the example of a second mortgage where the real property value is less than the balance owning of the first mortgage; any value giving rise to an allowed secured claim precludes the use of strip-off. When there is no value for an allowed secured claim, the lien is void and the claim is treated as wholly unsecured. Since the claim is wholly unsecured, the creditor does not possess a secured claim against the debtor’s personal residence and the anti-modification provisions above do not apply. This type of lien avoidance is separate from judicial lien avoidance under Section 522(f) (allowing for protection of the debtor’s exemptions). Judicial lien avoidance is the reduction or elimination of a se-cured claim because it impairs or limits the debtor’s exemptions in their property. It applies only to judicial liens (i.e., judgments) and only when the debtor has a permissible exemption.

c. Cure of Arrears/Payment of Allowed Secured Claims. Sections 1322(b)(2), (3), and (5) provide that a plan may cure any default or arrears and/or pay allowed secured claims. As discussed above, a common motivation for Chapter 13 is to have the opportunity to provide for payments of arrears instead of fac-ing foreclosure. Section 1322(c)(1) provides that defaults may cured “until such residence is sold at a foreclosure sale that is conducted in ac-cordance with applicable nonbankruptcy law”; so long as a bankruptcy case is commenced prior to the fall of the auctioneer’s hammer, cure is permitted, but once that hammer has fallen, so has the debtor’s oppor-tunity to cure. While these provide powerful tools for the debtor to utilize to cure arrears, Section 1322(c) further extends the outer limit on defaults that may be cured through the plan. Enacted to overrule In re Roach, 824 F.2d 370 (3rd Cir. 1987), Section 1322(c)(1) provides that defaults re-garding a lien on the debtor’s principal residence may be cured until the property is sold at a properly conducted foreclosure sale. While this provision extended the last moment to file a case (the Roach court ruled that a judgment of foreclosure was sufficient to terminate a debtor’s right to cure), it does not prohibit cure after this moment if permitted by state law. “[I]f a State provides the debtor more extensive ‘cure’ rights (through, for example, some later redemption period), the debtor would continue to enjoy such rights in bankruptcy.” 140 Cong. Rec. H10,769 (daily ed. Oct. 4, 1994) (remarks of Rep. Jack Brooks); Collier on Bank-ruptcy ¶ 1322.16 (16th ed.). In Oregon, subsequent to a nonjudicial sale (ORS 86.735), the foreclosed party “may not redeem the property.” ORS 86.770. Subsequent to a judicial sale, the judgment debtor may redeem

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the property within 180 days. ORS 18.962, 18.964. Redemption requires payment of the amount paid at auction, any taxes paid on the property post-sale, any amounts paid to avoid waste, any amounts paid to supe-rior lienholders, and interest on all of those at 9%. ORS 18.967. Oregon law does not allow for reinstatement (i.e., paying just the default) after foreclosure sale; the Bankruptcy Code does not either enlarge that time period or allow for reinstatement (except as provided in Section 108(b)). In re Rudolph, 166 B.R. 440 (D. Or. 1994) (holding that the Bankruptcy Court cannot extend the redemption period unless authorized under Section 108(b)). Section 1322(c)(2) was enacted to overrule cases such as In re Se-idel, 752 F.2d 1382 (9th Cir. 1985). See In re Steinacher, 283 B.R. 768 (9th Cir. BAP 2002). This section allows for the modification of claims that come due (by contract, not by acceleration) during the duration of the plan; as a result, this section has been read to allow for bifurcation and cram-down of undersecured “short term” home mortgages. In re Paschen, 296 F.3d 1203 (11th Cir. 2002); In re Eubanks, 219 B.R. 468 (6th Cir. 1998); see also In re Grijalva, 2012 Bankr. LEXIS 1355 (Bankr. D. Az. April 2, 2012) (al-lowing bifurcation and stating, “There is no controlling authority in the Ninth Circuit addressing whether § 1322(c)(2) allows a debtor to cram down a short-term debt secured by a debtor’s principal residence”), but see In re Witt, 113 F.3d 508 (4th Cir. 1997) (holding section only allows for modification of payment schedule, not modification of the claim itself). Section 1322(e) provides the amount necessary to cure a default is determined by applicable nonbankruptcy law; for this reason, the Chap-ter 13 plan provides that the arrearages shown in a timely filed and al-lowed secured claim shall control over the estimates provided in the plan. LBF 1300.05 ¶ 2(b)(1). Section 1322(f) restricts the ability of a plan to modify the treat-ment of a “loan from a plan under section 408(b)(1) of the Employee Retirement Income Security Act of 1974 or is subject to section 72(p) of the Internal Revenue Code of 1986” (essentially, loans against retirement accounts). This provision also excludes this amount from the calculation of disposable income.

d. Directing Payments. Sections 1322(b)(4) and (8) allow for debtors to direct the amount and timing of payments to various claims. For instance, a debtor may have a set amount of a monthly payment paid toward a secured claim and the remainder paid against unsecured claims (commonly administrative or priority claims). In some cases, the plan can even direct that interest be paid on nondischargeable claims. Section 1322(b)(10).

e. Payment of Section 1305 Claims. Section 1322(b)(6) allows for a plan to provide for payment of Section 1305 claims. A Section 1305 claim is a post-petition claim for certain debts that come due after the commencement of the case. Section 1305 claims include both taxes that become payable while the case is pending and consumer debts arising after the petition date for property or services necessary for the debtor’s

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performance under the plan. At this time, neither the Oregon Depart-ment of Revenue nor the Internal Revenue Service is filing Section 1305 claims for post-petition tax liabilities.

f. Assumption, rejection and Assignment of Leases. Sec-tion 1322(b)(7) addresses executory contracts and unexpired leases and, in combination with Section 1322(b)(3), allows for cure of any default of the same.

g. Vesting of Property of Estates. Section 1322(b)(9) provides that the plan may modify the vesting provisions of Section 1327. Absent some contrary provision, confirmation vests all of the property of the estate in the debtor.

h. Anything Else not Prohibited. Section 1322(b)(11) allows the plan to include any other provision or term “not inconsistent with this title.”

3. Plan Duration. The length of a Chapter 13 plan is deter-mined by the applicable commitment period (“ACP”) unless the plan provides for payment in full of all allowed unsecured claims over a shorter period. 11 U.S.C. § 1322(d). The ACP is determined by the top of the Form B22C. If the debtor is below the median income, then the ACP is three years. If the debtor’s income is above-median, the ACP is less clear. In 2008, the Ninth Circuit determined that an above-median debt-or with negative projected disposable income (a negative figure at bot-tom of the Form B22C) had no ACP (and thus no minimum plan length). Maney v. Kagenveama, 527 F.3d 990 (9th Cir. 2008). In 2010, the Supreme Court held that projected disposable income for Chapter 13 was deter-mined with a forward-looking approach; the rationale was that a strictly mathematic approach was inappropriate. Hamilton v. Lanning, 130 S. Ct. 2464 (2010). Since Kagenveama relied on that same mechanical approach for its conclusion of no minimum plan length, it is the Chapter 13 Trust-ee’s position that Hamilton effectively overruled Kagenveama so that an above-median debtor has an ACP of five years. The Bankruptcy Court for the District of Oregon determined that Kagenveama still controlled but only because it had not been overruled as it related to the ACP. In re Reed, 454 B.R. 790, 801 (Bankr. D. Or. 2011) (“I conclude that I need to de-cide only whether the Supreme Court has overruled precedent that I am otherwise required to follow, not whether Kagenveama is consonant with the purposes of the statute. Because I conclude that neither Lanning nor Ransom effectively overruled the applicable commitment period analy-sis in Kagenveama, I am bound to follow the Ninth Circuit’s precedent on that issue.”). The Bankruptcy Court for the District of Idaho reached a nearly identical conclusion. In re Henderson, 455 B.R. 202 (Bankr. D. Id. 2011) (“[B]ecause this Court remains bound to follow Kagenveama to the extent not impacted by the Supreme Court’s decisions, Debtors in this case need not propose plan payments to unsecured creditors for an ap-plicable commitment period of five years.”). While both In re Reed and In re Henderson were on appeal to the Ninth Circuit BAP, the trustee in In re Henderson sought and was granted a direct appeal to the Ninth Circuit

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Court of Appeals (McCallister v. Henderson (In re Henderson), Case No. 11-35865). While the trustee filed a petition for hearing en banc, the time allowed under the court’s General Order 5.2(a) expired without a judge requesting a vote to hear the appeal en banc on April 12, 2012. With respect to currently pending plans, the trustee has “stan-dard language” that links the duration of the confirmed plan with the outcome of Reed to avoid having objections, rulings, and appeals in all applicable cases.

F. Confirmation requirements

Section 1325 sets for the requirements for confirmation. If the debtor, as proponent of the plan, can demonstrate that the plan meets the requirements for confirmation, “the court shall confirm” the plan. 11 U.S.C. § 1325(a).

1. Plan Complies with the Bankruptcy Code. Section 1325(a)(1) unsurprisingly requires that the plan comply with all provisions of Chapter 13, along with other applicable bankruptcy provisions, not just the confirmation requirements. This provision enforces the require-ments and restrictions imposed in plan drafting under Section 1322.

2. Payment of Fees and Pre-Confirmation Payments. Sec-tion 1325(a)(2) requires that the debtor’s filing fees be paid in full. In addition, if the plan requires that certain payments be made pre-confir-mation, the plan cannot be confirmed until those payments are, in fact, made.

3. Plan Proposed in Good Faith/Petition Filed in Good Faith. The court must find that the plan has been “proposed in good faith and not by any means forbidden by law” and that the “filing the petition was in good faith.” 11 U.S.C. § 1325(a)(3), (7). The Bankruptcy Code does not define “good faith.” Good faith is a flexible concept ap-plied on a case-by-case basis where the court will examine the totality of the circumstances. In re Villanueva, 274 B.R. 836, 841 (9th Cir. BAP 2002).

4. Best interests of Creditors. This is known as the best in-terest of creditors test. The distribution to unsecured creditors cannot be any less in Chapter 13 than it would have been in Chapter 7. This analysis requires the Chapter 13 trustee to consider what a hypothetical Chapter 7 liquidation of the debtor’s assets would look like and ulti-mately distribute to unsecured creditors. This analysis requires taking into consideration the liquidation asset values, unavoidable liens that would need to be paid, the debtor’s exemption in assets, and capital gains taxes and expenses that would be paid by a Chapter 7 trustee, after which an ultimate distribution to unsecured creditors occurs. It is this number that becomes the best interest number (“BIN”) in a Chapter 13. A worksheet calculating the BIN is available from the Chapter 13 trustee. For creditors, the best interest of creditors test can be a significant point of leverage. If a creditor can identify an asset that would be liqui-dated in Chapter 7 or a preference or other recovery that would generate

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funds in a Chapter 7, then the plan should not be confirmed unless it provides for payment to unsecured creditors in an amount equal to the net liquidation value the asset would bring in Chapter 7 (after paying all liens, exemption, costs of sale, taxes, and trustee’s fees).

5. Cram-Down. With respect to each allowed secured claim provided for by the plan, (a) the secured creditor must accept the plan, (b) the plan must provide that the secured creditor both retain its lien and the value, as of the effective date of the plan, of any property to be distributed under the plan on account of the claim is not less than the amount of the allowed secured claim, or (c) the debtor surrenders to the holder of any such claim the property securing the claim. Further, if property to be distributed is in the form of periodic payments, such payment must be in equal monthly amounts. Finally, if the collateral is personal property, payments shall not be less than an amount sufficient to provide adequate protection. The issue of what secured creditors are entitled to under a plan is discussed further below.

6. Feasibility. At confirmation, the court must find that “the debtor will be able to make all payments under the plan and to comply with the plan.” 11 U.S.C. § 1325(a)(6). This is called the “feasibility test.” Feasibility comes into play in two common scenarios. First, the plan may not mathematically work. The amount to be paid on a monthly basis to the trustee, after paying secured creditors, may not pay the dividend required under the plan. If the plan does not “mathematically” work as proposed, then the plan is not feasible. The Chapter 13 Trustee’s office provides, on request, a Microsoft Access pro-gram that will analyze the feasibility of a plan. Second, the plan may work mathematically, but the likelihood of the debtor completing the plan is undercut by specific facts of the case. “The test is whether the expectations of income reflected in the Plan are sufficiently realistic that debtors should be given an opportunity to carry out their plan.” In re Evans, Case No. 05-1425, 2006 Bankr. LEXIS 4841 (9th Cir. BAP 2006) (unpublished); see also In re Gavia, 24 B.R. 573, 574 (9th Cir. BAP 1982). For example, the plan may be based upon a stepped-up increase in the debtor’s payments to the trustee at the one-year and two-year marks, but there is no showing that the debtor is going to have higher income or lower expenses to fund those increased payments. If that is the case, the plan may not be feasible.

7. DSO. As of the date of confirmation, Section 1322(a)(8) re-quires that the debtor be current on post-petition domestic support obli-gation (DSO) payments required to be paid by judicial or administrative order or by statute. Pre-petition DSO arrearages are priority claims that will be paid in the course of the plan.

8. Filed Tax returns. Section 1322(a)(9) enforces the debtor’s compliance with Section 1308. Section 1308, added as part of BAPCPA, requires that the debtor have filed all tax returns for all taxable periods ending within the four years prior to the petition date.

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9. Commitment of Disposable income. Upon an objection by the trustee or holder of an allowed unsecured claim and unless the plan provides for payment in full to all creditors, “all of the debtor’s projected disposable income to be received in the applicable commit-ment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.” 11 U.S.C. § 1325(b)(1)(B). The most complex and contentious issue under the BAPCPA Amendments is the change to the “projected disposable income” confir-mation test of Section 1325(b)(1), the Chapter 13 analog to the means test under Chapter 7. Under the pre-BAPCPA Code, “projected disposable income” was the difference between the debtor’s actual income and the debtor’s reasonably necessary expenses for the support of the debtor or a dependent of the debtor, i.e., the difference between the number at the bottom of Schedule I and the number at the bottom of Schedule J. The number would typically be the plan payment, which would then be paid to the creditors (and to debtor counsel’s fees) in their order of priority, with the residue, if any, paid to the allowed unsecured claims. In the case of below-median debtors, the expense side of the calcula-tion remained the same, i.e., the amounts reasonably necessary to be ex-pended for the maintenance or support of the debtor or a dependent of the debtor or a domestic support obligation, and for charitable contribu-tions. For above-median debtors, post-Hamilton, the Form B22C calcu-lation provides the starting point for the debtor’s projected disposable income. This calculation is then modified by the debtor’s actual pro-jected income; the B22C is based on the average of the debtor’s income in the six months prior to filing (which may have changed). The expense calculation for an above-median debtor utilizes blending of actual ex-penses and allowances in certain categories. The use of allowances for rent, utilities, and transportation, rather than actual expenses, is a radi-cal departure from the law prior to BAPCPA. The apparent Congressio-nal policy behind the use of allowances, based upon county of residence and size of household, was intended to standardize what similarly situ-ated debtors would pay, leaving less discretion to judges and trustees across the country. For this reason, reported decisions regarding dispos-able income under the prior law may be inapplicable. The trustee’s office uses a spreadsheet, referred to as the “Pay-ment Calculator” (“PC”), which is available on request. The PC is a form that distills the B22C and its pages of entries into just one page that reflects a post-Hamilton evaluation of a prospective plan payment. Ex-penses on the PC differ from Schedule J in that allowances are utilized on the PC that may or may not be the same figures noted on Schedule J. For further complicating things, the allowances utilized on the B22C and PC lump several budget items on Schedule J into one or more allow-ances, rendering comparison with actual expenses on Schedule J diffi-cult. The number at the bottom of the B22C, line 59, signifies the amount monthly to be multiplied by the number of months in the ACP that may

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need to be paid to general, unsecured, nonpriority creditors when objec-tions are lodged by creditors or the trustee. The state of the law is very much in flux, and all parties are wait-ing for further word from appellate courts, but for the time being the trustee is looking at the Form B22C and the PC for the determination of income and expenses. If the debtor’s actual income is greater or lesser, the trustee is going to use that number. If the debtor’ actual expenses are at odds with that calculation and are reasonable under the circum-stances, the trustee may allow the debtor’s calculation of reasonable and necessary expenses and the resulting plan payment.

10. Wage Order. Section 1325(c) empowers the court to issue orders directing employers to make payments directly to the Chapter 13 Trustee. In general, the Chapter 13 Trustee requires the submission of a wage order to ensure plan payments are paid. The wage order generally provides a substantial convenience to the debtor; absent a wage order, the debtor must mail plan payments using certified funds.

iV. LAW rEGArDinG SECurED CrEDiTOrS

A. Collateral Value and Cram-Down

“Collateral” can be the centerpiece of litigation through all chap-ters of the Bankruptcy Code. In Chapter 13, collateral valuation is criti-cal. In paragraph 2(b) of the form plan, the debtor will propose the val-ue of the secured claim (usually the collateral value) and the amount of monthly payments. For example, if a vehicle is worth $10,000 and the vehicle lender is owed $15,000, the “cram-down” amount would be $10,000. If the creditor can show the collateral is really worth $1,000 more, the secured creditor is entitled to another $1,000. This dynamic makes collateral valuation issues one of the most common of Chapter 13 issues. Under Section 1325(a) (unnumbered paragraph) (the “hanging paragraph”), a debtor cannot “cram down” the value of a motor ve-hicle (1) if the debtor purchased a motor vehicle within 910 days of the petition date and (2) the creditor has a purchase money security inter-est in the motor vehicle. In addition, cram-down is not available if the debtor incurred credit and used it to purchase other personal property within one year of the petition date. However, paragraph 2(b)(2) of the form plan provides that the court will approve a valuation proposed by debtor if the creditor fails to file a written objection to the plan (failure to object is deemed acceptance). While a debtor cannot cram down a “910” vehicle, the vehicle lender is still entitled to an unsecured deficiency claim if the vehicle is surrendered. Wells Fargo Fin. Acceptance v. Rodri-guez, 375 B.R. 535 (9th Cir. BAP 2007). The United States Supreme Court decided, in Associates Commer-cial Corp. v. Rash (In re Rash), that the value required to be paid in a Chap-ter 13 plan in a vehicle cram-down situation is what “the debtor would incur to obtain a like asset for the same ‘proposed . . . use.’ ” 520 U.S. 953, 965 (1997). The Supreme Court did not specifically identify a standard

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method for determining replacement value, but left the determination to the trier of fact, and noted that “a creditor should not receive portions of the retail price, if any, that reflect the value of items the debtor does not receive when he retains his vehicle, items such as warranties, inven-tory storage, and reconditioning.” Id. at n.6. Applying In re Rash, Judge Elizabeth L. Perris concluded that “valuation should be based on prices paid in the market that is accessible to the debtors, which includes, with-out limitation, sales by dealers to the public, auctions open to the public, and sales between private parties. That market is broader than the ‘re-tail’ market. One must then deduct from the prices realized at such sales the value added by reconditioning, warranties, and the cost of other services or additions provided by the seller.” In re McElroy, 210 B.R. 833, 835 (Bankr. D. Or. 1997). With enactment of BAPCPA, Congress slightly altered some of the Rash decision with regard to secured personal property held by in-dividual debtors. 11 U.S.C. § 506(a)(2) sets the cram-down value of a vehicle at its replacement value “without deduction for costs of sale or marketing.” And “[w]ith respect to property acquired for personal, fam-ily, or household purposes, replacement value [for the specified catego-ries of debtors] shall mean the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined.” Section 506(a)(2) does not specify the meaning of “cost of sale” or “marketing.” Presumably, items such as warranties and reconditioning expenses that increase the value of an automobile will remain appropriate deductions from the vehicle’s retail value. See, e.g., In re Nice, 355 B.R. 554, 557 (Bankr. N. D. W. Va. 2006). When a debtor trades in a motor vehicle in connection with pur-chasing a new one and the lender pays off the “negative equity” in the prior vehicle, the lender’s payoff of the deficiency on the trade-in is not entitled to purchase-money status. Under the “Dual Status Rule,” the hanging paragraph protects that portion of the lender’s debt allocable to the car purchased but does not protect the portion allocable to negative equity. AmeriCredit Fin. Servs. v. Penrod (In re Penrod), 611 F.3d 1158 (9th Cir. 2010) (cert denied, 132 S. Ct. 108 (2011)). The Chapter 13 plan contains a valuation motion, so it is critical that a creditor who objects to the proposed valuation objects to confir-mation. If the creditor receives proper notice and fails to object, then the value placed on the collateral in the plan will control.

B. interest rates

In paragraph 2(b) of the form plan, the debtor will also propose the interest rate for secured claims. Note that even where cram-down is unavailable, interest rate adjustment may be available. In re Henry, 353 B.R. 261 (Bankr. D. Or. 2006). Usually, with the amount at stake in a typical Chapter 13 case, it is not feasible to litigate over the rate of inter-est. Nine percent is the legal rate of interest in Oregon unless otherwise provided by contract. ORS 82.010. However, there is nothing magical

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about the 9% figure being correct. The Supreme Court has mandated a “formula approach” that provides a base rate with risk factors added.4

It will be a rare case where the creditor will be willing to spend litigation dollars on the interest rate issue in Chapter 13, especially when you consider that most Chapter 13 secured claims are fairly small. Creditors may object to the rate, however, and then negotiate a higher rate that is more acceptable; such negotiations are very common in con-junction with valuation disputes.

C. Monthly Payments/Adequate Protection

The debtor is sometimes allowed to change loan terms as part of the cram-down. However, the monthly payment must pay out with the stated rate of interest over the life of the plan. If the proposed payment stream will not pay the secured claim, then the plan is not feasible. In addition, from a creditor’s perspective, the creditor should not be put in a worse position in the Chapter 13. Thus, payments should at least cover interest and depreciation on the collateral; if not, the creditor can assert that it is not adequately protected. The new BAPCPA provision Section 1325(a)(5)(B)(iii) also pro-vides that, where there are to be periodic payments, they “shall be in equal monthly amounts.” Moreover, creditors are entitled to adequate protection. Creditors can argue that they are entitled to monthly pay-ments in an amount sufficient to cover interest accrual on the secured claim and depreciation on the collateral. If payments on an allowed se-cured claim are to be made by periodic payments, then such payments must be equal monthly payments. In re Bollinger, Case No. 10-62344, 2011 Bankr. LEXIS 3339 (Bankr. D. Or. September 2, 2011); In re Nguyen, Case No. 11-35979, 2012 Bankr. LEXIS 1514 (Bankr. D. Or. April 2, 2012). How-ever, Bollinger does not rule out balloon payments entirely and, where adequate protection payments are appropriate, such adequate protec-tion payments must be made. Id. at n.12.

4 The Till Court stated that “the approach begins by looking to the national prime rate, reported daily in the press, which reflects the financial market’s estimate of the amount a commercial bank should charge a creditworthy commercial borrower to compensate for the opportunity costs of the loan, the risk of inflation, and the rela-tively slight risk of default. Because bankrupt debtors typically pose a greater risk of nonpayment than solvent commercial borrowers, the approach then requires a bank-ruptcy court to adjust the prime rate accordingly. The appropriate size of that risk adjustment depends, of course, on such factors as the circumstances of the estate, the nature of the security, and the duration and feasibility of the reorganization plan. The court must therefore hold a hearing at which the debtor and any creditors may pres-ent evidence about the appropriate risk adjustment. Some of this evidence will be in-cluded in the debtor’s bankruptcy filings, however, so the debtor and creditors may not incur significant additional expense. Moreover, starting from a concededly low estimate and adjusting upward places the evidentiary burden squarely on the credi-tors, who are likely to have readier access to any information absent from the debtor’s filing (such as evidence about the ‘liquidity of the collateral market,’ Finally, many of the factors relevant to the adjustment fall squarely within the bankruptcy court’s area of expertise.” Till v. SCS Credit Corp., 541 U.S. 465, 479–80 (2004).

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D. Long-Term Debt

As noted above, Chapter 13 has very favorable home mortgage treatment provisions for the debtor’s residence. There is also favorable long-term debt treatment. Pursuant to Section 1322(b)(2), the rights of a holder of an allowed secured claim secured only by a security interest in real property that is the debtor’s principal residence cannot be modi-fied. Thus, the debtor cannot change the monthly payment and cannot lower the interest rate on the debtor’s home mortgage. In addition, the debtor must make all post-petition mortgage payments because a de-fault cannot be created. “[A] plan that proposes withholding of monthly installments due on the obligation for any period of time modifies the rights of the expected creditors in violation of Section 1322(b)(2).” In re Proudfoot, 144 B.R. 876, 878 (9th Cir. BAP 1992). However, the language of Section 1322(b) does not apply to a mortgage that is due by its terms (not accelerated) or that comes due during the life of the plan. In addition, the undersecured mortgage holder cannot be crammed down to the property value with respect to a debtor’s resi-dence. Nobelman v. American Savings Bank, 508 U.S. 324 (1993). However, if a mortgage creditor is completely unsecured, that mortgage creditor’s lien can be “stripped.” In re Zimmer, 313 F.3d 1220 (9th Cir. 2002). For example, if a property is worth $250,000 and there is a $300,000 senior mortgage on the property, a junior mortgage can be “stripped” because there is no equity for the lien to attach. This issue naturally turns on the valuation of the property, and litigation on this issue usually involves dueling appraisers opining on property value. If there is even one dollar of equity in the property to which the junior mortgage can attach, the lien cannot be stripped. Section 1322(b)(5) allows a Chapter 13 debtor to cure defaults and maintain payments during a Chapter 13 “on any unsecured claim or secured claim on which the last payment is due after the date on which the final payment under the plan is due.” Such long-term debts provided for under the plan are not discharged. 11 U.S.C. § 1328(a)(1). However, Chapter 13 does allow the debtor to cure the default status and essentially bring the account current during the Chapter 13. When the debtor leaves Chapter 13 (assuming all post-petition payments have been made), the debt should be current, and the debtor will continue payments as if the debtor had not filed Chapter 13. It is not uncommon for a judgment lien to attach to the debtor’s residence prior to the debtor filing Chapter 13. Section 522(f)(1) provides a mechanism for the debtor to avoid any judgment lien that “impairs” the debtor’s exemption. The debtor files a motion, and if the debtor is successful, the judgment lien will be “avoided” in the bankruptcy. Paragraph 6 of the District of Oregon form plan contains a spe-cific motion to avoid a judgment lien. If the judgment creditor does not object, the lien will be avoided as part of the order confirming plan. It is important to note that in Chapter 13, the discharge is not granted until the end of the case. In many Chapter 13 cases, plans are not fully performed. Usually, those Chapter 13 cases are dismissed. Dismissal

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of a bankruptcy case will “undo” the avoidance of the judgment lien. 11 U.S.C. § 349. However, the provision “undoing” the judgment lien avoidance won’t do much good for the secured judgment lien creditor whose lien was avoided in the plan, if during the Chapter 13 the debtor sold the residence and pocketed the sales proceeds.

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2–i

Chapter 2

ChAPTEr 13: DrAFTinG A ChAPTEr 13 PLAn FrOM ThEOry TO PrACTiCE—DEALinG WiTh TyPiCAL SCEnAriOS

Ann K. ChApmAn




Table of Contents

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1

II. Plan First, Draft Later . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1A. Who Will Be Paid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1B. How Much Will Be Paid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1C. When Will Creditors Be Paid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1D. What Special Circumstances Need to Be Addressed? . . . . . . . . . . . . . . . . . 2–1

III. Common Drafting Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–1A. Paragraph 1: Plan Payment and Duration (Known ACP) . . . . . . . . . . . . . . . 2–2B. Paragraph 1: Plan Payment and Duration (In re Reed) . . . . . . . . . . . . . . . . . 2–2C. Mortgage Arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–3D. Vehicle Cram-Down . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–4E. Vehicle Cram-Down (910 Claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–5F. Vehicle Not Modified But Paid Through Plan . . . . . . . . . . . . . . . . . . . . . 2–6G. Split Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–6H. Negative Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–7I. Attorney Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–8J. Surrender of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–8K. Estimated Percentage to Unsecured Creditors . . . . . . . . . . . . . . . . . . . . . 2–9L. Best Interest Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–9M. Solvent Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–9N. Executory Contracts and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–10O. Sale or Refinance of Real or Personal Property . . . . . . . . . . . . . . . . . . . . 2–10P. Lien Strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–11Q. Judicial Lien Avoidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–11

Appendix—Form Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–13

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Chapter 2—Chapter 13: Drafting a Chapter 13 Plan from Theory to Practice

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i. inTrODuCTiOn

While Section 1322 gives the debtor extensive powers and flex-ibility in drafting a Chapter 13 plan, debtors must express their plan through the court’s Local Bankruptcy Form (LBF) 1300.05—the Chapter 13 plan form (attached). The form provides a framework for the debtor to express his or her plan in a format that is understandable to all of the parties and easily administered by the trustee. With 3,516 Chapter 13 fil-ings in 2011 and more than 452 filings in 2012 (through April 30, 2012), standardized language and expression of plan provisions is critical to ensuring effective administration of the Chapter 13 system.

ii. PLAn FirST, DrAFT LATEr

Just as an architect wouldn’t start drafting blueprints until she had a clear vision of how a structure will be designed and operate, debt-or’s counsel should have a clear vision of how a debtor’s plan will func-tion before putting pencil to paper.

A. Who Will Be Paid?

The first step to drafting a plan is determining who will be paid by the plan. Some of these payments will be determined by the out-standing debts. The mortgage creditor’s arrears, the taxing authority’s priority claims, and the attorney’s outstanding attorney fees must all be paid through the Chapter 13 plan.

B. how Much Will Be Paid?

The plan is typically the last document drafted in preparing the debtor’s documents for a bankruptcy filing. The debtor’s monthly pay-ment will be determined by the Form B22C, Schedules I and J (Income and Expenditure), and the Trustee’s Payment Calculator.

C. When Will Creditors Be Paid?

Over the course of the plan, different creditors are entitled to dif-ferent things at different times. A secured creditor is entitled to adequate protection throughout the case. A secured creditor being paid in period-ic payments is entitled to “equal payments.” The administrative claims, including the debtor’s attorney fees, must be paid “[b]efore or at the time of each payment to creditors.” 11 U.S.C. § 1326(b).

D. What Special Circumstances need to Be Addressed?

The unparalleled flexibility of a Chapter 13 plan allows the debt-or to separately classify and treat certain claims, cram down or strip secured creditors, avoid liens impairing exemptions, or provide for the sale or refinance of assets to bring additional funds into the plan. Each of these circumstances needs to be addressed in the plan.

iii. COMMOn DrAFTinG SCEnAriOS

Each of these scenarios focuses on a single aspect of the debtor’s plan. The goal of each of these scenarios is isolate a single issue present in the debtor’s situation and address its drafting. For each scenario, it is

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presumed that there are sufficient supporting facts to ensure a feasible, confirmable plan. The form Chapter 13 Plan is attached; the relevant portions are printed below for easy reference.

A. Paragraph 1: Plan Payment and Duration (known ACP)

1. Scenario. Debtor will be paying $250 per month. The debtor’s applicable commitment period is 36 months.

2. Drafting. Payment and duration is entered in Paragraph 1.

1. The debtor shall pay to the trustee (a) a periodic pay-ment of $250.00 every month (insert either month or quarter); (b) all proceeds from avoided transfers, including proceeds from transfers avoided by the trustee; (c) upon receipt by the debtor, all net tax refunds attributable to prepetition tax years and net tax refunds attributable to postpetition tax years (i.e., tax refunds not included on Schedule I, less tax paid by debtor for a deficiency shown on any tax return for that same tax year or tax paid by setoff by a tax agency for a postpetition tax year) received during: [ ]The life of the plan, or [X] 36 or [ ] 60 months from the date the first plan payment is due (Check the appli-cable provision; if neither is checked, “for the life of the plan” applies); (d) a lump sum payment of $__________ on or before __________ (date); and (e) __________. Debtor acknowledg-es that if the debtor is ever more than 30 days delinquent on any payment due under section 1(a) of this plan, upon motion of the trustee granted by the court after appropriate notice, a wage deduction order to debtor’s employer may be issued immediately.

Matching duration is entered in Paragraph 8.

8. [To be completed if plan will not be completed until more than 36 months after the first plan payment due under the originally filed plan.] The approximate length of the plan is 36 months; cause to extend longer than 36 months is as fol-lows: N/A

If the debtor’s case would take 42 months to complete because of the BIN, priority obligations, or mortgage arrears, the Paragraph 8’s approximate length would be 42, and the reason would be: “Asset Pro-tection,” “Priority Taxes,” or “Secured Debt Payments” as appropriate. The reason may be brief. If the debtor’s applicable commitment period was 60 months, the [ ] 60 months checkbox would be selected, and Paragraph 8 would have the approximate length as 60 months with “Applicable Commitment Period” as the reason.

B. Paragraph 1: Plan Payment and Duration (In re Reed)

1. Scenario. Debtor will be paying $250 per month. The debtor’s B22C shows an above-median debtor with negative projected disposable income.

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2. Drafting. Payment and duration is entered in Paragraph 1.

1. The debtor shall pay to the trustee (a) a periodic pay-ment of $250.00 every month (insert either month or quarter); (b) all proceeds from avoided transfers, including proceeds from transfers avoided by the trustee; (c) upon receipt by the debtor, all net tax refunds attributable to prepetition tax years and net tax refunds attributable to postpetition tax years (i.e., tax refunds not included on Schedule I, less tax paid by debt-or for a deficiency shown on any tax return for that same tax year or tax paid by setoff by a tax agency for a postpetition tax year) received during: [X] The life of the plan, or [ ] 36 or [ ] 60 months from the date the first plan payment is due (Check the applicable provision; if neither is checked, “for the life of the plan” applies); (d) a lump sum payment of $__________ on or before __________ (date); and (e) __________. Debtor acknowledges that if the debtor is ever more than 30 days de-linquent on any payment due under section 1(a) of this plan, upon motion of the trustee granted by the court after appropri-ate notice, a wage deduction order to debtor’s employer may be issued immediately.

Duration is entered in Paragraph 8.

8. [To be completed if plan will not be completed until more than 36 months after the first plan payment due under the origi-nally filed plan.] The approximate length of the plan is 36 months; cause to extend longer than 36 months is as follows: N/A

Standard language is added as an additional paragraph.

12. Prior to the end of the 36th month, the Trustee is autho-rized to file an Order Modifying Plan that adjusts the commit-ment period to 60 months in ¶ 1(c) and ¶ 8 of the Plan, depend-ing on the Court’s decision in In re Reed, Case No. 10-38478.

C. Mortgage Arrears

1. Scenario. Debtor has not made 3 mortgage payments ($2,000 each, $6,000 total).

2. Drafting. Creditor is added to Paragraph 2(b)(1) with the estimated mortgage arrears in the “Estimated Arrearage If Curing” col-umn as shown below:

Creditor Collateral

Estimated Arrearage If Curing

Collateral Value If

Not Paying in Full

Estimated Total Debt If Paying

Debt in Full

Post-Con-firmation Interest

Rate

Equal Monthly

PaymentsMortgage Company

Personal Residence

$6,000 0% AAFAAF*

*AAFAAF = All available funds after attorney fees.

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Creditor is also added to Paragraph 4 as shown below with the secured creditor’s respective collateral in parentheses:

6. The debtor shall pay directly to each of the following creditors, whose debts are either fully secured or are secured only by a security interest in real property that is the debtor’s principal residence, the regular payment due postpetition on these claims in accordance with the terms of their respective contracts, list any prepetition arrearages in pt. 2(b), and/or specify any other treatment of such secured creditor(s) in an additional pt. at the end of this plan:

Mortgage Company (Personal Residence)

This monthly payment paid outside of the plan will be listed on Schedule J. In addition, the mortgage company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution).

D. Vehicle Cram-Down

1. Scenario. Debtor has a vehicle purchased more than 910 days prior to the petition date; the vehicle’s value is $10,000, but $20,000 is owed.

2. Drafting. Check the box: [X] MOTION TO VALUE COLLATERAL Creditor is added to Paragraph 2(b)(1) with the collateral value shown in the “Collateral Value If Not Paying in Full” column as shown below:

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly

PaymentsVehicle Finance

Company

2005 Carco Supreme

$10,000 4.25% $200 per month

In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan. If a vehicle is being crammed down in a plan, payments must be made through the plan—direct payments on a cram-down are not allowed.

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E. Vehicle Cram-Down (910 Claim)

1. Scenario. Debtor has a vehicle purchased less than 910 days prior to the petition date; the vehicle’s value is $10,000, but $20,000 is owed at 12.9% interest.

a. Option 1. Pay the secured debt in full, but at a reduced interest rate. Creditor is added to Paragraph 2(b)(1) with the estimated total debt in the “Estimated Total Debt If Paying Debt in Full” column as shown below:

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly


Company

2011 Carco Supreme

$20,000 4.25% $400 per month

In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan.

b. Option 2. Cram-down with creditor consent. Check the box: [X] SECURED CLAIM AMOUNT LIMITED WITH CREDITOR CONSENT Creditor is added to Paragraph 2(b)(2) with the Collateral Value in the “Collateral Value If Not Paying in Full” column as shown below:

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly


Company

2011 Carco Supreme

$10,000 4.25% $200 per month

In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan.

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F. Vehicle not Modified But Paid Through Plan

1. Scenario. Debtor has a vehicle claim that is not being modified but that will be paid through the plan pursuant to a trustee or creditor objection. 2. Drafting. Creditor is added to Paragraph 2(b)(1) with a reference to the additional paragraph language.

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly


Company

2011 Carco

Supreme

See ¶ 12

12. The claim of Vehicle Finance Company is not being mod-ified. It will be paid per ¶ 2(b)(1) during the life of the Plan in the monthly amount of $583.00, commencing with the payment disbursed by the Trustee at the end of July 2012. The Debtors will make the Vehicle Finance Company payments up through the payment due June 19, 2012. Upon discharge, the Debtors will recommence making the contractual payments to Vehicle Finance Company.

In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan. The trustee must have funds on hand to disburse on account of the secured creditor’s claim. In addition, while the trustee can disburse funds to a secured creditor prior to confirmation, the creditor must have filed a proof of claim on which the trustee may make payments. Co-ordination between the debtors continuing to make payments and the trustee having funds on hand to take over the payments may induce debtor’s counsel to have the debtors make a few initial post-petition payments outside of the plan followed by a step-up payment (an in-crease in the plan payment amount) a few months into the plan in order to ensure that the secured creditor is paid, a claim has been filed, and the trustee has sufficient funds on hand to make the payments to the secured creditor.

G. Split Claims

1. Scenario. Debtor has a vehicle purchased more than 910 days prior to the petition date; the vehicle’s value is $20,000, but $35,000 is owed. The debtor’s current disposable income is $250 per month, but in 12 months, the debtor will start receiving pension income of $250 per month.

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2. Drafting. Since the debtor cannot propose a feasible plan with equal monthly payments on the cram-down vehicles, one potential solution may be a split claim; this example ignores the legal issues raised by In re Bollinger, Case No. 10-62344, 2011 Bankr. LEXIS 3339 (Bankr. D. Or. September 2, 2011); In re Nguyen, Case No. 11-35979, 2012 Bankr. LEXIS 1514 (Bankr. D. Or. April 2, 2012). This language is only appli-cable to Trustee Wayne Godare–administered cases. Trustee Fred Long’s cases are automatically administered to have all available funds paid to secured creditors. Check the box: [X] MOTION TO VALUE COLLATERAL Creditor is added to Paragraph 2(b)(1) as shown below:

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly


Company

2011 Carco Supreme

$10,000 4.25% $200 per month

Vehicle Finance

Company

2011 Carco Supreme

$10,000 4.25% AAFAAF*

(SAME VEHICLE)

*AAFAAF = All available funds after attorney fees. In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan.

h. negative Equity

1. Scenario. Debtor has a vehicle purchased less than 910 days prior to the petition date; the vehicle’s value is $20,000, but $35,000 is currently owed. The amount initially financed was $40,000, which in-cluded $15,000 in negative equity.

2. Drafting. Under the “Dual Status Rule,” the hanging paragraph of Section 1325(a) protects that portion of the lender’s debt allocable to the car purchased but does not protect the portion allocable to negative equity. AmeriCredit Fin. Servs. v. Penrod (In re Penrod), 611 F.3d 1158 (9th Cir. 2010) (cert denied, 132 S. Ct. 108 (2011)). In the above example, the Purchase Money Security Interest (PMSI) portion of the current obligation is the same percentage as was originally financed, or 62.5% ($21,875). Check the box: [X] MOTION TO VALUE COLLATERAL

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Creditor is added to Paragraph 2(b)(1) with the PMSI portion of the debt shown in the “Collateral Value If Not Paying in Full” column as shown below:

Creditor Collateral


Collateral Value If

Not Paying in Full


Debt in Full


Rate

Equal Monthly


Company

2005 Carco Supreme

$21,875 4.25% $200 per month

Amount of claim reduced to 62.5% for negative equity, and the remainder treated as an unsecured claim.

In addition, the vehicle finance company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., cer-tified mail if an FDIC-insured financial institution). Finally, Schedule J should not contain a car payment for this vehicle since the payment will be made through the plan. If the vehicle in this example was worth more than the PMSI por-tion of the obligation, the collateral value would control. The higher of the current collateral value or the PMSI portion of the obligation is the amount which the creditor must be paid.

i. Attorney Fees

1. Scenario. The Attorney Fee Disclosure (LBF 1305) shows Schedule 2, flat fee attorney fees of $3,250. The debtor has previously paid $219 to the attorney.

2. Drafting. The total and unpaid attorney fees are listed in Paragraph 2(b)(4); if 2(b)(1) includes both fixed and “All Funds Avail-able After Attorney Fees” (AAFAAF), then Standard Language Para-graph 11 should be used as the “other” language. If all 2(b) payments are fixed payments and there will be no supplemental attorney fees (i.e., Schedule 1 flat fee), the first checkbox may be used.

(b) (4) Attorney Fees: Original attorney fees are $3,250 of which $3,031 remains unpaid. Said fees are to be paid either: [ ] From all available funds after pt. 2(b) payments are made; or [X] Other—All attorney fees, including supplemental compen-sation, shall be paid from all available funds after any fixed per-month payments in 2(b) are made.

It is important that the ¶ 2(b)(4) attorney fees match the Attorney Fee Disclosure.

J. Surrender of Collateral

1. Scenario. The debtor will no longer be making payments to a secured creditor on collateral.

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All creditors listed in Schedule D (Secured Creditors) should be listed in the plan (either as being paid through the plan (¶ 2(b)), paid outside the plan (¶ 4), surrendered (¶ 2(b)(5)), or addressed in a separate paragraph (i.e. lien avoidance)).

2. Drafting. The surrendered collateral is included in Para-graph 2(b)(5).

(b) (5) The debtor shall surrender any collateral not otherwise addressed by the terms of this plan no later than upon confirmation of this plan to the following (i.e., state credi-tor NAME followed by DESCRIPTION of collateral to be surren-der: Iron Bank of Braavos (Sable Hall—rental property)

k. Estimated Percentage to unsecured Creditors

1. Scenario. Using the Trustee’s Feasibility Analysis, unse-cured creditors will receive approximately 17% of the claims.

2. Drafting. The estimated percentage is included in Para-graph 2(f)(1).

(f) (1) The creditors will receive approximately 17% of their claims. Payment of any dividend will depend on secured claims at the time of confirmation, the total amount of allowed claims, and the costs of administration, including all allowed at-torneys’ fees of the debtor.

L. Best interest number

1. Scenario. Using the Trustee’s Liquidation Analysis to cal-culate the Best Interest Number shows that the BIN is $4,561.78.

2. Drafting. The BIN is included in Paragraph 2(g).

(g) [Not Applicable if NA inserted in the blank] Pursuant to § 1325(a)(4), the “best interest of creditors” number is deter-mined to be $4,562, and not less than that amount shall be dis-tributed to unsecured creditors.

Only whole numbers (no change) should be used.

M. Solvent Debtor

1. Scenario. The debtor is solvent.

2. Drafting. In a solvent estate where creditors will be paid 100%, unsecured creditors are entitled to interest at the current 2(h) rate; this information can be obtained from the Chapter 13 Trustee’s office; it is currently 1%.

(f) (2) The creditors will receive a minimum 100% of their claims. This percentage will not be reduced despite the amount of total creditor’s claims filed.

(h) [Not Applicable if NA is inserted in the blank] Pursuant to §1325(a)(4), all allowed unsecured claims shall receive inter-est of 1% from the time of confirmation.

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n. Executory Contracts and Leases

1. Scenario. Debtor has a four-year lease that the debtor will be assuming; the debtor is behind $450 in CAM payments.

2. Drafting

3. The debtor ASSUMES the following executory contracts and leases:

CreditorAmount of Default

[State If None] Cure ProvisionsLeasing Company $450 Payment in full

within 7 days of confirmation.

Only whole numbers (no change) should be used. In addition, the leasing company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., certified mail if an FDIC-in-sured financial institution).

O. Sale or refinance of real or Personal Property

1. Scenario. The debtor owns a house with $35,000 in exempt equity; the sale or refinance of the property will be required to provide sufficient funds into the plan to complete the case.

2. Drafting. Utilizing the Trustee’s Standard Language (¶ 2 or 3, as applicable), add additional paragraphs after the last printed para-graph on the form plan, adapted for the debtor’s particular situation. The treatment of proceeds from the sale is indicated in Paragraph 1(e).

¶ 1(e): proceeds from the sale or refinance of real property as outlined in ¶ 12

12. The debtor shall sell or refinance the debtor’s personal residence located at 123 Main St., Aloha, OR 97123, not later than June 2014 and shall pay to the Trustee from the proceeds at closing, funds sufficient to pay all creditors secured by the subject property remaining in the plan. Secured creditor is First Bank of Tillamook, N.A. Debtor shall also pay to the Trustee for distribution through the Plan, non-exempt proceeds to the ex-tent required by the Trustee’s payoff quote. The debtor shall obtain the Trustee’s permission prior to any sale or refinance and to obtain that permission, provide copies to the Trustee of a preliminary closing statement and title report. The debtor shall provide the Trustee with a copy of the final closing state-ment within 15 days following the close of the sale or refinance.

Compare the above language with the Trustee’s Standard Lan-guage of ¶ 2. The time for sale or refinance should be a calendar refer-ence rather than a reference to a particular month of the plan.

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P. Lien Strip

1. Scenario. The debtor owns a house with a fair market val-ue of $250,000. The balance on the first mortgage is $300,000; a second mortgage of $78,000 is owed to Subprime Loanhaus LLC and is wholly unsecured.

2. Drafting. Utilizing the Trustee’s Standard Language (¶ 4), add an additional paragraph after the last printed paragraph on the form plan, adapted for the debtor’s particular situation.

12. Pursuant to § 506, and within 60 days after confirmation, debtor will file an adversary proceeding or motion to avoid the junior lien held by Subprime Loanhaus LLC in the real property located at 123 Main St., Aloha, OR 97123, and legally described as Lot 13, CHAPMAN COMMONS, in the City of Aloha, County of Washington, State of Oregon. Entry of the Order Confirming Plan is not res judicata with respect to this lien. Any Judgment or Order avoiding such lien shall be void and such lien shall be reinstated if the case is dismissed or converted. If the lien credi-tor has filed a secured claim and the lien is avoided, the claim will be treated as an allowed unsecured claim.

In addition, the second mortgage company would be added in the service section to receive appropriate service under FRBP 7004 (i.e., first-class mail addressed to a registered agent). While the service lan-guage does not require service on this party as a condition of confirma-tion, there is dispute about the source of authority for lien stripping. One of the potential sources for authority is Section 1322; in that case, proper service of the plan would be required even if the creditor is sub-sequently properly served with the Notice and Motion to Avoid Lien (LBF 1317, et seq.) or an adversary proceeding. For the same reason, it may be advisable to include sufficient description of the property, in-cluding both street and legal descriptions, in the plan. Once the wholly unsecured lien has been avoided, don’t forget to update the property records by recording a certified copy of the order with the appropriate recording office.

q. Judicial Lien Avoidance

1. Scenario. Prior to filing, a creditor (“Montel Payday Loans, Inc.”) obtained a judgment against debtor for $5,000. The debtor owns a house with $25,000 in equity that is wholly protected by her homestead exemption.

2. Drafting. Check the box: [X] MOTION TO AVOID LIENS The creditor is included in Paragraph 6(a).

6. (a) The debtor MOVES, pursuant to § 522(f)(1)(A), to avoid the judicial liens of the following creditors because they impair an exemption(s) of the debtor: Montel Payday Loans, Inc.(b) The debtor MOVES, pursuant to § 522(f)(1)(B), to avoid the non–purchase money security interests of the following

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creditors because they impair an exemption(s) of the debtor: N/A

Absent objection from a creditor, filed prior to the first date set for the confirmation hearing on this plan, the order of confirmation will avoid its lien and its claim will be treated in ¶ 2(f). In addition, the judgment creditor would be added in the service section to receive appropriate service under FRBP 7004 (i.e., first-class mail addressed to a registered agent). Once the judicial lien has been avoided, don’t forget to update the property records by recording a cer-tified copy of the order with the appropriate recording office.

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APPEnDiX—FOrM PLAn

1300.05 (10/17/05) Page 1 of 4 [NOTE: Printed text may NOT be stricken!]

UNITED STATES BANKRUPTCY COURTDISTRICT OF OREGON

In re )) Case No. ) (NOTE: If blank, Case No. will be) on the Meeting of Creditors Notice))) CHAPTER 13 PLAN DATED

Debtor(s) ) MOTION TO VALUE COLLATERALMOTION TO AVOID LIENSSECURED CLAIM AMOUNT LIMITED WITH CREDITOR CONSENT

[MARK above IF applicable]

1. The debtor shall pay to the trustee (a) a periodic payment of $________________________________________________________every____________________________________________________________________________________(insert either month orquarter); (b) all proceeds from avoided transfers, including proceeds from transfers avoided by the trustee; (c) upon receipt by the debtor,all net tax refunds attributable to prepetition tax years and net tax refunds attributable to postpetition tax years (i.e., tax refunds notincluded on Schedule I, less tax paid by debtor for a deficiency shown on any tax return for that same tax year or tax paid by setoff bya tax agency for a postpetition tax year) received during: The life of the plan, or 36 or 60 months from the date the first planpayment is due (Check the applicable provision; if neither is checked, “for the life of the plan” applies); (d) a lump sum payment of$___________________on or before ___________(date); and (e)____________________________________________________________________________________________________________________________________________________________.Debtor acknowledges that if the debtor is ever more than 30 days delinquent on any payment due under section 1(a) of this plan, uponmotion of the trustee granted by the court after appropriate notice, a wage deduction order to debtor's employer may be issuedimmediately.

2. The trustee shall apply all funds received pursuant to pt. 1 as follows:(a) First, to the trustee's commission and expenses.(b) Second, with respect to secured creditors, the terms of the debtor’s prepetition agreement with each secured creditor shall continue

to apply, except as otherwise provided in this plan or in the confirmation order. Secured creditors shall retain their liens until thepayment of the underlying debt, determined under nonbankruptcy law, or discharge under §1328, as appropriate. Any allowedsecured claims will be paid as shown below. Should the trustee not have sufficient funds in trust to pay fully the disbursementslisted below, disbursements of funds available shall be made pro rata.

(1) If a creditor is not fully secured, the unsecured portion of the creditor’s claim shall be treated under the provisions of pt. 2(e)and (f) if the claim identifies the priority position of the claim, and, if not, under the provisions of pt. 2(f) only. HOWEVER, THECLAIMS OF CREDITORS SECURED BY PURCHASE MONEY SECURITY INTERESTS IN (i) A MOTOR VEHICLEACQUIRED FOR PERSONAL USE BY THE DEBTOR(S) WITHIN 910 DAYS PRECEDING THE FILING DATE OF THEPETITION, OR (ii) ANY OTHER PERSONAL PROPERTY COLLATERAL ACQUIRED WITHIN ONE (1) YEAR PRECEDINGTHE FILING DATE OF THE PETITION SHALL BE TREATED AS FULLY SECURED except as provided in pt. (b)(2) below,if applicable. The following also apply:

From the payments received pursuant to pt. 1, if a claim has been timely filed and allowed as secured, make payments to thefollowing holders of such claims as detailed below. ESTIMATED PREPETITION ARREARAGES, IF CURING ANDREINSTATING, MUST BE SHOWN BELOW. THE ARREARAGES SHOWN IN A TIMELY FILED AND ALLOWED SECUREDCLAIM SHALL CONTROL.

EstimatedEstimated Collateral Total Debt Post- EqualArrearage Value if Not if Paying confirmation Monthly

Creditor Collateral if Curing Paying in Full Debt in Full Interest Rate Payments

If the collateral is not to be sold, and the provisions in capital letters above governing claims of creditors withpurchase money security interests in personal property do not apply, the value of the collateral, where the debtor isnot paying the debt in full, shall be fixed in the amount stated above for purposes of administration of this plan as

None

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well as for purposes of determining the amount of any secured claim, if undersecured, unless objected to at or beforethe first date set for the confirmation hearing on this plan or, if applicable, prior to expiration of time to object to anyproposed modified plan, in which case the value will be determined by the court. If the collateral is to be sold, thevalue shall be the sales price. The debtor MOVES the court for an order so fixing the value of the collateral.Otherwise, the creditor’s proof of claim shall control.

(2) DEBTOR PROPOSES THAT THE CREDITOR(S) SPECIFICALLY IDENTIFIED BELOW AGREE TO THE FOLLOWINGTREATMENT WHICH THE COURT MIGHT NOT BE ABLE TO APPROVE ABSENT CONSENT OF CREDITOR(S). FAILURE OF CREDITOR TO FILE A WRITTEN OBJECTION TO THIS PLAN PRIOR TO CONFIRMATION SHALLCONSTITUTE ACCEPTANCE OF THE PLAN.

From the payments received pursuant to pt. 1, if a claim has been timely filed and allowed as secured, make payments to thefollowing holders of such claims as detailed below. ESTIMATED PREPETITION ARREARAGES, IF CURING ANDREINSTATING, MUST BE SHOWN BELOW.

EstimatedEstimated Collateral Total Debt Post-Arrearage Value if Not if Paying confirmation Payment

Creditor Collateral if Curing Paying in Full Debt in Full Interest Rate Provisions

If the collateral is not to be sold, for purposes of administration of this plan and case, the secured claim shall belimited to the value of the collateral stated above unless creditor objects at or before the first date set for theconfirmation hearing on this plan or, if applicable, prior to expiration of time to object to any proposed modified plan,in which case the value will be determined by the court. The debtor MOVES the court for an order so fixing the valueof the collateral. If the collateral is to be sold, the value shall be the sales price.

(3) Adequate protection payments shall be disbursed by the trustee pre-confirmation from funds on hand with the trustee in thepayment amounts specified in the plan for personal property secured creditors, absent a provision in this plan or a court orderproviding for a different amount to be paid pre-confirmation. If the debtor fails to make a monthly payment sufficient to pay theadequate protection payments in full, the trustee will disburse the funds pro rata according to the monthly payments proposedfor those creditors. Adequate protection payments paid through the trustee pre-confirmation will be deducted from the amountof the allowed claim. Unless the concerned creditor is fully secured or oversecured for purposes of §506 or §1325(a)(9), nointerest shall be paid from the date of the filing of the petition to the date of confirmation unless otherwise specifically providedfor in the payment provisions set forth above.

(4) Attorney Fees: Original attorney fees are $________________; of which $________________remains unpaid. Said fees are to be paid either: From all available funds after pt. 2(b) payments are made; or Other -

(5) The debtor shall surrender any collateral not otherwise addressed by the terms of this plan no later than upon confirmation ofthis plan to the following (i.e., state creditor NAME followed by DESCRIPTION of collateral to be surrendered):

(c) Third, pro rata until fully paid, allowed unsecured domestic support obligations.(d) Fourth, allowed administrative expenses under §507(a)(2).(e) Fifth, pro rata, until fully paid, to allowed priority claims in the order stated in §507(a)(3)-(10), including §1305 claims, unless

otherwise ordered.(f) Sixth, pro rata, to timely filed and allowed nonpriority unsecured claims, the amounts required by §1325(b)(1). These monies will

be distributed in the method indicated in the section marked below [MARK ONLY ONE]. The terms of pt. 8 shall also apply.(1) The creditors will receive approximately ________% of their claims. Payment of any dividend will depend upon secured

claims at the time of confirmation, the total amount of allowed claims, and the costs of administration, including all allowedattorneys' fees of the debtor.

(2) The creditors will receive a minimum ________% of their claims. This percentage will not be reduced despite the amountof total creditors' claims filed.

None

None

0

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(g) [Not Applicable if NA inserted in the blank] Pursuant to §1325(a)(4), the "best interest of creditors" number is determined to be$________________, and not less than that amount shall be distributed to unsecured creditors.

(h) [Not Applicable if NA is inserted in the blank] Pursuant to §1325(a)(4), all allowed unsecured claims shall receive interest of________% from the time of confirmation.

3. The debtor ASSUMES the following executory contracts and leases:Creditor Amount of Default [State if None] Cure Provisions

Those executory contracts or leases not specifically mentioned above are treated as rejected. Any timely filed and allowed claimarising from rejection shall be treated under pt. 2(f). The debtor will pay all assumed executory contracts and leases directly, includingamounts required to cure. The debtor shall surrender any property covered by rejected executory contracts or leases to the affectedcreditor no later than upon confirmation of this plan.

4. The debtor shall pay directly to each of the following creditors, whose debts are either fully secured or are secured only by a securityinterest in real property that is the debtor's principal residence, the regular payment due postpetition on these claims in accordancewith the terms of their respective contracts, list any prepetition arrearages in pt. 2(b), and/or specify any other treatment of suchsecured creditor(s) in an additional pt. at the end of this plan:

5. Subject to the provisions of §502, untimely claims are disallowed, without the need for formal objection, unless allowed by court order.

6. (a) The debtor MOVES, pursuant to §522(f)(1)(A), to avoid the judicial liens of the following creditors because they impair anexemption(s) of the debtor:

(b) The debtor MOVES, pursuant to §522(f)(1)(B), to avoid the non-purchase money security interests of the following creditorsbecause they impair an exemption(s) of the debtor:

Absent objection from a creditor, filed prior to the first date set for the confirmation hearing on this plan, the order of confirmation willavoid its lien and its claim will be treated in pt. 2(f).

7. Except as otherwise provided herein, postpetition interest on all unsecured claims is disallowed. Interest continues to accrue on debtsthat are excepted from discharge.

8. [To be completed if plan will not be completed until more than 36 months after the first plan payment due under the originally filedplan.] The approximate length of the plan is _____ months; cause to extend longer than 36 months is as follows:

Except as otherwise explicitly provided by pt. ______, Debtor(s) shall make plan payments for 36 months, unless the debtor(s) pays100% of all allowed claims with appropriate interest,except the plan payments shall continue for more than 36 months to the extent(1) the plan proposes a longer period, not to exceed 60 months, as necessary to complete required payments to creditors, or (2)§1322(d)/1325(b) requires plan payments for a longer period.

9. This plan may be altered postconfirmation in a non-material manner by court order after notice to the debtor, the trustee, any creditorwhose claim is the subject of the modification and any interested party who has requested special notice.

10. Debtor(s) certifies that all postpetition domestic support obligations have been paid in full on the date of this plan and will be paid infull at the time of the confirmation hearing.

n/a

n/a

None

None

None

None

36None

n/a

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11. Debtor(s) further certifies that the petition was filed in good faith, and this plan was proposed in good faith and not by any meansforbidden by law.

____________________________________________ ____________________________________________DEBTOR DEBTOR

IN ORDER TO ASSURE PROPER SERVICE ON ALL CREDITORS LISTED IN pts. 2(b)(1), 2(b)(2) OR 6 OF THE PLAN pursuant toFRBPs 3012, 4003(d), 9014 and 7004: (a) I LISTED ON THE MAILING MATRIX such creditors, other than insured depositoryinstitutions, in care of a person or entity authorized to be served; AND (b) I SERVED VIA CERTIFIED MAIL, ON ______________,COPIES OF THIS PLAN ON any insured depository institution(s) affected by pts. 2(b)(1), 2(b)(2), or 6 of the Plan [FRBP 7004(h)];AND (c) THE FOLLOWING LIST SEPARATELY IDENTIFIES all such creditors served via matrix listing and such creditors servedvia certified mail INCLUDING the names AND addresses of ALL such creditors served (NOTE: With respect to creditors servedvia matrix listing, the list of names and addresses IS IDENTICAL to that included in the matrix):

_______________________________DEBTOR OR DEBTOR’S ATTORNEY

n/a

SERVED VIA MAILING MATRIX AND CERTIFIED MAIL:

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Chapter 3

ChAPTEr 13 TruSTEE’S OFFiCEWAyne GodAre

Chapter 13 TrusteePortland, Oregon

Table of Contents

Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–1

The Nuts and Bolts of Chapter 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–3

Standard Language Paragraphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–13

Feasibility Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–33

Liquidation Program—Excel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–43

Payment Calculation—Excel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–45

Debtor Handbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–48

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Chapter 3—Chapter 13 Trustee’s Office

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Home Calendar Debtor Ed Contact Us Tools Standard Language Escrow Links Forms Careers

***New Proof Of Claim Form*** Frequently Asked Questions

Correspondence Address:1300 SW 5th Ave

Suite 1700Portland, OR 97201

(503) 972-6300fax: (503) 972-6313

Office Hours:9:00 am to 4:00 pm

(Closed from 12pm to 1pm)Monday - Friday

Payment Address:Wayne Godare

Chapter 13 TrusteeP.O. Box 420

Memphis, TN 38101-0420

Welcome to Wayne Godare's Chapter 13 Website.

This site will provide you with general information about my office andupcoming events in the bankruptcy community.

We believe that each person involved in the bankruptcy process, from beginningto end, contributes to the success of a Chapter 13 Plan.

My staff and I look forward to working with all of you throughout the life of thePlan.

-

Questions regarding this site? Images courtesy of www.oregonscenics.com

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STANDARD LANGUAGE PARAGRAPHS

Revised Date: April 30, 2012

The following additional paragraphs are offered as examples for specific factual circumstances that require additions to a Plan as separate paragraphs. They are offered to facilitate consistency, commonality and ease of administration by the Trustee. While they should be tailored to meet your specific facts, they should retain as much of the original language as possible. In some instances, the Trustee will insist they be used exactly as written below. The suggested text is set out in bold.

Definition:“Permo” means per month. Commonly used to define a

particular monthly payment

INDEX

1. SPECIFIC INSTRUCTIONS FOR PARAGRAPHS 1(d) & (e)

2. SALE OR REFINANCE OF REAL PROPERTY

3. SALE OF PERSONAL PROPERTY

4. LIEN STRIPPING

5. EXEMPTING EARNED INCOME CREDIT

6. OVERTIME , BONUS OR COMMISSION INCOME

7. REQUIREMENT TO PROVIDE TAX INFORMATION TO THE TRUSTEE

8. PAYING LESS TO CREDITORS THAN TO ATTORNEY FEES

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9. SPLIT CLAIMS IN PARAGRAPH 2b FOR PAYMENT OF ADEQUATE PROTECTION AND ALL AVAILABLE FUNDS ON A SINGLE PIECE OF COLLATERAL

10. NEGATIVE EQUITY

11. SUPPLEMENTAL FEE APPLICATIONS

12. FUTURE EMPLOYMENT

13. FUTURE AUTOMOBILE PURCHASE

14. FUTURE CHARITABLE CONTRIBUTIONS IN A PLAN

15. HIGH HOME MAINTENANCE EXPENSES (repairs and upkeep)

16. DISCOVERED INCREASED INCOME

17. FAILURE TO MAKE PLAN PAYMENT “DROP DEAD”

18. ALTERNATIVE TO THE TRUSTEE’S PURSUIT OF A PREFERENTIAL or FRAUDULENT TRANSFER

19. CO-SIGNED CLAIMS

20. §1305 CLAIMS IN PLAN

21. AGREEMENT TO RETAIN OBJECTIONABLE INCOME AND/OR BUDGET ENTRIES IN EXCHANGE FOR 100% PLAN OR ADDITIONAL AMOUNT TO UNSECURED

22. IMPROPER PERFECTION

23. ONGOING MORTGAGE PAYMENTS THROUGH PLAN

24. PAYMENT OF A PORTION OF A LONG TERM AUTO OBLIGATION AFTER DISCHARGE

25. PENDING LOAN MODIFICATION

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26. RECIPROCAL CLAIM CASES

27. SECTION 1322(B)(5) LONG TERM STUDENT LOANS THAT ARE NONDISCHARGEABLE AND IN DEFAULT

28. SEPARATE CLASSIFICATION OF STUDENT LOANS (OR OTHER CLAIMS) AFTER THIRTY SIXTH PAYMENT(Available only for below median debtors)

29. POST DISMISSAL OR CONVERSION PAYMENTS TO A CREDITOR

30. RETENTION OF TAX REFUNDS

1. SPECIFIC INSTRUCTIONS FOR PARAGRAPHS 1(d) & (e)

A. Paragraph 1(d) is for the inclusion of a lump sum when the amountand approximate date of receipt is known. The Trustee's office must know the source of the funds which must be included in the text, either in a separate paragraph with reference to 1(d) or in 1(d) itself. For example, “$8,000 on 8/2010 through a withdrawal from debtor’s 401k fund” or “$8,000 to be provided by a gift from debtor’s uncle” B. Paragraph 1(e) is for funds not found in any other part of Paragraph 1.For example, funds that may be brought into the plan but the certainty and timing are unknown at confirmation. Again, the Trustee's office will require information disclosing the source of the funds, i.e. “and any nonexempt proceeds from personal injury suit detailed on Schedule B.”

NOTE: Unless specific directions to the contrary are included in the confirmed plan, all of paragraph 1(b) - (e) receipts, will be disbursed to paragraphs 2(c) - (f) if balances are owed. If it is the intent that any funds from paragraphs 1(b) - (d) are to be disbursed to 2(b) secured creditors, “All available funds” must be used (either before or after attorney fees) or specific directions that will not create an administrative burden on the trustee.

NOTE: Once specific set amounts are paid in paragraphs 2(b), the plan dictates that any additional funds each month are to be paid to paragraphs 2(c) – (f)

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2. SALE OR REFINANCE OF REAL PROPERTY

If the Plan proposes a sale or refinance of real property, a separate paragraph with specific language outlining the sale details and distribution of the proceeds must be added. If the sale or refinance is expected to net a distribution through paragraph 1 of the Plan, subsection (e) of that paragraph should so state. Individual creditors may require additional language as a condition to the withdrawal of Objections to Confirmation.

EXAMPLE:

Paragraph 1(e) "proceeds from the sale or refinance of real property as outlined in paragraph 12"

Paragraph 12 "The debtor(s) shall sell or refinance (adequately describe property) not later than (date) and shall pay to the Trustee from the proceeds at closing, funds sufficient to pay all creditors secured by the subject property remaining in the plan. Secured creditors are _________________. Debtor(s) shall also pay to the Trustee for distribution through the Plan, nonexempt proceeds to the extent required by the Trustee’s payoff quote. The debtor(s) shall obtain the Trustee’s permission prior to any sale or refinance and to obtain that permission, provide copies to the Trustee of a preliminary closing statement and title report. The debtor(s) shall provide the Trustee with a copy of the final closing statement within 15 days following the close of the sale or refinance. “

REMEMBER: If the sale or refinance is to complete the case and it occurs within the “applicable commitment period”, it will require a 100% payoff.

3. SALE OF PERSONAL PROPERTY

If the Plan proposes sale of personal property, the proceeds of the sale should be referenced in one of two ways. 1) in Paragraph 1(e) with a corresponding separate paragraph providing specific details of the sale (see example below); or 2) if funds have already posted to the debtor’s receipt ledger or receipt of the funds are imminent, simply include the sale amount in paragraph 1(d)

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EXAMPLE:Paragraph 1(e): "proceeds from the sale of horses as outlined in

paragraph 12."

Paragraph 12: "The debtor(s) shall sell their six horses and pay all nonexempt proceeds of the sale to the Trustee. Within fifteen (15) days of the sale, debtor(s) shall file a report with the Trustee detailing the property sold, the selling price, the name, phone number and relationship, if any, of the purchaser, along with details of any retained proceeds claimed as exempt.”

4. LIEN STRIPPINGWhen it is the intention of a plan to “strip” off a fully under secured

lien on the debtors’ residential property, the following language should be added to the plan by separate paragraph.

“Pursuant to §506, and within 60 days after confirmation, debtor(s) will file an adversary proceeding or motion to avoid the junior lien held by ____________________ in the real property located at _______________________. Entry of the Order Confirming Plan is not res judicata with respect to this lien. Any Judgment or Order avoiding such lien shall be void and such lien shall be reinstated if the case is dismissed or converted. If the lien creditor has filed a secured claim and the lien is avoided, the claim will be treated as an allowed unsecured claim.”

In the event the junior lien payment is included on Schedule J, the following language must be added:

“Any payments scheduled for the junior lien will be paid into the trust fund of debtors’ attorney until such time as the adversary is decided. In the event that the junior lien is stripped off, those funds shall immediately be paid to the Trustee for distribution through the plan, pursuant to paragraph 1(e) and an amended schedule J filed without the payment listed and the plan payment increased accordingly. In the event that the junior lien is not stripped off, the appropriate funds shall be forwarded by debtors’ attorney to the lien holder with any excess forwarded to the Trustee.”

If this language is added, paragraph 1(e) of the plan must include the following "any proceeds from the attorney trust fund account as outlined in paragraph ____.

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5. EXEMPTING EARNED INCOME CREDIT

You must either exempt the EIC on Schedule C pursuant to §18.345(n) or, add the following as a separate paragraph:

“Notwithstanding the provisions of Paragraph 1(c) of this Plan, debtor(s) shall not be required to pay any Earned Income Credit funds to the Trustee during the life of the Plan.”

6. OVERTIME , BONUS OR COMMISSION INCOME

(To be used where the debtors or the trustee feels that the inclusion of the additional funds should be added as projected disposable income)

NOTE: Use only whichever of the three possibilities fit the circumstances of your case. If the debtor will receive only overtime, just add overtime, if only bonuses add only bonuses and so forth. Do not copy all three possibilities if they are not present in the case. Also be aware that there is a difference in the amount to be paid in between bonuses, commissions (net) and overtime (1/3 gross).

"During the life of the Plan, the debtor(s) shall pay to the Trustee, during the month of receipt all bonuses and/or commissions, less any tax obligations, and/or one third (1/3) of any gross overtime wages. Debtor(s) must make such payments by separate money order or cashier check and state on the check whether from 'overtime, commissions or bonus earnings'. At the end of each calendar year during the life of the Plan, the debtor(s) shall provide the Trustee with a copy of the year end pay stub for each employment during that year.Should the debtor not provide this information, the Trustee may calculate the additional commissions, bonuses or overtime amounts based upon the difference between the tax returns and the most recent Schedule I and add the calculated amount to the plan base. Debtor(s) must pay the amount of this calculation into the plan prior to receiving a discharge.”

Note: If overtime is included on Schedule I, insert the following additional language in the paragraph above after the word "commissions" at the end of the first sentence. "commissions, over and above the overtime of$ ______ previously listed on Schedule I.

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7. REQUIREMENT TO PROVIDE TAX INFORMATION TO THE TRUSTEE

Quarterly returns:

“Debtor(s) shall provide to the Trustee copies of quarterly IRS Form 1040ES, 941, along with proof of payment. Copies shall be submitted to the Trustee within 30 days of filing with the IRS.”

All returns:

“During the life of the plan, the debtor(s) shall timely file all required tax returns and provide copies along with proof of payment to the Trustee not later than June 1st of each year. Should the debtor(s) fail to provide said proof to the Trustee, the Chapter 13 case may be immediately dismissed upon the filing of a statement of failure to comply by the Trustee.”

8. PAYING LESS TO CREDITORS THAN TO ATTORNEY FEES

In some instances, the amount proposed for attorney fees exceeds the proposed amount paid to creditors. If the debtor has a previous Chapter 7 that, due to the time restraints §727(a)(8), prevents the debtor from a subsequent Chapter 7 filing, and the plan proposes to pay more for attorney fees than the amount to creditors, such a case is perceived as a disguised Chapter 7. Such a scenario will draw an objection to confirmation from the Trustee. The objection will read essentially as follows:

The Trustee objects to a Plan that proposes to pay $4,000 in Administrative fees and only $1,330 to the creditors.

In such a case, add a paragraph to the plan that corrects the imbalance or reduce the attorney fees to the amount being paid to the creditors.

Example paragraph: “The debtors shall pay not less than $4,000.00 to the non-administrative creditors during the life of the Plan”.

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9. SPLIT CLAIMS IN PARAGRAPH 2b FOR PAYMENT OF ADEQUATE PROTECTION AND ALL AVAILABLE FUNDS ON A SINGLE PIECE OF COLLATERAL

In some instances, attorneys feel it necessary to pay adequate protection payments on collateral that is being paid through paragraph 2b and, at the same time, facilitate early payment of attorney fees. The attorneys may also want to provide that any tax refunds or other “extra” funds paid into the plan go to that same collateral in order to expedite payment. Under the current computer configuration, the Trustee is unable to administer a single periodic payment that calls for a fixed permo (per month) payment and all available funds, i.e. “$100 and then all available funds”.

To remedy this dilemma, the Trustee can administer a “split claim” that splits the collateral into two separate claims, one to guarantee adequate protection at a rate agreed upon and one that will allow all other funds to go to that creditor as quickly as possible after paying the allowed attorney fees

Example:

Creditor: United Finance - Collateral: 1997 Honda – Value $10,000 – Post confirmation Interest Rate 9% Paragraph 2b should read: Creditor Collateral Its Value Post confirmation Periodic Interest Rate Payment United Finance 1997 Honda $2,000 9% $200 United Finance 1997 Honda $8,000 9% AAFAAF* (SAME VEHICLE)

* All available funds after attorney fees

It is critical that the Trustee be informed that the split claim is for the “same vehicle” and not two different vehicles with the same creditor. It is also critical that the periodic payment for the fixed permo payment be open ended as in the example above. DO NOT set the number of months.

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10. NEGATIVE EQUITY

If a “910” vehicle has “negative equity” factored into the retail sales agreement (an amount paid by the dealer for the balance owed on a trade-in at purchase of a replacement vehicle), it must be brought into the plan in paragraph 2(b)(2). In re Riach, 2008 WL 474384 (Bankr. D. Or.) The “negative equity” amount must be deducted from the claim and the amount to be paid on the claim appropriately reduced.

The following example illustrates the formula:

Amount financed: $25,000 “Negative equity”: $3,000 PMSI percentage: 88%

Amount of claim on filing date: $21,000

Actual PMSI debt: (PMSI % x Debt at filing) $18,480

Replacement value: $17,500

When negative equity is present, and the actual PMSI debt is more than the current replacement value of the automobile, the amount paid (in the example above, $18,480) should be included in paragraph 2(b)(2) under the column “Collateral Value if Not Paying in Full” with a notation that states: “Amount of claim reduced to 88% for negative equity and the remainder treated as an unsecured claim”.

11. SUPPLEMENTAL FEE APPLICATIONS

Supplemental fee applications will be paid after all paragraph 2(b) “all available funds after attorney fees” are paid in full unless language is included in the plan that states otherwise. If you wish any supplemental fee applications to be paid before any “all available funds after attorney fees” periodic payment is paid in full, the following language must be added to paragraph 2(b)(4) of the plan prior to confirmation or after confirmation by an amended plan or notice pursuant to LBR 2002-1.B.1.b.

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“All attorney fees, including supplemental compensation, shall be paid from all available funds after any fixed per month (permo) payments in ¶ 2(b) are made.”

12. FUTURE EMPLOYMENT

For debtors who are unemployed at the first meeting, but are seeking or foresee the possibility that they will become employed during the life of the plan, the following should be added to the plan:

“Debtor(s) shall provide the Trustee with one (1) month of pay stubs and amended I & J Schedules within 60 days of gaining employment.”

13. FUTURE AUTOMOBILE PURCHASE

If the debtors propose to purchase an automobile within 6 months of confirmation and need to budget the funds to accumulate a down payment, the following paragraph must be added to the plan along with the proposed auto payment on Schedule J.

"Debtor(s) shall pay ($ ) per month, for a maximum of (6) months, into the trust fund of debtor(s) attorney for the future purchase of a necessary automobile. Any purchase must be made from those funds within (6) months from the date the first payment is due under the Plan. If for any reason the purchase is not consummated within that time, the budgeted funds so set aside will be forwarded to the Trustee for distribution under the Plan and the debtor(s) plan payment in paragraph 1(a) will be recalculated and increased in an amount equal to the amount of the proposed automobile payment. The Trustee is authorized to submit an Order Modifying Plan to account for any such adjustment. Debtor(s) attorney will monitor the payments and inform the Trustee immediately should the debtors fail to make any such payment.”

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14. FUTURE CHARITABLE CONTRIBUTIONS IN A PLAN

“Debtor(s) shall provide to the Trustee proof of any charitable contributions made during the life of the Plan. Proof shall be in the form of debtors' cancelled checks, or receipts/statements provided by the recipient and shall be presented to the Trustee no later than eachMarch 1st during the life of the Plan. In the event such proof cannot be provided, in whole or in part, the debtor(s) shall pay to the Trustee for distribution through the Plan, a sum equal to the difference between the charitable contributions listed on Schedule J and those contributions which can be proven.”

15. HIGH HOME MAINTENANCE EXPENSES (repairs and upkeep)

If the Schedule J home maintenance expenses are unusually high, the Trustee may request that the following language be added to the plan:

“Debtor(s) shall provide to the Trustee before discharge, proof of expenditures made for the home maintenance found on Schedule J.That proof shall include supporting documents for the expenditures actually made. In the event such proof cannot be provided, in whole or in part, before any discharge is granted, the debtor(s) shall pay to the Trustee for distribution through the plan, a sum equal to the difference between the maintenance expenditures claimed and those expenditures which can be proven.”

16. DISCOVERED INCREASED INCOME

If unreported increased income received by the debtors during the applicable commitment period is determined by the Trustee to be a necessary addition to the plan base, the following language should be added to the plan by separate paragraph:

“To account for unreported increased income received by the debtor(s) during the period of ____ through ____, the debtor(s) shall pay an additional $_____ to the Trustee for distribution through the plan.”

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17. FAILURE TO MAKE PLAN PAYMENT “DROP DEAD”

On those occasions where it is Ordered that the debtors shall make all scheduled plan payments and failure to do so will result in dismissal upon the filing of a “Trustee’s Statement Of Failure To Comply”, the following language should be added to the OCP, Amended Plan or Stipulated Order:

Add as paragraph__: “Should debtor(s) fail to make any scheduled plan payments due under this plan beginning __________ to ___________ this case shall be dismissed upon the filing of a Statement of Failure to Comply by the Chapter 13 Trustee reciting that the required payment(s) were not made. During this period, the debtor(s) personally are to pay a plan installment to the Chapter 13 Trustee for any month where any employer required to pay, fails to do so.”

18. ALTERNATIVE TO THE TRUSTEE’S PURSUIT OF A PREFERENTIAL or FRAUDULENT TRANSFER

“The Trustee will not pursue the preferential or fraudulent (choose appropriate) transfer to ___________ if debtor(s) pay an additional $ _________ to the Trustee for distribution through the Plan to unsecured creditors over and above the distribution determined at confirmation. This amount shall be in addition to any paragraph 2(g) distributions projected for the general unsecured creditors pursuant to the confirmed plan and shall be in addition to any tax refunds due.Additionally, the transferee must sign and return a tolling agreement extending the statute of limitations period for recovery of the preference. As a condition to confirmation, the debtor will assist the Trustee in obtaining the tolling agreement.”

19. CO-SIGNED CLAIMS

If you intend to protect a co debtor pursuant to Section 1301, youmust add a separate paragraph to the plan as follows:

“To protect a co-debtor, the Trustee shall pay the allowed unsecured claim (state amount of claim) of (name of creditor) in full with (%) in the amount of $_____ per month concurrently with any secured creditors. In the event there is a “best interest number” in paragraph 2(g), the amount of the co-signed claim shall be included in

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the calculation of the dividend payable under that paragraph and that distribution shall be paid to creditors under that paragraph as if the co-debtor claim was not co-signed.”

If you elect to use this section, prior to the first meeting of creditors, send the Trustee evidence that the co debtor is in fact, liable on the debt with the debtor pursuant to §1301(a).

20. §1305 CLAIMS IN PLAN

If the claim is to be included in the original plan, add the following:

“Trustee shall pay any allowed claim through the plan filed pursuant to §1305 for (name of creditior) in the same manner as if the claim had arisen before the filing of the petition.”

In the event the debtors desire to include a §1305 claim in any post confirmation modified plan or when added to an original OCP where no prior notice been given to creditors or parties in interest, add the following to the above:

“This claim is to be paid after all paragraph 2 creditors are paid in full pursuant to the confirmed plan. This claim shall not diminish any paragraph 2(g) distributions projected for the general unsecured creditors pursuant to the confirmed plan.”

Note: The IRS has discontinued allowing 1305 claims and the ODR has never agreed to one. 1305 is now exclusively for other post- petition claims that meet the definitions in that section. The claim must be for a consumer debt that is for property or services necessary for the debtors’ performance under the plan.

21. AGREEMENT TO RETAIN OBJECTIONABLE INCOME AND/OR BUDGET ENTRIES IN EXCHANGE FOR 100% PLAN OR ADDITIONAL AMOUNT TO UNSECURED

Under certain circumstances, the Trustee may waive objections to otherwise excessive and objectionable income and/or budget items if the debtors are willing to propose a Paragraph 2(f)(2) “minimum” 100% plan. In that eventuality, the trustee will require that the debtors agree to the following non modifiable paragraph to guarantee that the debtors will not

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later renege and file a modified plan which reduces the 100% minimum. If, after this language is added, the debtors propose a modified plan that is less than 100%, the Trustee will enforce this provision to the extent that the unsecured creditors be made whole and receive at least as much as they would have received had the objectionable item(s) been removed in the original plan. (Fill in the parenthesis)

“In exchange for the waiving of the Trustee’s objection to Confirmation due to (i.e., excessive budget items, retained collateral not necessary for reorganization, _________) the debtor(s) agree that the provision of ¶ 2(f)(2), “100%” is non- modifiable”

If the Trustee objects to a particular expense deemed not necessary for reorganization and the debtor(s) wish to retain the expense, if the Trustee is in agreement, the following additional paragraph may be added to insure the unsecured creditors are made whole.

“In exchange for the waiving of the Trustee’s objection to confirmation regarding the (insert description of the expense), the debtor(s) agree to pay and additional (state the agreed amount) to the non priority unsecured creditors over and above the amount determined at confirmation. The amount determined at confirmation is (state amount determined for the unsecured at confirmation). If that amount is later changed by an amended plan, the (state the agreed amount) will still be required over and above any amount determined by any amended plan.”

22. IMPROPER PERFECTION

Whenever there is a § 547 perfection issue (usually a car), the following language should be added as a separate paragraph:

“Pursuant to §547, the Trustee may proceed to avoid the alleged improperly perfected lien of (lien holder). Payments scheduled in paragraph 4 shall be paid to the trust fund of debtors’ attorney and held in trust until such time as the 547 action is determined. Payments scheduled in paragraph 2(b) will be held by the Trustee until such time as the 547 action is determined.

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If the Trustee is successful, the debtor(s) will amend the plan to increase the best interest of creditors test accordingly and to provide payments to the Trustee in lieu of (lien holder). If the Trustee is not successful, any payments held in the debtor attorney trust fund or being held by the Trustee, will immediately be forwarded to the lien holder.”

23. ONGOING MORTGAGE PAYMENTS THROUGH PLAN

On those occasions where the ongoing mortgage payment is proposed to be paid through the plan, add the mortgage payment to the paragraph 1a plan payment, remove any reference of the payment from paragraph 4, make the reference in paragraph 2b1 shown below and add an additional paragraph to the plan using the paragraph below as a guide: (Fill in the parenthesis)

Example:

2b1: Creditor Collateral Value Interest Rate Equal payments ( Wells Fargo ) ( Residence) (leave blank) ( na) (See paragraph 12)

Additional paragraph example: (Fill in the parenthesis)

Paragraph 12: “Provided that an allowed claim has been filed, the trustee shall disburse each month from the regular plan payment as adequate protection, the debtor(s) current ongoing mortgage payment in the amount of ($1.500 ) for loan or account (# 9325440 ) to the address listed on the filed proof of claim. Payment through the trustee shall begin with the regular (January 2009 ) disbursement by the trustee, which will be deemed to pay the debtor(s) ( February, 2009)mortgage payment. The debtor is responsible for all payments prior to (February, 2009). In the event the ongoing mortgage payment increases, the debtor(s) shall be responsible to insure that any difference is paid directly to the mortgagee until such time an amended plan may be filed and approved.”

Note: The debtor is responsible to alert the trustee to any changes to this treatment, including any request to send the payments to an address different than the one found on the proof of claim. Be sure that a claim with proper security documents is filed either by the creditor or the debtor on behalf of the creditor. The Trustee cannot pay unless and until such a claim is filed.

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24. PAYMENT OF A PORTION OF A LONG TERM AUTO OBLIGATION AFTER DISCHARGE

On occasion, it may be necessary to pay part of a 910 long term auto contract (or co signed obligation) through the plan and the remainder after discharge. Under those circumstances, the auto should be put in paragraph 2b2 under “Estimated Total Debt if Paying Debt in Full” with the following words added as a separate paragraph:

“The claim of ___________ is not being modified. It will be paid per §2(b)(2) of the plan during the life of the plan in the monthly amount of $_____ commencing with the payment disbursed by the Trustee at the end of ______. The debtor(s) will make the payments directly to ________ up through the payment due ________. Upon discharge, the debtor(s) will re-commence making the remaining contractual payments directly to _______.”

25. PENDING LOAN MODIFICATION

Pre Confirmation: In the event a loan modification is not finalized but remains pending at confirmation and there are arrears that the modification would absorb, the following language should be added to the plan:

“The debtor has applied for a loan modification with __________to cure the loan arrearage. In the event debtor(s) are offered an ongoing loan modification, they shall submit the loan modification agreement

and any supporting documents to obtain Trustee’s approval or Court Order prior to the loan modification going into effect. If the loan

modification is not approved within six months of confirmation of the Chapter 13 plan, the debtor will amend the plan to provide for cure of the loan arrearage owing to______________ or will surrender the property.

Post Confirmation:

“The debtor(s) have applied for a loan modification with ________. Any payment on any arrears are being removed from the plan to be absorbed by the modification.”

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The actual arrears should remain in paragraph 2b1 with the following language under the payment column:

“to be satisfied by loan modification.” In the event debtor(s) are offered an ongoing loan modification, they shall submit the loan modification agreement and any supporting documents to obtain Trustee’s approval prior to the loan modification going into effect. If the loan modification is approved by both the lender and the Trustee, the debtor shall file a modified plan within 60 days of approval to provide for the new terms of the loan. If the modification is not approved, the debtor will file a modified plan within 60 days of denial, to either surrender the collateral or provide for post petition payments on the arrears.”

26. RECIPROCAL CLAIM CASES

There may be occasion when two debtors: 1) are joint and severally liable on the same claim (usually priority taxes); 2) have filed separate Chapter 13 cases or the cases have been severed; and 3) where the debtors each agree to pay one-half or some portion of the claim through their respective cases. The following language is necessary in each Plan. (IRS used as example)

"This case is related to and shall be the companion case of (insert other case name and number). The priority tax claim of the Internal Revenue Service is a priority tax claim for both cases. One-half of the allowed priority tax claim shall be paid through the Plan in this case and one-half through the companion case. The debtor(s) in this case is not entitled to a discharge until the entire amount of the allowed priority claim of the IRS is paid in full. If the companion case is dismissed, converted or a hardship discharge is granted, the debtor(s) in this case shall immediately file an amended plan to provide for payment in full of the remaining allowed priority tax."

27. SECTION 1322(B)(5) LONG TERM STUDENT LOANS THAT ARE NONDISCHARGEABLE AND IN DEFAULT

BEFORE YOU CAN USE THIS PARAGRAPH, YOU MUST BE PREPARED TO PROVE THAT PAYING THIS

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UNSECUED CLAIM OVER OTHER UNSECURED CLAIMS IS “FAIR” DISCRIMINATION PURSUANT TO THE 4 PART TEST FOUND IN IN RE WOLFF, 22 BR 510 (9th Cir. BAP 1982); and IN RE SPERMA, 173 BR 654 (9th Cir BAP 1994)

“The default of the long term student loan to (name of creditor) in the amount of (default amount) shall be cured and paid by the Trustee in full with ( ___%) interest as if a priority claim.”

REMEMBER: Four elements are required. 1) The loan must be in default, 2) the regular monthly payments, if made, would extend beyond the life of the Chapter 13 plan, 3) the loan must be non dischargeable and, 4) the regular ongoing maintenance payment must be included in the budget (Schedule J) as a reasonable and necessary ongoing expenses. If all four elements are not present, the claim cannot be paid in this manner. If you elect to use this section, prior to the first meeting of creditors, send the Trustee evidence that the loan is non dischargeable, and that the last payment on the loan is due after the date on which the final payment under the Plan.

28. SEPARATE CLASSIFICATION OF STUDENT LOANS (OR OTHER CLAIMS) AFTER THIRTY SIXTH PAYMENT

(Available only for below median debtors)

“Class I - student loans of (name of creditor) Class II - Allunsecured claims. All funds available for unsecured claims during the first 36 payments shall be prorated among Class II claims. Subject to below, all funds available for unsecured non-priority claims after the 36th payment shall be paid to satisfy Class I claims. If any paragraph 2(g) “best interest of creditors” number has not been satisfied during the first 36 months, that number shall be satisfied before any funds are distributed to Class I after the 36th month. . Class I will receive approximately ____%. Class II will receive approximately ____%.”

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29. POST DISMISSAL OR CONVERSION PAYMENTS TO A CREDITOR

If the debtors agree with a creditor that funds that would otherwise be disbursed to the debtors upon dismissal or conversion may nonetheless be disbursed to the creditor per the confirmed plan upon dismissal or conversion, the debtors’ attorney will be responsible for the forwarding of those funds to the creditor and the following language should be added to the plan. (Fill in blanks)

“In the event this case is dismissed or converted to a Chapter 7 bankruptcy, the Trustee shall pay to the debtor(s) attorney all funds in the Trustee’s possession pursuant paragraph 14 of the Order Confirming Plan. From the funds returned to the debtors’ attorney by the Trustee and as adequate protection to ____________, the debtor(s)attorney shall forward to ____________ an amount equal to the amount that would have been paid to _____________ as though the Trustee made a disbursement to ____________ on the date of dismissal or conversion.”

30. RETENTION OF TAX REFUNDS

On occasion, debtors need to retain all or a portion of a particular year’s tax refund for a reasonable and necessary expense not included on Schedule J. To retain all or part of a particular tax refund, the request must undergo a two-step process:

First, the Trustee must be convinced that the expense(s) are in fact justified. Second, if the Trustee agrees, and the resulting reduction of funds paid to the trustee makes a difference to the unsecured creditors, “notice” and an opportunity to object must be given to the creditors, either in the original plan or by a modification of the original plan using LBF 1355.10.

Either method of Notice will require the following paragraph be added to the plan:

“Debtor(s) shall be permitted to retain up to $________ fromtax year(s)______refund(s) over and above any Earned Income Credit for the following expenses: _______________. This retained amount shall not be included in the base amount of the plan.

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NOTICE: If you wish to exempt EIC, you must do that separately either by a separate paragraph or on Schedule C.

Monetary Limitations:

Life of the plan: Debtors whose actual disposable income would qualify as below median may include the necessary paragraph in their plans allowing them to retain up to $2400 of their tax refund over and above any Earned Income Credit each year in the plan provided they have good reason for retaining it, i.e., extremely slim budget or projected yearly expense not included on Schedule J. You must be prepared to discuss the reasons for this retention with the Trustee at the first meeting of creditors. The Trustee will not require them to provide proof that they spent the money for the purpose indicated. (This provision is subject to modification by the Trustee in the event the income of the debtors increases during the life of the plan)

One time retention: Both below and above median debtors may provide for one-time retention of tax refunds up to $3,000 provided they have good reason for retaining it by including the necessary paragraph in the plan to that effect. The reason for the retention should be in the paragraph, but proof will not be required. If more than that is requested, the debtor(s) will have to provide proof to the Trustee that the money was spent for that purpose. The $3000 figure is over and above any EIC for that particular year.For an amount over $3,000, the following must be added to the necessary paragraph:

Debtor(s) will provide proof for the expenses in the form of supporting documents. Failure to provide necessary proof will cause discharge to be delayed until such time proof is provided or a like amount is paid into the plan in lieu of proof.

Note: The retention will be allowed if the expenses have already been incurred and you can prove the expenses at the time you ask for the retention. If the expenses have not yet been incurred, the Trustee will require that they be added to Schedule J with an adjustment to the plan accordingly.

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4A–i

Chapter 4A

ChAPTEr 13: ThE CrEDiTOr’S PErSPECTiVE

stephen t. tWeet

Albert & Tweet LLPSalem, Oregon

Table of Contents

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–1

II. Automatic Stay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–1A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–1B. Relief from the Automatic Stay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–2

III. Secured Creditor Plan Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–4A. Cram-Down (Plan Provision ¶ 2(b)(1)) . . . . . . . . . . . . . . . . . . . . . . . . 4A–4B. “910” Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–4C. Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–4D. Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–5E. Home Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–5F. Payment “Outside the Plan” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–6G. Contested Confirmation Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–6H. Other Important Stuff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–7

AppendixesA. LBF 720.80, Chapter 7/13 Motion for Relief from Stay and Codebtor Stay,

and LBF 720.50, Relief from Automatic and Codebtor Stay Procedures . . . . . 4A–11B. LBF 720, Notice of Motion for Relief . . . . . . . . . . . . . . . . . . . . . . . . . 4A–17C. LBF 115, Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–19D. LBF 720.90, Order re Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–21E. LBF 1317.3, Motion to Value Property Pursuant to 11 U.S.C. § 506 and

Avoid Wholly Unsecured Lien, and LBF 717.15, Lien Avoidance (§ 522(f)) Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–25

F. LBF 1317, Notice of Motion to Value Property Pursuant to 11 U.S.C. §506 and Avoid Wholly Unsecured Lien in a Chapter 134 Case . . . . . . . . . . . . 4A–27

G. LBF 1317.5, Order Valuing Property Pursuant to 11 U.S.C. § 506 and Avoiding Wholly Unsecured Lien in a Chapter 13 Case . . . . . . . . . . . . . . . . . . . 4A–29

H. Sample Form of Stipulated Order Avoiding Junior Lien of Secured Creditor. . 4A–31I. Form B 10, Proof of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A–33J. Form B 10A, Mortgage Proof of Claim Attachment . . . . . . . . . . . . . . . . 4A–37K. Form B 10S2, Notice of Postpetition Mortgage Fees, Expenses, and Charges . . 4A–39

4A–ii

Chapter 4A—Chapter 13: The Creditor’s Perspective

4A–1


i. inTrODuCTiOn

In these materials I address a few of the most common issues faced by attorneys representing creditors in Chapter 13 cases. I have borrowed heavily and shamelessly (but with permission) from Ann Chapman, Chris Coyle, and Wayne Godare’s excellent article, “Chapter 13 for Individuals and Small Businesses—To Retain Assets and Repay Creditors—The Flexible Bankruptcy,” presented at Fundamentals of Bank-ruptcy, Oregon State Bar CLE Seminars, August 12, 2011. Many thanks. I also commend the Oregon State Bar’s Bankruptcy publication as a very valuable resource for beginners and veterans alike.

ii. AuTOMATiC STAy

A. Overview

The automatic stay, 11 U.S.C. § 362, is one of the most fundamen-tal debtor protections. The stay is effective immediately upon the filing of any bankruptcy petition. The stay acts as an injunction against most acts by most creditors to collect a debt. Chapter 13 (and Chapter 12) further provides a codebtor stay. 11 U.S.C. § 1301(a). The codebtor stay enjoins attempts to collect a “consumer debt,” i.e., a “debt incurred by an individual primarily for a personal, family or household purpose” from a nonbankrupt codebtor (i.e., guarantor or comaker).

1. What is Stayed. Section 362 provides a laundry list of mat-ters that are stayed by the automatic stay. Those include any attempt to collect a debt judicially or nonjudicially (including demands and dun-ning letters) and any attempt to foreclose against, seize, garnish, or oth-erwise obtain possession of property of the debtor or of the bankruptcy estate.

2. Violations of the Stay. The majority of courts, including the courts of the Ninth Circuit, hold that any violation of the automatic stay is not merely voidable but is void “ab initio.” “Willful” violations of the stay may result in the assessment of damages against the offending creditor, including punitive damages, costs, and attorney fees. § 362(k).

3. What is not Stayed

a. Section 362(b) Exceptions. In many cases, it’s more help-ful to examine what is not stayed than what is. If you represent a credi-tor and a stay exception is not found under § 362, then it is safe to as-sume that the stay is applicable. The laundry list of non-stayed matters is enumerated generally in § 362(b) and include, most notably, criminal proceedings and divorce-related matters.

b. Section 362(b)(22)—Eviction. 11 U.S.C. § 362(b)(22) pro-vides that the stay does not apply to eviction actions from residential leaseholds when the lessor obtained a pre-petition judgment unless the debtor (i) files with the petition and serves on the lessor a certification that the debtor would be permitted under state law to cure the default; (ii) deposits with the court any rent that comes due within the 30 days;

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and (iii) files and serves on the lessor a certification that the debtor cured the default within 30 days. If the lessor files an objection to the certifica-tion, the court must hold a hearing within 10 days to determine whether the facts in the debtor’s certification are true. 11 U.S.C. § 362(l)(3).

c. Section 362(c)(3) and (4)—Too Many Cases. Pursuant to 11 U.S.C. § 362(c)(3), the automatic stay “with respect to the debtor” terminates on the 30th day after the filing of a bankruptcy petition when a prior bankruptcy case was pending and dismissed within the prior year unless the case was a Chapter 7 case and was dismissed under the Bankruptcy Code’s abuse test. See 11 U.S.C. § 707(b). Also, the stay does not even go into effect after the filing of a petition when two or more cases were pending and dismissed within the prior year (except again when the prior case was a Chapter 7 and dismissed under the abuse test). § 362(c)(4). Under both of these provisions, the Code will allow the debtor to file a motion to continue or impose a stay.

B. relief from the Automatic Stay

1. Grounds for relief. The grounds for relief from the au-tomatic stay are set forth in 11 U.S.C. § 362(d). They are: (a) “cause,” including the lack of adequate protection; (b) as to property, if there is no equity and the property is not necessary to an effective reorganization. In addition, we now have § 362(d)(4). Section 362(d)(4) was enacted by BAPCPA. It provides for in rem relief as to property of the debtor if the court finds that the debtor filed his or her bankruptcy petition as a part of a scheme to “delay, hinder and defraud creditors” that involves either (a) transfer of all or part ownership of interest in real property with the consent of the secured creditor or court approval, or (b) multiple bank-ruptcy filings affecting the property.

2. The Forms. The relief from stay motion process is very form-driven. The Chapter 13 form for motion for relief from stay and codebtor stay is LBF 720.80. See Appendix A to these materials (includ-ing instructions). The required Notice of Motion is LBF 720. Appendix B. The debtor’s response is filled in and submitted on the RESPONSE portions of the motion form submitted by the moving party. The current filing fee for a motion for relief from stay is $176. All bankruptcy filing fees are set forth in LBF 115. The most recent fee list is attached to these materials as Appendix C.

3. Critical information. As the form motion makes clear, the critical required information a secured creditor must gather before filing a motion for relief includes: a. Description of collateral (e.g., model, year, and VIN for motor vehicles; address—and preferably legal description—for real property; b. Debt—principal, interest, costs, fees, arrearage; c. Description of default; and d. Value of collateral.

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4. Common Cases. Almost all motions for relief from the automatic stay in Chapter 13 cases are filed by secured creditors seek-ing permission to foreclose a deed of trust or other security instru-ment against real property or repossess/foreclose a security agreement against a motor vehicle. If a nondebtor is either a co-owner or co-obligor with the debtor, codebtor relief should also be sought (using the same form—LBF 720.80).

a. Pre-Confirmation relief from Stay. Pre-confirmation re-lief from stay is most often sought by a secured creditor under the fol-lowing circumstances. i. The plan provides for surrender of the collateral (see plan ¶ 2.(b)(5)). ii. When the secured creditor is not satisfied with the filed plan. Often, a motion for relief from stay is then filed along with a com-panion objection to confirmation. Reasons for dissatisfaction include: (A) A disagreement concerning cram down value; (B) A misstatement about the arrearage to cure; (C) A belief by the secured creditor that the debtor cannot af-ford the payments proposed and/or is just attempting to delay the in-evitable day of reckoning; (D) Omitting the secured creditor entirely from treatment un-der the plan.

b. Post-Confirmation relief from Stay. Post-confirmation relief from stay is most often sought under the following circumstances: (A) Debtor fails to make a payment or payments required by the confirmed plan; (B) Debtor amends the plan to either surrender the collateral or provide for modified treatment of the secured creditor’s claim, e.g., usually by delaying or reducing payment.

5. The Order for relief. If no objection is filed within 17 days following the filing date of the motion, the creditor may submit an ex parte order for relief. See form order, Appendix D. Also, the stay will terminate by operation of law 30 days after the motion is filed (if no response is filed), even if no order is submitted. (See Section IV of Notice, LBF 720, Appendix B, and 11 U.S.C. § 362(e)(1).) Under Bankruptcy Rule 4001(a), even if an order is entered for re-lief from stay, the stay remains in effect for an additional 14 days unless waived for cause. BR 4001(a)(3). “Cause” in our district (in the Chap-ter 13 context) essentially means that the debtor consents to relief from stay by agreeing to surrender the collateral (see paragraph 2(b)(5) of the plan).

6. hearing. If the debtor does file a response, the matter will be set for hearing. The initial hearing is a preliminary hearing by telephone. No evidence is taken at the preliminary hearing, but many disputes are either resolved at the hearing or shortly thereafter. If not resolved, the matter is set for a final hearing where evidence may be introduced. The form order for relief is designed to accommodate stipu-

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lations of the parties as well as final decisions by the court. Frequently, nonpayment issues are resolved by a stipulation that allows the debtor to cure the nonpayment. Such stipulations also frequently provide that if another payment is missed and not cured after written notice to the debtor, the creditor can obtain an order for relief without further motion; this is frequently referred to as “drop dead” or “last chance” stipulation.

iii. SECurED CrEDiTOr PLAn iSSuES

A. Cram-Down (Plan Provision ¶ 2(b)(1))

In Chapter 13, collateral valuation is critical. In paragraph 2(b) of the form plan, the debtor will propose the value of the secured claim (usually the collateral value) and the amount of monthly payments. This is where the debtor proposes a “cram-down” of the secured creditor. If the creditor can show the collateral is really worth $1,000 more, the secured creditor is entitled to another $1,000. This dynamic makes col-lateral valuation issues one of the most contentious Chapter 13 issues. 11 U.S.C. § 506(a) provides that the value of personal property securing an allowed claim “shall be determined based on the replace-ment value of such property as of the date of the filing of the petition without deduction for costs of sale or marketing.” 11 U.S.C. § 506(a)(2). Section 506(a)(2) now specifies that the replacement value of such prop-erty acquired for personal, family, or household purposes is the price that a retail merchant would charge for property of like kind, age, and condition at the time value is determined.

B. “910” Claims

Under Section 1325(a), a debtor cannot “cram down” the value of a motor vehicle if the debtor purchased the motor vehicle within 910 days of the petition date and the creditor has a purchase money security interest in the motor vehicle or if the debtor incurred credit and used it to purchase other personal property within one year of the petition date. However, paragraph 2(b)(2) of the plan provides that the court will ap-prove a valuation proposed by debtor if the creditor fails to file a written objection to the plan (failure to object is deemed acceptance). A debtor can also surrender a motor vehicle purchased within 910 days in full satisfaction of the debt. In re Pool, 351 B.R. 747 (Bankr. D. Or. 2006). If the vehicle is a 910 vehicle, the secured creditor is entitled to payment of its entire debt over the life of the plan (but see below with regard to the interest rate).

C. interest rate

In paragraph 2(b) of the form plan, the debtor will also propose the interest rate for secured claims. Usually, with the amount at stake in a typical Chapter 13 case, it is not feasible to litigate over the rate of interest. Nine percent is the legal rate of interest in Oregon unless other-wise provided by contract. ORS 82.010. However, there is nothing magi-cal about the 9% rate in the Chapter 13 plan process. The Supreme Court

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has mandated a “formula approach” that provides a base rate with risk factors added as follows:

[T]he approach begins by looking to the national prime rate, reported daily in the press, which reflects the finan-cial market’s estimate of the amount a commercial bank should charge a creditworthy commercial borrower to compensate for the opportunity costs of the loan, the risk of inflation, and the relatively slight risk of default. Because bankrupt debtors typically pose a greater risk of nonpay-ment than solvent commercial borrowers, the approach then requires a bankruptcy court to adjust the prime rate accordingly. The appropriate size of that risk adjustment depends, of course, on such factors as the circumstances of the estate, the nature of the security, and the duration and feasibility of the reorganization plan. The court must therefore hold a hearing at which the debtor and any creditors may present evidence about the appropriate risk adjustment. Some of this evidence will be included in the debtor’s bankruptcy filings, however, so the debtor and creditors may not incur significant additional expense. Moreover, starting from a concededly low estimate and adjusting upward places the evidentiary burden squarely on the creditors, who are likely to have readier access to any information absent from the debtor’s filing (such as evidence about the “liquidity of the collateral market.” Fi-nally, many of the factors relevant to the adjustment fall squarely within the bankruptcy court’s area of expertise.

Till v. SCS Credit Corp., 541 U.S. 465, 479 80 (2004). It will be a rare case where the creditor will be willing to spend litigation dollars on the interest rate issue in Chapter 13, especially when you consider that most Chapter 13 secured claims are fairly small. Creditors may object to the rate, however, and then negotiate a higher rate that is more acceptable. Importantly, the interest rate on a 910 claim can be modified even if the collateral value cannot be crammed down. In re Henry, 353 B.R. 261 (Or. 2006).

D. Fees and Costs

Post-petition fees and attorney fees and costs may be added to a fully secured claim. They may not be added to a secured claim that is undersecured. See section E below for procedure relating to home mortgages.

E. home Mortgages

Pursuant to Section 1322(b)(2), the rights of a holder of a secured claim secured only by a security interest in real property that is the debt-or’s principal residence cannot be modified. Thus, the debtor cannot change the monthly payment and cannot lower the interest rate on the

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debtor’s home mortgage. In addition, the debtor must make all post-petition mortgage payments because the debtor cannot confirm a plan that creates a default. “[A] plan that proposes withholding of monthly installments due on the obligation for any period of time modifies the rights of the expected creditors in violation of Section 1322(b)(2).” In re Proudfoot, 144 B.R. 876, 878 (9th Cir. B.A.P. 1992). However, the language of Section 1322(b) does not apply to a mortgage that is due by its terms (not accelerated) or that comes due during the life of the plan. In addition, the residential mortgage holder cannot be crammed down to the property value. Nobelman v. American Savings Bank, 508 U.S. 324 (1993). However, if a residential mortgage creditor is completely un-secured, that mortgage creditor’s lien can be “stripped.” In re Zimmer, 313 F.3d 1220 (9th Cir. 2002). For example, if a property is worth $100,000 and there is a $100,000 senior mortgage on the property, a junior mort-gage can be “stripped” because there is no equity for the lien to attach. This issue naturally turns on the valuation of the property, and litigation on this issue usually involves dueling appraisers opining on property value. If there is even one dollar of equity in the property to which the junior mortgage can attach, the lien cannot be stripped. The lien stripping process is now governed by motion in the Dis-trict of Oregon. See LBF 1317.3, attached as Appendix E, and LBF 1317, Notice, Appendix F (although some litigants still prefer the comfort of an adversary proceeding judgment to assist uneasy title companies). One bit of messiness to this process is that even if the lien is stripped, it will be reinstated if the Chapter 13 case is later dismissed or converted to a case under Chapter 7. Creditors may seek further protec-tions as a result. For instance, it may be wise to insert a provision in a lien-stripping order that the debtor will not attempt to sell or refinance the residence while the case is still pending or that the debtor will not record the judgment in state court until the Chapter 13 plan has been completed and discharged. Copies of the court’s form order allowing lien stripping (LBF 1317.5) and one used by Albert & Tweet LLP are at-tached as Appendixes G and H.

F. Payment “Outside the Plan”

Paragraph 4 of the plan is utilized by the debtor when the credi-tor’s security interest is fully secured and the debtor simply wants to maintain regular monthly payments to that secured creditor. If the debt-or intends to pay the creditor in full but there is a pre-petition arrear-age, the debtor will usually schedule the pre-petition arrearage to be paid under paragraph 2(b)(1) through the plan and maintain the regular monthly payments directly outside the plan under paragraph 4. Pay-ment outside the plan means that the debtor pays that monthly obliga-tion directly to the secured creditor and not through the trustee’s office.

G. Contested Confirmation hearings

If you are unable to resolve your confirmation objection, there will be a hearing. In almost all instances, the initial confirmation hear-ing will not be the hearing at which evidence is presented. Typically, the

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initial hearing involves numerous cases and plans, and the court’s job is to shuffle through the ones that are contested, confirm the uncontested ones, and try to get a feel for the issues in the ones that are contested and then set those for further hearing. Here are a few dos and don’ts. First, remember that the Federal Rules of Civil Procedure, Bank-ruptcy Rules, and Local Bankruptcy Rules are all applicable. Be sure that you’re aware of the rules that are applicable in preparation for your hearing. Second, only fight about what you can’t agree to. Talk to your opponent well in advance and determine the true nature of your dis-agreement. For instance, if the real issue is collateral value, see if you can stipulate to the amount of debt and validity of your security documents. Third, sometimes witnesses are allowed to testify by telephone. It is important that you contact the court and get approval in advance of having a witness testify by phone. Obtaining the consent of your op-ponent to testify by phone is not enough. Fourth, yes, the rules of evidence apply. However, again, many issues relating to authentication and admissibility may be stipulated to in advance.

h. Other important Stuff

1. Proofs of Claim. Every creditor, secured or not, must file a proof of claim in order to receive any distribution from the trustee. So file as soon as you have the information to do so. A copy of the most recently approved proof of claim form is at-tached as Appendix I. The form is generally self-explanatory, and de-tailed instructions are part of the form. The claims bar date is included in the Chapter 13 first meeting notice and is generally within 90 days following the meeting of credi-tors. If you are a secured creditor, be sure you say so on the form and submit at least a generic valuation of the collateral and your client’s pre-petition arrearage. Of course, if you’re going to object to the debtor’s valuation, you want to be sure that the valuation set forth in your proof of claim is consonant with your opposition to the debtor’s cram-down value. If not too voluminous, you should attach the documents that reference the debt, security, and perfection of the security interest (e.g., note, security agreement, deed of trust with recording information, cer-tificate of title for vehicle). If your client is a secured creditor with a mortgage obligation, Bankruptcy Rule 3002.1 requires a notice of mort-gage payment change every time the mortgage payment goes up or down. Form B 10A, Appendix J. It is to be attached as a supplement to the proof of claim at least 21 days before the new payment amount is due. Also, if you are a secured creditor that claims a security interest in the debtor’s principal residence, you must file a notice of post-petition mortgage fees, expenses, and charges if you are to recover those fees, ex-penses, or charges against the debtor and against the debtor’s principal

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residence. That form, B 10S2, is to also be filed as a supplement to the proof of claim. A copy is attached as Appendix K. Next, it is also very important when attaching any documents to the proof of claim to redact privacy-sensitive information such as Social Security numbers, account numbers, and names of minor children. If a mistake is made, there is a process that can be utilized to seal the old on-line document that contains the private information and replace it with a properly redacted document. Proofs of claim may be amended. See LBR 3001-1(a)(3)(A) for lo-cal procedures.

2. Cash Collateral. 11 U.S.C. § 363(c)(2) states: “The trustee may not use, sell, or lease cash collateral . . . unless (A) each entity that has an interest in such cash collateral consents; or (B) the court after notice and hearing authorizes such use, sale or lease in accordance with the provisions of this section.” Cash collateral is not normally thought of as an issue in Chapter 13 cases. However, if the debtor is a sole proprietorship with a busi-ness and a line of credit and the LOC lender has a security interest in accounts receivable of the debtor’s sole proprietorship, then cash col-lateral is an issue. If you are representing a creditor in that position, remember § 363(c)(2). The debtor may not use (“spend”) the collected accounts receivable and other proceeds of a secured creditor’s collateral without either the secured creditor’s consent or a court order approv-ing. The secured creditor is entitled to not have its secured position sub-stantially worsened by debtor’s use of its cash collateral. Normally, in order to obtain a court order allowing the use of the cash collateral, the debtor will utilize several tactics. First, the debtor may try to establish that there is sufficient equity in the secured creditor’s collateral to secure its claim even if the cash is spent. Second, the court may authorize use of some cash collateral through payments to the secured creditor, i.e., adequate protection. Third, the debtor may provide the secured creditor with additional collateral (usually in the form of a security interest in post-petition accounts receivable).

3. Dischargeability Objections. In a Chapter 13 case, a cred-itor may consider objecting to the discharge of that creditor’s debt if the debt falls into one of the following categories. a. A debt for money, property, services, or an extension or refinancing of credit to the extent obtained by fraud (other than a statement respecting the debtor’s or an insider’s financial condition). § 523(a)(2)(A); § 1328(a)(2). b. Use of an intentionally false written statement to obtain money, property, or services. § 523(a)(2)(B); § 1328(a)(2). c. For fraud or defalcation while acting in a fiduciary capac-ity, embezzlement, or larceny, 11 U.S.C. § 523(a)(4) and § 1328(a)(2). d. It is important to note that while Chapter 13 incorporates most of the nondischargeability exceptions set forth in § 523, it does not except from discharge § 523(a)(6) claims arising from “willful and mali-

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cious injury by the debtor to another entity or the property of another entity.” In other words, those types of obligations are dischargeable in a Chapter 13 but may not be discharged in a Chapter 7. Also, § 1328(a)(2) incorporates other discharge exceptions such as domestic support obligations (§ 523(a)(5)) and failure to list or name a creditor (§ 523(a)(3)). However, those obligations do not require the filing of an adversary proceeding within the 60-day time frame. Nonetheless, it may be stra-tegically wise to bring such an adversary proceeding, especially as to a debt that may or may not be a “domestic support obligation.” Domestic support issues are a topic for another seminar. Objections to the discharge of § 523(a)(2)(A), (B), and (a)(4) claims must be filed within 60 days following the initial date set for the first meeting of creditors. The discharge date is set forth on the meeting of creditors notice. Essentially what this means is that an adversary pro-ceeding under BR 7001 must be filed on or before the discharge date. Failure to file the adversary proceeding in a timely fashion will result in a discharge of the obligation. It is not uncommon, however, for either stipulated extensions or motions for extension without stipulation to be granted by the court. Such a motion or stipulation, however, must be submitted to the court prior to the discharge date to be considered.

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APPEnDiX A—LBF 720.80, ChAPTEr 7/13 MOTiOn FOr rELiEF FrOM STAy AnD CODEBTOr STAy, AnD LBF 720.50, rELiEF FrOM

AuTOMATiC AnD CODEBTOr STAy PrOCEDurES

720.80 (12/1/11) Page 1 of 4


In re ) Case No.__________________)) (CHECK ALL APPLICABLE BOXES)) Ch. 7/13 Motion for Relief from ) DEBTOR Chapter 13 CODEBTOR Stay) Filed by Creditor:) _____________________________________) Response to Stay Motion filed by Respondent:

Debtor(s) ) _____________________________________

1. Debt, Default, Other Encumbrances, Description and Value of Collateral (To be completed by creditor)

a. Description of collateral (car model, year, VIN, property address):

b. Amount of debt: $______________ consisting of principal: $______________; interest: $______________; other:

c. Description, amount and priority of other encumbrances on collateral. If not known, include applicable information fromdebtor’s schedules if available on PACER:

Total debt secured by collateral (total 1.b. + 1.c.): $______________.

d. Value of collateral: $______________.Equity in collateral: $______________, after deducting $______________ liquidation costs.

e. Current monthly payment: $______________.

f. If Chapter 13:

(1) $______________ postpetition default consisting of (e.g., $____ payments, $____ late charges, $____ fees):

(2) $______________ prepetition default consisting of amounts specified in proof of claim, or, consisting of:

g. If Chapter 7, total amount of default $______________.

RESPONSE (Identify specific items disputed and specify what you contend are the pertinent facts including why there is apostpetition default, if applicable) (to be completed by respondent):

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720.80 (12/1/11) Page 2 of 4

2. Relief from stay should be granted because (check all that apply): (To be completed by creditor)Lack of adequate protection because of failure to make sufficient adequate protection payments and lack of a sufficientequity cushion.Lack of insurance on collateral.No equity in the collateral and the property is not necessary for an effective reorganization.Failure of debtor to make Chapter 13 plan payments.Failure of debtor to make payments to secured creditor required by ¶4 of Chapter 13 plan.Other (describe):

RESPONSE (Specify why relief from stay should be denied. If respondent proposes to cure a postpetition default, detail thecure by attaching a proposed order using Local Form (LBF) #720.90 available at www.orb.uscourts.gov under Rules &Forms/Local Bankruptcy Forms (LBF)) (to be completed by respondent):

3. Background (To be completed by creditor)

a. Date petition filed: ___________ Current Chapter: ____ (7 or 13)If 13, current plan date ___________ Confirmed: Yes NoIf 13, treatment of creditor’s prepetition claim(s) in plan:

If 7, debtor has has not stated on Local Form (LBF) #521 or #521.05 that debtor intends to surrender the collateral.

b. Creditor has a lien on the collateral by virtue of (check all applicable sections and also see ¶6 below):Security agreement, trust deed or land sale contract dated ___________, and, if applicable, an assignment of saidinterest to creditor. The security interest was perfected as required by applicable law on ___________.Retail installment contract dated ___________, and, if applicable, an assignment of said interest to creditor. Thesecurity interest was perfected on the certificate of title on ___________.Other (describe):

RESPONSE (Identify any disputed items and specify the pertinent facts) (to be completed by respondent):

4. Request for Relief from Codebtor Stay (Only Chapter 13)

a. ______________________________, whose address is _______________________________________________________________________, is a codebtor on the obligation described above, but is not a debtor in this bankruptcy.

b. Creditor should be granted relief from the codebtor stay because (check all applicable boxes): codebtor receivedthe consideration for the claim held by creditor, debtor’s plan does not propose to pay creditor’s claim in full, creditor’s interest would be irreparably harmed by continuation of the codebtor stay as a result of the default(s)described above and/or because:

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5. Other Pertinent Information (To be completed by creditor, if applicable):


6. Relief Requested (check all applicable sections): (To be completed by creditor)

Creditor requests relief from the automatic stay to allow it to foreclose its lien on the above identified collateral, and,if necessary, to take appropriate action to obtain possession of the collateral.

Creditor has a security interest in real property and requests relief from stay with respect to an act against such propertyand that the relief be binding in any other bankruptcy case purporting to affect such real property filed not later than 2years after the date of the entry of an order granting this motion. (If you check this box, you must complete ¶5 aboveto support this request. If you do not do so, the Court will not grant relief binding in any other bankruptcy case.)

Creditor requests that the 14-day stay provided by FRBP 4001(a)(3) be waived based on the following cause:

Other (describe and explain cause):

RESPONSE (Identify any disputed items and specify the pertinent facts. If respondent agrees to some relief, attach a proposedorder using Local Form (LBF) #720.90 available at www.orb.uscourts.gov under Rules & Forms/Local Bankruptcy Forms(LBF)) (to be completed by respondent):

720.80 (12/1/11) Page 3 of 4

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720.80 (12/1/11) Page 4 of 4

7. Documents:

If creditor claims to be secured in ¶3.b. above creditor has attached to and filed with this motion a copy of thedocuments creating and perfecting the security interest, if not previously attached to a proof of claim.

RESPONDENT requests creditor provide Respondent with the following document(s), if any marked, which are pertinentto this response:

Postpetition payment history.Documents establishing that creditor owns the debt described in ¶1 or is otherwise a proper party to bring this motion.Other document(s) (specific description):

CREDITOR/ATTORNEY

Signature:__________________________________Name:________________________________________Address:_______________________________________________________________________________________Email Address:__________________________________Phone No:______________________________________OSB#:_________________________________________

RESPONDENT DEBTOR/ATTORNEY (by signing, therespondent also certifies that [s]he has not altered theinformation completed by creditor)


RESPONDENT CODEBTOR/ATTORNEY (by signing,the respondent also certifies that [s]he has not alteredthe information completed by creditor)


YOU ARE HEREBY NOTIFIED THAT THE CREDITOR IS ATTEMPTING TO COLLECT A DEBT AND ANY INFORMATIONOBTAINED WILL BE USED FOR THAT PURPOSE.

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RELIEF FROM AUTOMATIC AND CODEBTOR STAY PROCEDURES

Filing Fee and Motion - The moving party must pay the filing fee if the motion is for relief from the stay of 11 USC §362(a), AND1.file a written motion EITHER: (i) IF it relates to DEBTOR relief in a Ch. 7 or 13, by using ONLY the COURT’S “FILLABLE”PDF VERSION of Local Form #720.80; OR, but only if pt. 1(i) does not apply, (ii) by preparing a unique motion which states:a. The present balance owing to the moving party excluding any precomputed interest or other unearned charges;b. The date upon which the debt was incurred;c. Whether the moving party holds a security interest or lien upon the debtor's property;d. The nature of the security interest or lien, the date upon which the security interest or lien was obtained, and if applicable, the

date upon which the security interest or lien was perfected;e. A description of the collateral sufficient for identification (e.g., street address);f. The fair market value of the collateral;g. A description of, and the amounts due upon, any other security interest or liens which have priority over that of the moving

party;h. Whether the debtor is in default and, if so, the number of defaulted installments and the total sums in default;i. The subsection of §362(d) under which relief is requested; ANDj. Any other facts which are relevant in determining whether relief should be granted.

Notice of Motion - The moving party must choose between, and completely fill out, the CURRENT version of the appropriate2.Notice of Motion:a. For Chapter 7 & 13 cases INCLUDING Chapter 13 CODEBTOR stay - Use Local Form #720;b. For Chapter 11 & 12 cases - Use Local Form #1124 [NOTE: LOCAL FORM #1124 REQUIRES THAT YOU OBTAIN

THE DATE, TIME AND LOCATION OF HEARING FROM THE COURT BEFORE SERVICE!];OR c. For Chapter 12 CODEBTOR relief - In Ch. 12. cases use Local Form #1220.

Service of Motion AND of Notice of Motion - The moving party must SIMULTANEOUSLY serve copies of BOTH: (a) the3.motion AND (b) the appropriate Notice of Motion (WITH Local Form #721 attached if a Ch. 7 or 13 case, OR Local Form#1220.5 if Ch. 12 CODEBTOR relief sought to ALL parties named in the certificate of service on the form).

IN CHAPTER 11 & 12 CASES THIS SERVICE MUST BE MADE WITHIN 2 BUSINESS DAYS OF OBTAINING AHEARING DATE (EXCEPT IF CH. 12 CODEBTOR relief is sought)!

Filing of Motion AND Notice with Clerk's Office - The moving party must, on the same date as copies are served per pt. 3, mail4.to, or directly file with, the Clerk of Court BOTH: (a) the completely filled out original Notice of Motion, AND (b) the properform of the ORIGINAL Motion per pt. 1.

Response AND Notice of Hearing - TO RESIST the motion a PARTY MUST, WITHIN 14 DAYS OF the Notice of Motion's5.SERVICE date, FILE BOTH a written RESPONSE PREPARED PER PT. 6, AND EITHER:a. (ONLY Chapter 7 & 13 cases, INCLUDING re Chapter 13 CODEBTOR) - A fully completed Notice of Hearing (using the

CURRENT version of Local Form #721) stating the date and time of the hearing [THIS INFORMATION MUST BECALCULATED USING information from point II. in the moving party’s Notice of Motion (Local Form #720)];

b. (ONLY Chapter 11 & 12 cases) - A separate certificate showing the date the moving party's Response copy was served; OR c. (ONLY Chapter 12 CODEBTOR relief - A fully completed Notice of Hearing stating the date, time and location of the hearing

using either the CURRENT version of Local Form #1220.5. [NOTE: THE NOTICE MUST BE SERVED WITHIN 2 DAYSOF OBTAINING IT FROM THE COURT!].

Form and Content of Response/Objection - It must state the specific facts upon which the motion is resisted, and include the6.specific facts EITHER: a. (If resisting DEBTOR relief in only a Ch. 7 or 13 case, INCLUDING Chapter 13 CODEBTOR relief) - In the applicable

“RESPONSE” portions on a copy of the ORIGINAL Motion [NOTE: If the Response will be electronically filed, theRESPONSE MUST BE PREPARED USING the “FILLABLE” PDF version of the ORIGINAL Motion unless BOTH theMotion was filed on paper AND it could NOT be otherwise electronically obtained from the movant].

OR b. (Any other Response) - On a SEPARATE document.

Failure to Respond/Object OR Serve Notice of Hearing - If neither a timely Response NOR, if applicable, a Notice of Hearing7.are filed, then either: (a) the Court may sign an ex parte order, submitted by the moving party, granting the relief; OR (b) theautomatic stay will either (i) expire 30 days after the motion was filed [per 11 USC §362(e)], or (ii) expire 20 days after a motionfor CODEBTOR relief is filed in chapter 12 & 13 cases [per 11 USC §1201(d) & §1301(d)].

Orders/Stipulations - If necessary, a proposed Order for relief from Debtor stay in Ch. 7 and 12 cases, AND for BOTH Debtor8.AND Codebtor relief in Ch. 13 cases, must be submitted using Local Form #720.90 (Order Re: Relief from Stay).

720.50 (12/1/08)

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APPEnDiX B—LBF 720, nOTiCE OF MOTiOn FOr rELiEF


In re ) Case No. ________________)) NOTICE OF MOTION FOR RELIEF) FROM (Check all that apply): ) AUTOMATIC STAY IN A CHAPTER 7/13 CASE

Debtor(s) ) CHAPTER 13 CODEBTOR STAY

I. YOU ARE NOTIFIED that a Motion was filed by ____________________________________________, the movingparty, for (Check all that apply):

Relief from the automatic stay protecting the debtor(s) and debtor's property, as provided by 11 USC §362.

Relief from the stay protecting the codebtor, whose name and service address are: _________________________________________________________________________________________________________________,and codebtor’s property as provided by 11 USC §1301.

II. A copy of the Motion is attached. The name and service address of the moving party's attorney (or moving party, if noattorney) are:_______________________________________________________________________________________________________________________________________________________________________________

III. If you wish to resist the Motion, you must, within 14 days of the service date shown below, file the following with the Clerkof the U.S. Bankruptcy Court [NOTE: If you mail the Response to the Court for filing, you must mail it at least 3 daysbefore the filing deadline, unless you use an overnight delivery service, so that it will actually be received at the Courton time]:

A. A written response that states the facts supporting the opposition to the Motion by filling in the applicable “Response”portions on a copy of the original Motion. [NOTE: If the Response will be electronically filed, the Response must beprepared using the “fillable” pdf version of the original Motion unless the Motion was filed on paper and could notbe electronically obtained from the movant];

And B. A fully completed Notice of Hearing using Local Form #721, including the date and time of the hearing. Availablehearing dates and times are posted on the Court’s website at www.orb.uscourts.gov under the “Hearings” heading. If you do not have internet access, please call the Court at (503) 326-1500 or (541) 431-4000 and press “0" to obtainthe required forms and hearing information from a Court clerk.

IV. Failure to Respond and Serve Proper Notice of Hearing. If you fail to file a timely response and a proper Notice ofHearing, then either:

A. The automatic stay will expire as to the debtor(s) pursuant to 11 USC §362(e) 30 days after the Motion was originallyfiled, and/or the stay protecting the codebtor will automatically expire pursuant to 11 USC §1301(d) 20 days afterthe date the Motion was originally filed;

Or B. The Court may sign an ex parte order, submitted by the moving party on Local Form #720.90, granting relief fromthe debtor stay and/or codebtor stay.

Clerk, U.S. Bankruptcy Court [NOTE: If the 5-digit portion of the Case No. begins with "3" or "4", mailto 1001 SW 5th Ave. #700, Portland OR 97204; OR if it begins with "6" or"7", mail to 405 E 8th Ave #2600, Eugene OR 97401.]

I certify that: (1) The Motion was prepared using the Court’s “fillable” PDF version of Local Form #720.80; and (2) that on___________ I served copies of this Notice and the Motion on the Debtor(s), any codebtor at the address listed above, Trustee,U.S. Trustee, members of any committee elected pursuant to 11 USC §705, and their respective attorneys.

Signature of Moving Party or Attorney (OSB#)720 (12/1/11)

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APPEnDiX C—LBF 115, FEES

FEESU.S. Bankruptcy Court for the District of Oregon

Chapter 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $306.00Chapter 7 Motion to Reopen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $260.00Chapter 11/Chapter 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,046.00Chapter 11/Chapter 9 Motion to Reopen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000.00Chapter 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $246.00Chapter 12 Motion to Reopen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200.00Chapter 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $281.00Chapter 13 Motion to Reopen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $235.00Chapter 15 Petition for Recognition of Foreign Proceeding [Note: If granted, must also pay applicable fee for case filing.]. . . . . . $1,046.00Chapter 15 Motion to Reopen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000.00

Abandonment of Property of the Estate - per FRBP 6007(b) or 11 USC §554(b) (Motion to Compel) . . . . . . . . . . . . . . . . . . . . . . . . . . $176.00

Adversary Complaint (No reopen fee necessary unless dismissal order requires one.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $293.00

Amendment to Mailing Matrix or Schedules D, E, F, G or H (unless only changing addresses of previously listed entity) . . . . . . . . . . . $30.00

Appeals - Notice of Appeal or Cross Appeal ($5) and Docketing ($293) [Note: $5 fee also applies to Fed. Gov’t. Agencies] . . . . . . $298.00- Authorization of Direct Appeal or Cross Appeal by Court of Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $157.00

Archived Record Retrieval (per file or docket) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.00

Certification of Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.00(Plus $.50 per page copy fee, and search fee also if deputy clerk has to locate document.)

Conversion/Reconversion from Ch. 7 to Ch. 11 (by debtor) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $755.00Conversion/Reconversion from Ch. 11 to Ch. 7 (Motions to and Notices of Conversion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15.00Conversion/Reconversion from Ch. 12 to Ch. 7 (Motions to and Notices of Conversion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60.00Conversion/Reconversion from Ch. 13 to Ch. 7 (Motions to and Notices of Conversion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25.00Conversion/Reconversion from Ch. 13 to Ch. 11 (by debtor) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $765.00

Copies - Made by Public Using Public Access Terminal at the Court (Search fee also applies if deputy clerk locates document.) . . . 10¢/pg.- Made by Court Employee (Search fee also applies if deputy clerk must locate document.) . . . . . . . . . . . . . . . . . . . . . . . . . . 50¢/pg.- Public Copier in Portland Office Lobby . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15¢/pg.- Hearing CD or Tape (whichever is available) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30.00

Exemplification Certificate (Same copy and search fees apply as in a certification.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.00

Filing/Indexing a Miscellaneous Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $46.00

Notice of Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $293.00

Registry, Handling Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Generally 10% of interest earnings on all deposits to the account.(Contact Financial Administrator re: reduced charge for deposits exceeding $100,000,000.00 or for funds held more than 5 years.)

Relief from Automatic Stay - per 11 USC §362(a) (Motion) (i.e., not motions solely per §1201 or §1301) . . . . . . . . . . . . . . . . . . . . . . $176.00

Returned Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.00

Search of Record (Each time a deputy clerk searches a file to look up information or copy documents.) . . . . . . . . . . . . . . . . . . . . . . . . . $30.00

Severance of Joint Debtors' Chapter 7 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $306.00Severance of Joint Debtors' Chapter 11 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,046.00Severance of Joint Debtors' Chapter 12 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $246.00Severance of Joint Debtors' Chapter 13 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $281.00

[Note: Severance is defined as any situation where, after a joint petition is filed, one debtor's estate (upon debtor request) splits from the other debtor's estate for any reason other than dismissal of one debtor's case.]

Withdraw Reference of a Case (Motion per 28 USC §157(d)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $176.00

Witness Fees (per day or any portion thereof) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40.00Mileage Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . available at www.gsa.gov/mileage

THE ABOVE INFORMATION IS SUBJECT TO CHANGE WITHOUT NOTICE,AND ONLY COVERS THE MOST COMMON FEES CHARGED BY THE COURT!

115 (11/1/11)

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4A–21


APPEnDiX D—LBF 720.90, OrDEr rE rELiEF

720.90 (12/1/10) Page 1 of 3


In re ) Case No.________________)) ORDER, DRAFTED ON:__________,) RE: RELIEF FROM (Check ALL that apply):) DEBTOR STAY CODEBTOR STAY) CREDITOR:____________________________________________

Debtor(s) ) CODEBTOR:___________________________________________

The undersigned, _________________________________, whose address is _____________________________________________________________________________, Email address is ____________________________________,Phone No. is ______________________________, and any OSB # is __________, presents this Order based upon:

The completed Stipulation of the parties located at the end of this document.

The oral stipulation of the parties at the hearing held on __________.

The ruling of the court at the hearing held on __________.

Creditor certifies any default notice required by pt. 5 of the Order re: Relief from Stay entered on __________ was served,and that debtor has failed to comply with the conditions of that order.

Creditor certifies that no response was filed within the response period plus 3 days to the Motion for Relief from Stay thatwas filed on __________ and served on __________.

IT IS ORDERED that, except as provided in pt. 4 below, the stay existing pursuant to 11 USC §362(a) shall remain in effectas to the property described below (hereinafter "the property"):

Personal property described as (e.g., 2001 Ford Taurus):

Real property located at (i.e., street address):

[Optional UNLESS In Rem Relief Granted] Exhibit A attached hereto is the legal description of the property.

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720.90 (12/1/10) Page 2 of 3

IT IS FURTHER ORDERED that the stay is subject to the conditions marked below:

1. Regular Payment Requirements.

a. Debtor(s) shall deliver regular monthly payments in the amount of $____________ commencing _________ toCreditor at the following address:

b. The Chapter 13 trustee shall immediately pay and disburse to Creditor the amount of $____________ per monthfrom funds paid to the trustee by Debtor(s), and continue each month until the plan is confirmed, at which time theplan payment terms shall control. Payments made by the trustee under this order shall be deemed to be paymentsunder the plan for purposes of the trustee's collection of percentage fees.

c. Debtor(s) shall pay to the trustee any and all payments required to be paid under the terms of the Chapter 13 plan.

2. Cure Payment Requirements. Debtor(s) shall cure the post-petition default of $____________ consisting of

(e.g., $_____ in payments and $_____ in late charges for April - June, 2002), as follows:

a. In equal monthly installments of $______________ each, commencing ___________ and continuing thereafterthrough and including __________.

b. By paying the sum of $_____________ on or before __________, and the sum of $_____________ on or before__________.

c. Other (describe):

3. Insurance Requirement(s). Debtor shall maintain insurance on the property at all times as required by the securityagreement, naming ___________________________________________________ as the loss payee.

On or before __________ Debtor(s) shall provide counsel for Creditor with proof of insurance.

4. Stay Relief and Codebtor Stay Relief without Cure Opportunity.

a. Upon default in the conditions in pt(s). ______ Creditor may file and serve a certificate of non-compliance specifyingthe default, together with a proposed order terminating the stay to allow Creditor to foreclose on, and obtainpossession of, the property to the extent permitted by applicable nonbankruptcy law, which the Court may grantwithout further notice or hearing.

b. The stay is terminated to allow Creditor to foreclose on, and obtain possession of, the property to the extent permittedby applicable nonbankruptcy law, provided that a foreclosure sale shall not occur prior to __________.

c. Creditor is granted relief from stay effective __________ to foreclose on, and obtain possession of, the property, tothe extent permitted by applicable nonbankruptcy law.

d. Creditor is granted relief from stay to foreclose on, and obtain possession of, the property, to the extent permittedby applicable nonbankruptcy law.

e. If a Creditor with a senior lien on the property is granted relief from stay, Creditor may file and serve a certificateidentifying the senior lien holder and a proposed order terminating the stay, which the Court may grant without furthernotice or hearing.

f. Creditor is granted relief from stay to ________________________________________________________________________________________________________________________________________________________.

g. Creditor is granted “in rem” relief from stay with respect to the real property described above and in Exhibit A. Thisorder shall be binding in any other case filed under 11 USC purporting to affect such real property filed not later thantwo (2) years after the date of the entry of this order unless the bankruptcy court in the subsequent case grants relieffrom this order. Any governmental unit that accepts notices of interests or liens in real property shall accept acertified copy of this order for indexing and recording.

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720.90 (12/1/10) Page 3 of 3

h. Creditor is granted relief from the codebtor stay, as it applies to the codebtor(s) named in the caption above, toenforce the terms of the contract and collect the deficiency balance.

5. Stay Relief with Cure Opportunity. Upon default in the checked condition(s) in pt(s). 1 - 3, Creditor shall serve writtennotice of default on Debtor(s) and Attorney for Debtor(s) that gives Debtor(s) ____ calendar days after the mailingof the notice to cure the default. If Debtor(s) fails to cure the default in accordance with this paragraph, then Creditorshall be entitled to submit a proposed order terminating the stay, which the Court may grant without further notice orhearing.

a. The notice of default may require that Debtor(s) make any payment(s) that becomes due between the date the noticeof default is mailed and before the cure deadline.

b. The notice of default may require Debtor(s) to pay $____________ for the fees and costs of sending the notice.

c. Only ____ notices of default and opportunity to cure are required per year (calculated from date of entry of thisorder), during the remainder of this case, or (describe):

6. Amended Proof of Claim. Creditor shall file an amended proof of claim to recover all accrued post-petition attorneyfees and costs and (describe):

7. Miscellaneous Provisions.

a. If Creditor is granted relief from stay, the 14-day stay provided by Fed. Rule Bankr. Proc. 4001(a) shall be waived.

b. Any notice that Creditor's counsel shall give to Debtor(s)/Codebtor, or attorney for Debtor(s)/Codebtor, pursuant tothis order shall not be construed as a communication under the Fair Debt Collection Practices Act, 15 USC §1692.

8. A final hearing on Creditor's motion for relief from stay shall be held on ___________ at ___________ in_______________________________________________________________________________________________.

9. Other:

PRESENTED, AND CERTIFIED, BY: ###

___________________________________________

IT IS SO STIPULATED:

Creditor’s Attorney: Debtor(s)’s Attorney:

___________________________________________ ____________________________________________Name: ____________________________________ Name: _____________________________________OSB#: ____________________________________ OSB#: _____________________________________

NO OBJECTION TO ORDER BY CASE TRUSTEE: Codebtor’s Attorney:

By:________________________________________ ___________________________________________Name: _____________________________________OSB#: _____________________________________

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4A–25


APPEnDiX E—LBF 1317.3, MOTiOn TO VALuE PrOPErTy PurSuAnT TO 11 u.S.C. § 506 AnD AVOiD WhOLLy unSECurED LiEn, AnD

LBF 717.15, LiEn AVOiDAnCE (§ 522(F)) PrOCEDurES


In re ) Case No.________________)) MOTION TO VALUE) PROPERTY PURSUANT TO) 11 U.S.C. §506 AND AVOID) WHOLLY UNSECURED LIEN

Debtor(s) ) IN A CHAPTER 13 CASE

Debtor moves to avoid a consensual lien on real property referenced below, and alleges as follows:

1. Name and address of lienholder whose lien is to be avoided:

2. Address and legal description (attach exhibit if necessary) of real property to which lien attaches:

3. Recording information regarding lien to be avoided:

(A) Recorded in _______________________________ County, State of _________________________;(B) Date recorded _________________________; and(C) Reference No./Book No./Reel No./Other Identifying Reference ______________________________

________________________________________________________________________________

4. Date petition filed: __________

5. Value of property as of petition date: $_________________

6. Name(s) of senior lienholder(s):

7. Present balance owing to senior lienholder(s) on petition date excluding any precomputed interest or otherunearned charges: $_________________

8. No equity in debtor’s property exists to which the lien referenced above can attach.

9. In light of the foregoing, and pursuant to 11 U.S.C. §§506(d) and 1322, debtor is entitled to avoid the lienreferenced above so that it no longer remains a lien against debtor’s real property.

____________________________________________________Debtor’s or Debtor’s Attorney’s Signature OSB #_____________________________________________________Address____________________________________________________Telephone Number

1317.3 (11/30/09)

4A–26


LIEN AVOIDANCE (§522(f)) PROCEDURES

1. Contents of Motion - The motion must be in writing and state:

a. Name and address of lienholder(s) whose liens are to be voided;b. The subsection of §522(f) under which relief is requested;c. The nature of the security interests or liens;d. The date upon which the security interests or liens were perfected;e. A description of the collateral sufficient for identification;f. The fair market value of the collateral;g. A description of and the amounts due upon any other security interests or liens upon the collateral;h. Description of nature and amount of exemptions impaired;i. The present balance owing on the security interests or liens upon the collateral, excluding any

precomputed interest or other unearned charges;j. Extent to which fixing of the liens should be avoided;k. Any other facts which would be relevant in determining whether the motion should be granted.

2. Notice of Motion - The debtor's attorney (or debtor(s), if no attorney) must completely fill out thecurrent version of Local Form #717.

3. Service of Motion AND of Notice of Motion - The debtor(s) must serve copies of both the Motion andNotice of Motion on all interested parties.

4. Filing of Motion and Notice of Motion with Clerk's Office - The debtor(s) must file both the originalMotion AND original Notice of Motion with the Clerk of Court (if not filed electronically, within 3 daysof serving the copies).

5. Response - If any party wishes to resist a motion filed against them, the party must file with the Clerkof the Bankruptcy Court, within the time fixed in the Notice of Motion, both:

a. A written Response; andb. A certificate showing service of a copy thereof on the debtor's attorney (or debtor(s), if no

attorney).

6. Contents of Response - A response must state the specific grounds upon which the motion isresisted.

7. Hearing - If a timely response is filed, the Court will decide whether a hearing will be required. If so,the hearing will be set and noticed by the Clerk.

8. Failure to Respond - If no timely response is filed, the Court may sign an ex parte order, submittedby the debtor(s), granting the motion.

717.15 (7/28/09)

4A–27


APPEnDiX F—LBF 1317, nOTiCE OF MOTiOn TO VALuE PrOPErTy PurSuAnT TO 11 u.S.C. §506 AnD AVOiD WhOLLy unSECurED LiEn in A ChAPTEr 134 CASE


In re ) Case No.________________)) NOTICE OF MOTION TO) VALUE PROPERTY PURSUANT) TO 11 U.S.C. §506 AND AVOID) WHOLLY UNSECURED LIEN IN

Debtor(s) ) A CHAPTER 13 CASE

A motion, COPY ATTACHED, was filed by the debtor to value property and avoid a wholly unsecured lien in aChapter 13 case (as provided by 11 U.S.C. §506(d)) held as collateral by the secured creditor whose name andaddress for mailing (see Fed. Bankruptcy Rule 7004) are:

The name, address, and telephone number of the debtor’s attorney (or debtor, if no attorney) are:

The debtor’s address and Taxpayer ID#(s) (last 4 digits) are:

If you wish to resist the motion you must, within 28 days of the service date shown below, file both a writtenresponse, and a certificate showing a copy of the response has been served on the person named above, withthe Clerk of the Bankruptcy Court.

Contents of Response - A response must state the facts upon which the motion is resisted.

If you file a timely response, and the Court requires a hearing, all parties will be given notice of the hearing date,time, and location.

Failure to Respond - If no timely response is filed, the court may sign an ex parte order, submitted by the debtor,granting the motion.

Filing Address - If the 5-digit portion of the Case No. begins with "3" or "4", mail to 1001 SW 5th Ave #700, PortlandOR 97204; or if it begins with "6" or "7", mail to 405 E 8th Ave #2600, Eugene OR 97401. ECF participants mustfile electronically.

Clerk, U.S. Bankruptcy Court

I certify that, pursuant to FRBP 7004, on __________, copies of both the above Notice and the Motion were servedon the trustee and creditor at the address listed above.

____________________________________________Signature (OSB # if attorney)

1317 (12/1/10)

4A–28


4A–29


APPEnDiX G—LBF 1317.5, OrDEr VALuinG PrOPErTy PurSuAnT TO 11 u.S.C. § 506 AnD AVOiDinG WhOLLy unSECurED LiEn in A ChAPTEr 13 CASE


In re: ) Case No._________________)) ORDER VALUING PROPERTY PURSUANT) TO 11 U.S.C. §506 AND AVOIDING WHOLLY

Debtor(s) ) UNSECURED LIEN IN A CHAPTER 13 CASE

THIS MATTER came before the Court on debtor’s Motion to Value Property Pursuant to 11 U.S.C. §506 and AvoidWholly Unsecured Lien in a Chapter 13 Case. The Court having reviewed the records and files herein, and havingdetermined that no timely response has been filed to debtor’s motion,

IT IS HEREBY ORDERED that the lien of _______________________________________________________,recorded in ____________________ County, State of ______________________ on ____________________,as Reference No./Book No./Reel No./Other Identifying Reference ____________________________________________________________________________________________, against debtor’s real property located at________________________________________________________________, a legal description of which is(attach exhibit if necessary) __________________________________________________________________________________________________________________________________________________________,is wholly unsecured, is avoided, and is no longer a lien against the real property referenced herein.

IT IS FURTHER ORDERED that if this case is dismissed or converted to one under Chapter 7, the lien avoidedby this order shall be reinstated.

IT IS FURTHER ORDERED that any claim formerly secured by the avoided lien will be treated as a secured claimto the extent previously paid by the Chapter 13 Trustee, and an unsecured claim for the remainder, withoutprejudice to any other objections to the claim.

###PRESENTED BY:

__________________________________Debtor/Debtor's AttorneyName: ____________________________OSB#: ____________________________

cc: Debtor; Debtor’s Attorney; Trustee; Lienholder (Insert address if not ECF Participant): ______________________________________________________________________________________________________

1317.5 (12/1/10)

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4A–31


APPEnDiX h—SAMPLE FOrM OF STiPuLATED OrDEr AVOiDinG JuniOr LiEn OF SECurED CrEDiTOr

In re:

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF OREGON

) ) Case No. ) ) STIPULATED ORDER A VOIDING JUNIOR

) LIEN OF

Debtors. )

BASED UPON the stipulation of the parties, good cause having been shown, IT IS HEREBY

ORDERED:

1. This Stipulated Order affects Debtors' property commonly known as

("the Property") and further described as follows:

2. This Stipulated Order affects creditor ("Creditor") and Creditor's

lien on the Propet1y by virtue of a Short Form Line of Credit Deed of Trust dated ,

recorded on , as Instrument Number ,, in the official records of

County, Oregon ("Lien").

3. Creditor's Lien on the Property shall be and is hereby AVOIDED and DISCHARGED

in full and shall no longer act as a lien against the Property.

Page 1 of 2- STIPULATED ORDER AVOIDING JUNIOR LIEN ALBERT & TWEET, LLP

PO Box 968, Salem, OR 97308 (503) 585-2056

4A–32


4. The Lien avoided by this Stipulated Order shall be reinstated pursuant to 11 U.S.C.

§349(b)(l )(C) if this case is dismissed. The lien shall also be reinstated if this case is converted to

a Chapter 7 case; v. 502 U.S. 410 (1992). The Lien shall also be reinstated if

debtors amend their Chapter 13 Plan to surrender the Properly, sell the Property, or refinance the

Property.

5. This Stipulated Order shall not avoid or impair any other lien of Creditor against the

Property.

6. Creditor's related claim in the sum of$. (Claim No. _j shall be treated,

allowed, and paid as a wholly unsecured claim, subject to reinstatement as a secured claim upon

occurrence of the events described in paragraph 4 of this Stipulated Order.

7. Debtors shall provide written notice to Creditor if this Stipulated Order is recorded by

Debtors in any County or filed in any State Comi. The notice shall include all pertinent recording

or filing information. If one of the events occurs which causes reinstatement of the Lien, Debtors

shall then record or file a notice that the Lien has been reinstated in the same County or State Court

where the Stipulated Order was recorded or filed and serve a copy thereof upon Creditor.

###

IT IS SO STIPULATED:

[Debtors' counsel], OSB # of Attorneys for Debtors of Allorneys for [Creditor]

Submilled by:

,, OSB # of Attorneys for [Creditor]

Page 2 of 2- STIPULATED ORDER AVOIDING JUNIOR LIEN OF ALBERT & TWEET, LLP

PO Box 968, Salem, OR 97308 (503) 585-2056

4A–33


APPEnDiX i—FOrM B 10, PrOOF OF CLAiM

B 10 (Official Form 10) (12/11)

UNITED STATES BANKRUPTCY COURT __________ DISTRICT OF __________ PROOF OF CLAIM

Name of Debtor: Case Number:

COURT USE ONLY

NOTE: Do not use this form to make a claim for an administrative expense that arises after the bankruptcy filing. You may file a request for payment of an administrative expense according to 11 U.S.C. § 503.

Name of Creditor (the person or other entity to whom the debtor owes money or property):

Name and address where notices should be sent:

Telephone number: email:

❐ Check this box if this claim amends a previously filed claim.

Court Claim Number:______________ (If known)

Filed on:_____________________ Name and address where payment should be sent (if different from above):

Telephone number: email:

❐ Check this box if you are aware that anyone else has filed a proof of claim relating to this claim. Attach copy of statement giving particulars.

1. Amount of Claim as of Date Case Filed: $_______________________________

If all or part of the claim is secured, complete item 4.

If all or part of the claim is entitled to priority, complete item 5.

❐Check this box if the claim includes interest or other charges in addition to the principal amount of the claim. Attach a statement that itemizes interest or charges.

2. Basis for Claim: _________________________________________________________________ (See instruction #2)

3. Last four digits of any number by which creditor identifies debtor:

___ ___ ___ ___

3a. Debtor may have scheduled account as:

_____________________________ (See instruction #3a)

3b. Uniform Claim Identifier (optional):

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ (See instruction #3b)

4. Secured Claim (See instruction #4) Check the appropriate box if the claim is secured by a lien on property or a right of setoff, attach required redacted documents, and provide the requested information.

Nature of property or right of setoff: ❐Real Estate ❐Motor Vehicle ❐OtherDescribe:

Value of Property: $________________

Annual Interest Rate_______% ❐Fixed or ❐Variable(when case was filed)

Amount of arrearage and other charges, as of the time case was filed, included in secured claim, if any:

$__________________

Basis for perfection: _______________________________________

Amount of Secured Claim: $__________________

Amount Unsecured: $__________________

5. Amount of Claim Entitled to Priority under 11 U.S.C. § 507 (a). If any part of the claim falls into one of the following categories, check the box specifying the priority and state the amount.

❐ Domestic support obligations under 11 U.S.C. § 507 (a)(1)(A) or (a)(1)(B).

❐ Wages, salaries, or commissions (up to $11,725*) earned within 180 days before the case was filed or the debtor’s business ceased, whichever is earlier – 11 U.S.C. § 507 (a)(4).

❐ Contributions to an employee benefit plan – 11 U.S.C. § 507 (a)(5).

Amount entitled to priority:

$______________________ ❐ Up to $2,600* of deposits toward purchase, lease, or rental of property or services for personal, family, or household use – 11 U.S.C. § 507 (a)(7).

❐ Taxes or penalties owed to governmental units – 11 U.S.C. § 507 (a)(8).

❐ Other – Specify applicable paragraph of 11 U.S.C. § 507 (a)(__).

*Amounts are subject to adjustment on 4/1/13 and every 3 years thereafter with respect to cases commenced on or after the date of adjustment.

6. Credits. The amount of all payments on this claim has been credited for the purpose of making this proof of claim. (See instruction #6)

4A–34


B 10 (Official Form 10) (12/11) 2

7. Documents: Attached are redacted copies of any documents that support the claim, such as promissory notes, purchase orders, invoices, itemized statements of running accounts, contracts, judgments, mortgages, and security agreements. If the claim is secured, box 4 has been completed, and redacted copies of documents providing evidence of perfection of a security interest are attached. (See instruction #7, and the definition of “redacted”.)

DO NOT SEND ORIGINAL DOCUMENTS. ATTACHED DOCUMENTS MAY BE DESTROYED AFTER SCANNING.

If the documents are not available, please explain:

8. Signature: (See instruction #8)

Check the appropriate box.

❐ I am the creditor. ❐ I am the creditor’s authorized agent. (Attach copy of power of attorney, if any.)

❐ I am the trustee, or the debtor, or their authorized agent. (See Bankruptcy Rule 3004.)

❐ I am a guarantor, surety, indorser, or other codebtor. (See Bankruptcy Rule 3005.)

I declare under penalty of perjury that the information provided in this claim is true and correct to the best of my knowledge, information, and reasonable belief.

Print Name: _________________________________________________ Title: _________________________________________________ Company: _________________________________________________ Address and telephone number (if different from notice address above): _________________________________________________ _________________________________________________ _________________________________________________ Telephone number: email:

(Signature) (Date)

Penalty for presenting fraudulent claim: Fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571.

INSTRUCTIONS FOR PROOF OF CLAIM FORM The instructions and definitions below are general explanations of the law. In certain circumstances, such as bankruptcy cases not filed voluntarily by the debtor,

exceptions to these general rules may apply. Items to be completed in Proof of Claim form

Court, Name of Debtor, and Case Number: Fill in the federal judicial district in which the bankruptcy case was filed (for example, Central District of California), the debtor’s full name, and the case number. If the creditor received a notice of the case from the bankruptcy court, all of this information is at the top of the notice.

Creditor’s Name and Address: Fill in the name of the person or entity asserting a claim and the name and address of the person who should receive notices issued during the bankruptcy case. A separate space is provided for the payment address if it differs from the notice address. The creditor has a continuing obligation to keep the court informed of its current address. See Federal Rule of Bankruptcy Procedure (FRBP) 2002(g).

1. Amount of Claim as of Date Case Filed:State the total amount owed to the creditor on the date of the bankruptcy filing. Follow the instructions concerning whether to complete items 4 and 5. Check the box if interest or other charges are included in the claim.

2. Basis for Claim: State the type of debt or how it was incurred. Examples include goods sold, money loaned, services performed, personal injury/wrongful death, car loan, mortgage note, and credit card. If the claim is based on delivering health care goods or services, limit the disclosure of the goods or services so as to avoid embarrassment or the disclosure of confidential health care information. You may be required to provide additional disclosure if an interested party objects to the claim.

3. Last Four Digits of Any Number by Which Creditor Identifies Debtor: State only the last four digits of the debtor’s account or other number used by the creditor to identify the debtor.

3a. Debtor May Have Scheduled Account As:Report a change in the creditor’s name, a transferred claim, or any other information that clarifies a difference between this proof of claim and the claim as scheduled by the debtor.

3b. Uniform Claim Identifier:If you use a uniform claim identifier, you may report it here. A uniform claim identifier is an optional 24-character identifier that certain large creditors use to facilitate electronic payment in chapter 13 cases.

4. Secured Claim:Check whether the claim is fully or partially secured. Skip this section if the claim is entirely unsecured. (See Definitions.) If the claim is secured, check the box for the nature and value of property that secures the claim, attach copies of lien documentation, and state, as of the date of the bankruptcy filing, the annual interest rate (and whether it is fixed or variable), and the amount past due on the claim.

5. Amount of Claim Entitled to Priority Under 11 U.S.C. § 507 (a). If any portion of the claim falls into any category shown, check the appropriate box(es) and state the amount entitled to priority. (See Definitions.) A claim may be partly priority and partly non-priority. For example, in some of the categories, the law limits the amount entitled to priority.

6. Credits:An authorized signature on this proof of claim serves as an acknowledgment that when calculating the amount of the claim, the creditor gave the debtor credit for any payments received toward the debt.

7. Documents:Attach redacted copies of any documents that show the debt exists and a lien secures the debt. You must also attach copies of documents that evidence perfection of any security interest. You may also attach a summary in addition to the documents themselves. FRBP 3001(c) and (d). If the claim is based on delivering health care goods or services, limit disclosing confidential health care information. Do not send original documents, as attachments may be destroyed after scanning.

8. Date and Signature:The individual completing this proof of claim must sign and date it. FRBP 9011. If the claim is filed electronically, FRBP 5005(a)(2) authorizes courts to establish local rules specifying what constitutes a signature. If you sign this form, you declare under penalty of perjury that the information provided is true and correct to the best of your knowledge, information, and reasonable belief. Your signature is also a certification that the claim meets the requirements of FRBP 9011(b). Whether the claim is filed electronically or in person, if your name is on the signature line, you are responsible for the declaration. Print the name and title, if any, of the creditor or other person authorized to file this claim. State the filer’s address and telephone number if it differs from the address given on the top of the form for purposes of receiving notices. If the claim is filed by an authorized agent, attach a complete copy of any power of attorney, and provide both the name of the individual filing the claim and the name of the agent. If the authorized agent is a servicer, identify the corporate servicer as the company. Criminal penalties apply for making a false statement on a proof of claim.

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B 10 (Official Form 10) (12/11) 3__________DEFINITIONS__________ ______INFORMATION______

Debtor A debtor is the person, corporation, or other entity that has filed a bankruptcy case.

Creditor A creditor is a person, corporation, or other entity to whom debtor owes a debt that was incurred before the date of the bankruptcy filing. See 11 U.S.C. §101 (10).

ClaimA claim is the creditor’s right to receive payment for a debt owed by the debtor on the date of the bankruptcy filing. See 11 U.S.C. §101 (5). A claim may be secured or unsecured.

Proof of Claim A proof of claim is a form used by the creditor to indicate the amount of the debt owed by the debtor on the date of the bankruptcy filing. The creditor must file the form with the clerk of the same bankruptcy court in which the bankruptcy case was filed.

Secured Claim Under 11 U.S.C. § 506 (a)A secured claim is one backed by a lien on property of the debtor. The claim is secured so long as the creditor has the right to be paid from the property prior to other creditors. The amount of the secured claim cannot exceed the value of the property. Any amount owed to the creditor in excess of the value of the property is an unsecured claim. Examples of liens on property include a mortgage on real estate or a security interest in a car. A lien may be voluntarily granted by a debtor or may be obtained through a court proceeding. In some states, a court judgment is a lien.

A claim also may be secured if the creditor owes the debtor money (has a right to setoff).

Unsecured Claim An unsecured claim is one that does not meet the requirements of a secured claim. A claim may be partly unsecured if the amount of the claim exceeds the value of the property on which the creditor has a lien.

Claim Entitled to Priority Under 11 U.S.C. § 507 (a) Priority claims are certain categories of unsecured claims that are paid from the available money or property in a bankruptcy case before other unsecured claims.

RedactedA document has been redacted when the person filing it has masked, edited out, or otherwise deleted, certain information. A creditor must show only the last four digits of any social-security, individual’s tax-identification, or financial-account number, only the initials of a minor’s name, and only the year of any person’s date of birth. If the claim is based on the delivery of health care goods or services, limit the disclosure of the goods or services so as to avoid embarrassment or the disclosure of confidential health care information.

Evidence of PerfectionEvidence of perfection may include a mortgage, lien, certificate of title, financing statement, or other document showing that the lien has been filed or recorded.

Acknowledgment of Filing of ClaimTo receive acknowledgment of your filing, you may either enclose a stamped self-addressed envelope and a copy of this proof of claim or you may access the court’s PACER system (www.pacer.psc.uscourts.gov) for a small fee to view your filed proof of claim.

Offers to Purchase a ClaimCertain entities are in the business of purchasing claims for an amount less than the face value of the claims. One or more of these entities may contact the creditor and offer to purchase the claim. Some of the written communications from these entities may easily be confused with official court documentation or communications from the debtor. These entities do not represent the bankruptcy court or the debtor. The creditor has no obligation to sell its claim. However, if the creditor decides to sell its claim, any transfer of such claim is subject to FRBP 3001(e), any applicable provisions of the Bankruptcy Code (11 U.S.C. § 101 et seq.), and any applicable orders of the bankruptcy court.

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4A–37


APPEnDiX J—FOrM B 10A, MOrTGAGE PrOOF OF CLAiM ATTAChMEnT

B 10A (Attachment A) (12/11)

Mortgage Proof of Claim Attachment If you file a claim secured by a security interest in the debtor’s principal residence, you must use this form as an attachment to your proof of claim. See Bankruptcy Rule 3001(c)(2).

Name of debtor: _______________________________________ Case number: ___________________________

Name of creditor: _______________________________________ Last four digits of any number you use to identify the debtor’s account:

____ ____ ____ ____

Part 1: Statement of Principal and Interest Due as of the Petition DateItemize the principal and interest due on the claim as of the petition date (included in the Amount of Claim listed in Item 1 on your Proof of Claim form).

1. Principal due (1) $ ____________

2. Interest due Interest rate Frommm/dd/yyyy

Tomm/dd/yyyy

Amount

_________% __________ _________ $ _______

_________% __________ _________ $ _______

_________% __________ _________ + $ _______

Total interest due as of the petition date $ _______ Copy total here ► (2) + $ ____________

3. Total principal and interest due

(3) $ ____________

Part 2: Statement of Prepetition Fees, Expenses, and Charges Itemize the fees, expenses, and charges due on the claim as of the petition date (included in the Amount of Claim listed in Item 1 on the Proof of Claim form).

Description Dates incurred Amount

1. Late charges ___________________________ (1) $ ____________2. Non-sufficient funds (NSF) fees ___________________________ (2) $ ____________ 3. Attorney’s fees ___________________________ (3) $ ____________ 4. Filing fees and court costs ___________________________ (4) $ ____________ 5. Advertisement costs ___________________________ (5) $ ____________ 6. Sheriff/auctioneer fees ___________________________ (6) $ ____________ 7. Title costs ___________________________ (7) $ ____________ 8. Recording fees ___________________________ (8) $ ____________ 9. Appraisal/broker’s price opinion fees ___________________________ (9) $ ____________

10. Property inspection fees ___________________________ (10) $ ____________ 11. Tax advances (non-escrow) ___________________________ (11) $ ____________ 12. Insurance advances (non-escrow) ___________________________ (12) $ ____________ 13. Escrow shortage or deficiency (Do not include amounts that are

part of any installment payment listed in Part 3.) ___________________________(13) $ ____________

14. Property preservation expenses. Specify:______________ ___________________________ (14) $ ____________ 15. Other. Specify:_____________________________________ ___________________________ (15) $ ____________ 16. Other. Specify:_____________________________________ ___________________________ (16) $ ____________ 17. Other. Specify:_____________________________________ ___________________________ (17) + $ ____________

18. Total prepetition fees, expenses, and charges. Add all of the amounts listed above. (18) $ ____________

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B 10A (Attachment A) (12/11) Page 2

Part 3. Statement of Amount Necessary to Cure Default as of the Petition Date

Does the installment payment amount include an escrow deposit?

No

Yes Attach to the Proof of Claim form an escrow account statement prepared as of the petition date in a form consistent with applicable nonbankruptcy law.

1. Installment payments due

Date last payment received by creditor _____________ mm/dd/yyyy

Number of installment payments due (1) ___________

2. Amount of installment payments due

______installments @ $ ____________

______installments @ $ ____________

______installments @ + $ ____________

Total installment payments due as of the petition date $ ____________ Copy total here ► (2) $ _____________

3. Calculation of cure amount

Add total prepetition fees, expenses, and charges Copy total from Part 2 here ► + $ _____________

Subtract total of unapplied funds (funds received but not credited to account)

- $ _____________

Subtract amounts for which debtor is entitled to a refund - $ _____________

Total amount necessary to cure default as of the petition date (3) $ _____________

Copy total onto Item 4 of Proof of Claim form

4A–39


APPEnDiX k—FOrM B 10S2, nOTiCE OF POSTPETiTiOn MOrTGAGE FEES, EXPEnSES, AnD ChArGES

B 10S2 (Supplement 2) (12/11)

UNITED STATES BANKRUPTCY COURT

__________ District of __________

In re ___________________________________, Case No. ___________________________ Debtor Chapter 13

Notice of Postpetition Mortgage Fees, Expenses, and Charges If you hold a claim secured by a security interest in the debtor's principal residence, you must use this form to give notice of any postpetition fees, expenses, and charges that you assert are recoverable against the debtor or against the debtor's principal residence. File this form as a supplement to your proof of claim. See Bankruptcy Rule 3002.1.

Name of creditor: _______________________________________ Court claim no. (if known): ______________________

Last four digits of any number you use to identify the debtor’s account: ____ ____ ____ ____

Does this notice supplement a prior notice of postpetition fees, expenses, and charges?

No Yes. Date of the last notice: _______________

mm/dd/yyyy

Part 1: Itemize Postpetition Fees, Expenses, and Charges

Itemize the fees, expenses, and charges incurred on the debtor’s mortgage account after the petition was filed. Do not include any escrow account disbursements or any amounts previously itemized in a notice filed in this case or ruled on by the bankruptcy court.

Description Dates incurred Amount

1. Late charges _________________________________ (1) $ ______________

2. Non-sufficient funds (NSF) fees _________________________________ (2) $ ______________

3. Attorney fees _________________________________ (3) $ ______________

4. Filing fees and court costs _________________________________ (4) $ ______________

5. Bankruptcy/Proof of claim fees _________________________________ (5) $ ______________

6. Appraisal/Broker’s price opinion fees _________________________________ (6) $ ______________

7. Property inspection fees _________________________________ (7) $ ______________

8. Tax advances (non-escrow) _________________________________ (8) $ ______________

9. Insurance advances (non-escrow) _________________________________ (9) $ ______________

10. Property preservation expenses. Specify:_________________ _________________________________ (10) $ ______________

11. Other. Specify:______________________________________ _________________________________ (11) $ ______________

12. Other. Specify:______________________________________ _________________________________ (12) $ ______________

13. Other. Specify:______________________________________ _________________________________ (13) $ ______________

14. Other. Specify:______________________________________ _________________________________ (14) $ ______________

The debtor or trustee may challenge whether the fees, expenses, and charges you listed are required to be paid. See 11 U.S.C. § 1322(b)(5) and Bankruptcy Rule 3002.1.

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B 10S2 (Supplement 2) (12/11) Page 2

Part 2: Sign Here

The person completing this Notice must sign it. Sign and print your name and your title, if any, and state your address and telephone number if different from the notice address listed on the proof of claim to which this Supplement applies. Check the appropriate box.

❐ I am the creditor.

❐ I am the creditor’s authorized agent. (Attach copy of power of attorney, if any.)

I declare under penalty of perjury that the information provided in this Notice is true and correct to the best of my knowledge, information, and reasonable belief.

_____________________________________________________________ Date ___________________ Signature mm/dd/yyyy

Print: _________________________________________________________ Title ______________________________________________ First Name Middle Name Last Name

Company _________________________________________________________

Address _________________________________________________________ Number Street ___________________________________________________ City State ZIP Code

Contact phone _______________________ Email __________________________________________

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4A–42


4B–i

Chapter 4B

COnFirMATiOn AnD ThE OrDEr COnFirMinG PLAn



Table of Contents

I. The Order Confirming Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B–1

II. The Confirmation Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B–2

III. Effect of Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B–3

Appendix—Local Bankruptcy Form 1350.05, Order Confirming Plan and Resolving Motions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B–5

4B–ii

Chapter 4B—Confirmation and the Order Confirming Plan

4B–1


i. ThE OrDEr COnFirMinG PLAn

After resolution of any objections to confirmation, either by set-tlement or ruling, counsel for debtor must draft the order confirming plan (“OCP”) for the court’s entry. Like the Chapter 13 plan, the OCP is completed using a mandatory local bankruptcy form (LBF #1350.05); the form OCP is attached as an appendix. In drafting the OCP, the debtor’s plan date should be included so that the OCP references the specific filed plan. Paragraph 4 includes an award of attorney fees; depending on whether the case is being administered through Portland or Eugene, this is either an initial award of attorney fees or a final award of pre-confirmation attorney fees. Obviously, the amount of attorney fees here should reflect the same totals as shown in the itemized statement/billing statement provided to the court. Attorney fees are discussed in greater detail in Chapter 6. Paragraph 5 includes the language valuing any collateral from Paragraphs 2(b)(1) and (b)(2) of the Chapter 13 plan along with the as-sumption or rejection of executory contracts and leases. The name(s) and address(es) for all creditors in Paragraphs 2(b) and 3 should be in-cluded in this paragraph. Paragraph 7 provides for the judicial lien avoidance requested in Paragraph 6 of the Chapter 13 plan; as in OCP Paragraph 5, the name(s) and address(es) for all creditors in Paragraph 6 should be included in this paragraph. Paragraph 11 allows interlineation of the Chapter 13 plan. Inter-lineation simply means to make changes to the Chapter 13 plan. Changes that can be made by interlineation avoid the need for a denial of confir-mation of the current plan and the filing (and service on all creditors) of a subsequent amended plan. The extent of changes allowed by interlin-eation is going to vary radically from case to case and from courtroom to courtroom. In addition, if any creditors are receiving specific treatment pursuant to an additional paragraph, those creditor(s) should also be listed in this paragraph. Changes by interlineation should be written to direct the reader to the paragraph where the change is occurring and provide directions for editing the Chapter 13 plan. However, it is generally appreciated by all parties that the changes made by interlineation be generally readable from the OCP. For example, changes to a secured creditor’s treatment in Paragraph 2(b)(1) should strike and replace the entire line of treatment rather than the single component at issue. Interlineation is appropriate for minor changes that do not have a substantive effect on any party. Such de minimis changes are routinely allowed. For example, a plan may have omitted including “None” in Paragraph 2(b); such a change could be made by interlineation without any impact on any party. To make such a change, Paragraph 11 would include the following: “¶ 2(b)(2): Insert ‘None.’ ” Interlineation is generally allowed to improve the treatment of creditors. If the debtor concedes that the trustee’s higher calculation of

4B–2


the appropriate BIN is correct, this would increase the amount required to be paid to unsecured creditors and no additional notice would be required for this improved treatment. To make such a change, Para-graph 11 would include the following: “¶ 2(g): Strike ‘$114’; replace with ‘$1,879.’ ” Interlineation can also be used to implement the resolution of a secured creditor’s claim. If the debtor had originally proposed payment to the creditor totaling $10,000 at 3.25% interest at $250 per month, but an agreement was reached to pay $12,000 at 4.25% interest at $300 per month, this change can generally be made by interlineation. It does not impact the BIN (the minimum to unsecured creditors), though it argu-ably decreases the amount of funds that will go to unsecured creditors from disposable income; whether an amended plan would be required to provide sufficient notice to unsecured creditors would be determined by the court. To make such a change, Paragraph 11 would include the following: “¶ 2(b)(1): Strike ‘Neighborhood CU—2006 Volkswagen Jetta—n/a—$10,000—n/a—3.25%—$250’; replace with ‘Neighborhood CU—2006 Volkswagen Jetta—n/a—$12,000—n/a—4.25%—$300.’ ” Paragraph 13 allows listed creditors to have additional time to object to an OCP. These are generally used when a creditor is potentially afflicted by a change made by interlineation to allow the creditor an ad-ditional opportunity to object. The language below the “###” contains both the certificate of ser-vice for service of the proposed OCP on the trustee and debtor’s coun-sel’s certification regarding the total attorney fees. OCPs may be signed pursuant to LBR 9011-4, which allows for “/s/ (Name)” signatures to be provided to the Chapter 13 trustee along with an image of the signature. After completion, the OCP is submitted to the trustee for review and lodging with the court. If settlements have reached with creditors, the OCP should be provided to those creditor(s) so that objections can be withdrawn on the basis of the OCP. If the matter was resolved by ruling, the proposed OCP should be provided to all contesting parties no later than three business days prior to lodging the OCP with the trustee. LBR 9021-1(a)(2)(A).

ii. ThE COnFirMATiOn PrOCESS

Local Bankruptcy Rule 3015-3(c) provides for the general confir-mation process. Objections to confirmation must be filed within 14 days after the meeting of creditors concludes. If no objections to confirmation were filed, confirmation is now on the “Fast Track” or “Rocket Dock-et”—debtor’s counsel must submit to the trustee a proposed confirma-tion order within 21 days after the meeting of creditors concludes (seven days after the end of the objection period). Assuming no objections from the trustee on the form of the OCP, it will be lodged with the court with-in seven days, and the court may enter the OCP without further notice or hearing. If an objection is filed by the trustee but no other objections are filed within the 14 days following the conclusion of the meeting of credi-

4B–3


tors, a proposed OCP can be provided to the trustee; if the trustee ap-proves, this OCP can be lodged with the court and entered without fur-ther notice or hearing. Likewise, if a creditor objections, but sufficient changes are made via the OCP to resolve the objection, a conditional withdrawal (based on the OCP) along with the trustee’s lodging of the OCP will enable the court to enter the order prior to the scheduled con-firmation hearing. If the court enters the OCP prior to the confirmation hearing, the case will not be called during the confirmation hearing docket and no appearance is required. However, even if the trustee submits the OCP to the court, so long as the case remains on the docket, counsel should appear at the confirmation hearing as the court may have questions or concerns regarding the OCP.

iii. EFFECT OF COnFirMATiOn

The confirmation of a Chapter 13 plan by the Bankruptcy Court serves as res judicata as to all issues addressed in the plan; it is a de-termination of the rights and liabilities of the debtor that is binding on both the debtor and creditors (irrespective of treatment in the plan or prior objection). 11 U.S.C. ‘ 1327(a). The binding effect of confirmation extends to all issues necessarily determined by the confirmation, includ-ing compliance with Sections 1322 and 1325. Lomas Mortgage USA v. Wi-ese, 980 F.2d 1279, 1284 (9th Cir. 1992), vacated on other grounds, 113 S. Ct. 2925 (1993) (“An order confirming a Chapter 13 plan is res judicata as to all justiciable issues which were or could have been decided at the confirmation hearing.”). “Once a Chapter 13 plan is confirmed, all of the property of the estate vests in the debtor and creditors are precluded from asserting any other interest than that provided for them in the con-firmed plan.” Fietz v. Great Western Saving (In re Fietz), 852 F.2d 455, 458 (9th Cir. 1988). The strength of this finality was the subject of the Supreme Court’s decision in United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367 (2010). In that case, the debtor’s plan provided for discharge of student loan obligations; it was undisputed that this was a violation of Section 523(a)(8) and Section 1325(a)(1). The Supreme Court confirmed that the entry of the order confirming plan was clear legal error; the con-firmation order was enforceable and binding because the creditor had notice of the error and failed to object or timely appeal. 130 S. Ct. at 1379. Section 1327(b) provides that all property of the estate vests in the debtor upon entry of the order of confirmation absent some contrary provision in either the plan or OCP. Nuanced differences in the Section 362 protections (the automatic stay) for property of the estate and prop-erty of the debtor may enable certain creditors to proceed against that property; in addition, post-petition creditors are free to proceed against property of the debtor. The extent of vesting of property brought into the estate by Section 1306 is unsettled.

4B–4


4B–5


APPEnDiX—LOCAL BAnkruPTCy FOrM 1350.05, OrDEr COnFirMinG PLAn AnD rESOLVinG MOTiOnS


In re )) Case No.________________)) CONFIRMATION HEARING DATE ___________)) ORDER CONFIRMING PLAN

Debtor(s) ) AND RESOLVING MOTIONS

The debtor's plan having been provided to creditors and the Court having found that it complies with 11 USC§1325, now, therefore IT IS ORDERED:

1. The debtor's plan dated ___________, as modified by any amendment shown in ¶11, is confirmed.

2. The debtor shall incur no credit or debt obligations during the life of the plan without the trustee's writtenconsent unless made necessary by emergency or incurred in the ordinary course of operating the debtor'sbusiness. Unless waived by the trustee in writing, the debtor shall report immediately, upon receipt of notice of thechange, to the trustee if actual or projected gross annual income exceeds by more than 10% the gross incomeprojected by the debtor in the most recently filed Schedule I. Except for those amounts listed in the schedules,the debtor shall report immediately to the trustee any right of the debtor or debtor's spouse to a distribution of funds(other than regular monthly income) or other property which exceeds a value of $2,500.00. This includes the rightto disbursements from any source, including, but not limited to, bonuses and inheritances. Any such funds towhich the debtor becomes entitled shall be held by the debtor and not used without the trustee's permission, or,if such permission is not obtained, a court order. The debtor shall not buy, sell, use, lease (other than a lease ofreal property in which the debtor will reside), encumber or otherwise dispose of any interest in: (a) real property;or (b) personal property with a value exceeding $10,000.00 outside the ordinary course of business without noticeto all creditors and the trustee, with an opportunity for hearing unless such property is acquired through the useof credit and the trustee's permission is obtained pursuant to the first sentence of this paragraph.

3. During the life of the plan, the debtor(s) shall timely file all required tax returns and provide copies of alltax returns to the trustee each year immediately upon filing with the taxing authority. The debtor’s failure to paypostpetition tax and/or domestic support obligations may constitute cause for dismissal of the debtor’s Chapter 13case under 11 USC §1307(c).

[Note: Printed text may not be stricken]

1350.05 (9/1/09) Page 1 of 3 *** SEE NEXT PAGE ***

4B–6


4. The debtor's attorney is awarded $_______________ for attorney fees, of which $_______________previously has been paid by the debtor, leaving a balance of $_______________ to be paid through the plan.

5. The value of collateral securing debts due holders of secured claims is fixed at the values stated in theplan or the modifications in ¶11 below, only if a valuation motion(s) was included in the plan and served as requiredunder FRBP 7004, or the allowed amount of the secured claim was fixed by consent of the concerned securedcreditor. In all other circumstances, the value of such collateral, if contested, shall be established through theclaims process or otherwise, as provided in title 11 or the FRBP. Executory contracts and unexpired leases areassumed or rejected as provided in the plan or the modifications in ¶11 below. The name and service address foreach creditor affected by this paragraph are [Note: List alphabetically and only one creditor per line]:

6. Nothing in the proposed plan or in this order shall be construed to prohibit the trustee from prevailing inany adversary proceedings filed under 11 USC §§544, 545, 547, 548 or 549.

7. (a) Pursuant to 11 USC §522(f)(1)(A) the court hereby avoids the following judicial liens [Note: Listedalphabetically, and only one per line, include each creditor’s name and service address]:

(b) Pursuant to 11 USC §522(f)(1)(B) the court hereby avoids the following non-purchase money liens[Note: Listed alphabetically, and only one per line, include each creditor’s name and service address]:

8. The debtor, if operating a business without a tax account, shall open a separate bank account andpromptly deposit all sums withheld from employees' wages and all employer payroll taxes, and shall make nodisbursements from such account except to pay tax liabilities arising from payment of wages.

9. All payments under the confirmed plan shall be paid no later than 5 years after the date the first paymentwas due under 11 USC §1326(a)(1). If all payments are not completed by that date, the case may be dismissed.

10. All creditors to which the debtor is surrendering property pursuant to the plan are granted relief from theautomatic stay to effect possession and to foreclose.

[Note: Printed text may not be stricken]

1350.05 (9/1/09) Page 2 of 3 *** SEE NEXT PAGE ***

4B–7


11. The debtor moves to amend the plan by interlineation as follows, which amendments are allowed andbecome part of the confirmed plan [Note: Listed alphabetically, and only one per line, include the name and aservice address for any creditor whose address is not listed in ¶5]:

12. Creditors with prepetition claims excepted from the debtor(s)’ discharge are enjoined from initiating anycollection actions against the debtor(s) until this case is closed, dismissed, or converted to another chapter undertitle 11, unless they obtain relief from this order.

13. The terms of this order are subject to any objection filed within 15 days by [Note: Listed alphabetically, andonly one per line, include the name and a service address for any creditor whose address is not listed in ¶¶ 5, 7or 11]:

14. The trustee is authorized to commence disbursements in accordance with the plan.

15. In the event this case is converted to Chapter 7, and the Chapter 13 trustee possesses funds aggregatingmore than $2,500.00 at the time of conversion, the Chapter 13 trustee shall forward all such funds to the debtor,in care of the debtor’s attorney, if any, 10 days after the first scheduled §341(a) meeting in the Chapter 7 caseunless, prior to that date, the Chapter 7 trustee files and serves a written objection pursuant to 11 USC §348(f)(2).In the event the funds in the trustee's possession at such time aggregate $2,500.00 or less, or in the event thiscase is dismissed, the Chapter 13 trustee shall forward all funds in the trustee's possession to the debtor in careof the debtor's attorney, if any. Nothing in this paragraph is to be construed as a determination of the rights of theparties to such funds.

16. All mortgage creditors are granted relief from the automatic stay and co-debtor stay to negotiate with thedebtor and co-debtor regarding modification of the underlying loan agreements, providing that any modificationmust receive the written consent of the trustee or be approved by order of the Court in order to become effective.Negotiations with represented debtors must be with debtor's counsel who may consent to the creditorcommunicating directly with the debtor. ###

I certify that on ___________ I served this Order on the trustee for submission to the court.

[To be completed if debtor’s attorney elected to be paid per Schedule 2(b) on LBF #1305.] I further certify underpenalty of perjury that, through ___________ [date], I have incurred hourly fees of $_______________, andexpenses of $_______________, for a total of $_______________. I have contemporaneous time recordsand will provide an itemization of my fees and expenses to the Court or any party in interest in this caseupon request.

___________________________________Debtor or Debtor’s AttorneyApproved: _______________________________

Trustee1350.05 (9/1/09) Page 3 of 3 [Note: Printed text may not be stricken.]

4B–8


5–i

Chapter 5

ChAPTEr 13: COnFirMATiOn TO COMPLETiOn

Ann K. ChApmAn




JordAn s. hAntmAn

Office of the Chapter 13 TrusteePortland, Oregon

Table of Contents

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–1

II. Debtor’s Post-Confirmation Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–1A. Paragraph 1 of the Confirmed Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–1B. Per ¶ 2 of the Order Confirming Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 5–1C. Per ¶ 3 of the Order Confirming Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 5–1D. Per ¶ 8 of the Order Confirming Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 5–2E. Per Extra Plan Paragraphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–2

III. Income Compliance and Other Plan Payments (Tax Refunds) . . . . . . . . . . . . . . . . 5–2A. Tax Refunds, Overtime, Bonuses, and Commission . . . . . . . . . . . . . . . . . . 5–3B. Income Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–3

IV. Post-Confirmation Life Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–4A. Changes Resulting in Budget Adjustments . . . . . . . . . . . . . . . . . . . . . . . 5–4B. Post-Petition “Assets” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–4C. Post-Petition Changes (Ethical Concerns) . . . . . . . . . . . . . . . . . . . . . . . . 5–5

V. Pay-Off and Plan Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–5A. Plan Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–5B. Balloon Payments, Sales, and Refinances . . . . . . . . . . . . . . . . . . . . . . . . 5–6C. Pay-Off and Case Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–7

VI. Post-Confirmation Modification (Amended Plans) . . . . . . . . . . . . . . . . . . . . . . 5–8A. Drafting and Filing Modified Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–8B. Additional Language Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–10C. Not Less Than (“NLT”) Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–10

VII. Claim Review and Claim Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–11A. Precautionary Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–11B. Review of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–11

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Chapter 5—Chapter 13: Confirmation to Completion

C. Claims Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–12

VIII. Motions for Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–13

IX. Motions to Dismiss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–14A. Trustee’s Motions to Dismiss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–14B. Motions for Failure to Provide Tax Returns . . . . . . . . . . . . . . . . . . . . . . 5–14C. Motions Filed for Failure to Complete Within 60 Months . . . . . . . . . . . . . . 5–14

AppendixesA. National Data Center Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–15B. Base Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–17C. Vehicle Purchase Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–19D. Imminent Payoff Request Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–23E. Checklist for Review of Proposed Post-Confirmation Amended Plan . . . . . . . 5–25

Table of Contents (continued)

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i. inTrODuCTiOn

While confirmation of a Chapter 13 case may initially seem like the end of the case (for the attorney), the extended duration of Chapter 13 cases (up to five years) makes further involvement in the case nearly assured. Over the duration of the case, there is regular monitoring re-quired to ensure continued compliance with the terms of the confirmed plan along with handling the various events that occur in any debtor’s life. This section will discuss several of the more common post-confir-mation events.

ii. DEBTOr’S POST-COnFirMATiOn DuTiES

A. Paragraph 1 of the Confirmed Plan

Per ¶ 1 of the confirmed plan, debtor shall pay to the trustee: 1. Plan payment every month; 2. All proceeds from avoided transfers; 3. All net tax refunds received during commitment period; 4. Any lump sum payment on or before a designated due date; 5. Other funds (e.g., nonexempt proceeds from personal in-jury suit, proceeds from sale or refinance of real property, proceeds from the sale of personal property).

B. Per ¶ 2 of the Order Confirming Plan

1. Debtor shall incur no credit or debt obligations without the trustee’s written consent unless made necessary by emergency or incurred in the ordinary course of debtor’s business. 2. Debtor shall report to the trustee if actual or projected gross annual income exceeds by more than 10% the gross income on the most recently filed Schedule I. 3. Debtor shall report to the trustee any right to a distribu-tion of funds (other than regular income) or other property that exceeds a value of $2,500 (e.g., bonuses and inheritances). Such funds shall be held by the debtor and not used without the trustee’s permission or a court order. 4. Debtor shall not buy, sell, use, lease (other than a lease of real property in which debtor will reside), encumber, or otherwise dis-pose of any interest in real property or personal property with a value exceeding $10,000 outside the ordinary course of business without no-tice to all creditors and the trustee with an opportunity for hearing, un-less such property is acquired through the use of credit and the trustee’s permission is obtained.

C. Per ¶ 3 of the Order Confirming Plan

1. Debtor shall timely file all required tax returns. 2. Debtor shall provide copies of all tax returns to the trustee each year immediately upon filing.

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D. Per ¶ 8 of the Order Confirming Plan

Debtor, if operating a business without a tax account, shall open a separate bank account and deposit all sums withheld from employees’ wages and all employer payroll taxes and shall make no disbursements from such account except to pay tax liabilities arising from payment of wages.

E. Per Extra Plan Paragraphs

1. Sale or refinance of real Property. Debtor shall obtain the trustee’s permission prior to any sale or refinance and, to obtain that permission, provide copies to the trustee of a preliminary closing state-ment and title report. The debtor shall provide the trustee with a copy of the final closing statement within 15 days following the close of the sale or refinance.

2. Sale of Personal Property. Within 15 days of the sale, debtor shall file a report with the trustee detailing the property sold, the selling price, the name, phone number, and relationship, if any, of the purchaser, and details of any retained proceeds claimed as exempt.

3. Lien Stripping. Within 60 days after confirmation, debtor shall file an adversary proceeding or motion to avoid a junior lien.

4. Overtime, Bonus, or Commission income. Debtor shall pay to the trustee, during the month of receipt, all bonuses and/or com-missions, less any tax obligations, and/or one-third of any gross over-time wages. At the end of each calendar year, the debtor shall provide the trustee with a copy of the year-end pay stub for each employment during that year.

5. Tax information. Debtor shall provide the trustee copies of quarterly IRS Form 1040ES, 941, along with proof of payment. Copies shall be submitted to the trustee within 30 days of filing with the IRS.

6. Future Employment. Debtor shall provide the trustee with one month of pay stubs and amended Schedules I and J within 60 days of gaining employment.

7. Future Charitable Contributions. Debtor shall provide the trustee proof of any charitable contributions. Proof shall be in the form of debtors’ cancelled checks or receipts/statements provided by the recipient and shall be presented to the trustee no later than March 1.

8. Pending Loan Modification. In the event debtor is offered an ongoing loan modification, debtor shall submit the loan modification agreement and any supporting documents to obtain trustee’s approval or court order prior to the loan modification going into effect.

iii. inCOME COMPLiAnCE AnD OThEr PLAn PAyMEnTS (TAX rEFunDS)

In addition to the scheduled plan payments, the debtor has two primary obligations with respect to his or her income. First, the debtor is required to pay over tax refunds received during the case as directed

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by Paragraph 1(c). Second, the debtor is typically required to provide financial reporting to the trustee; for most debtors, this is in the form of providing copies of tax returns on an annual basis, but other debtors may have additional reporting requirements or payment requirements.

A. Tax refunds, Overtime, Bonuses, and Commission

The form Chapter 13 plan requires the debtor to turn over tax refunds received during the duration of the case; the debtor can modify this requirement by an appropriate plan provision. The rationale for this provision is that such tax refund constitutes disposable income, as it was not required for the debtor’s reasonable and necessary expenses. Depending on the debtor’s income sources, the plan may also require that the debtor pay over all or part of overtime, bonuses, or commis-sions received during the duration of the case. Unlike some Chapter 7 trustees, the Chapter 13 trustees generally allow for the payment into the plan of the “net” tax refund; if the debtor has a liability to one authority and a refund from another, the debtor may use the tax refund to pay the tax liability. Any excess is paid over to the plan; any deficiency is the liability of the debtor.

B. income Compliance

In general, the regular monitoring of a Chapter 13 case is done through annual review of the debtor’s tax returns. The Chapter 13 trust-ee requires that the debtors provide their tax returns to the trustee; the trustee will compare the debtor’s tax return income to the Schedule I. If there is an increase in gross income of more than 10%, the trustee can seek a modification of the debtor’s plan under Section 1329. This reporting requirement can be handled either by the debtor or by the debtor’s attorney. The principal advantage to being handled by the debtor is the avoidance of further attorney fees. The disadvantage is that the debtor is then required to inform debtor’s counsel if an increase in income has occurred so appropriate action can be taken; otherwise, debtor’s counsel’s first indication of a change is the trustee’s contact or filing of a post-confirmation modification of the debtor’s plan. In addi-tion, debtor’s counsel has little or no way to ensure compliance; recently, the Chapter 13 Trustee provided a list of a debtors to debtor’s respective counsel who had not provided copies of their tax returns and required rapid compliance on pain of a motion to dismiss. If the debtor’s counsel is going to handle monitoring income compliance, this can be done in conjunction with monitoring the debt-or’s compliance with turnover requirements regarding tax refunds or other receipts. Debtor’s counsel can track whether a debtor has provid-ed the requisite tax returns and/or pay stubs returns, calculate the ap-propriate amounts that should have been turned over, and compare that to the trustee’s ledger (http://www.trustee13.com (Wayne Godare) or https://www.13network1.com/trustees/progs/login.asp (Fred Long)). For some debtors, counsel’s assistance in determining income compliance will save the debtor significant attorney fees in the long run. This is especially true if the debtor’s tax return is complicated or recog-

http://www.trustee13.com

https://www.13network1.com/trustees/progs/login.asp

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nition events have distorted the debtor’s total income. For example, a debtor with wages ($5,000/month) and rental income ($2,000/month before depreciation) has Schedule I gross income of $84,000 per year. On the tax return, the debtor has a $20,000 withdrawal from a pension pre-petition (i.e., used to bring mortgage current) and has depreciation of $500 per month in addition to the income above. The debtor’s tax return would reflect total income for the year of $98,000 (in excess of the 10% change allowed under the plan (10% increase would be $92,400 to-tal). However, no increase in income has occurred, as the pension with-drawal was a pre-petition recognition of income and depreciation is not a monthly expenditure. In doing income compliance, it is important to compare “apples to apples;” if a complicated or “misleading” tax return is accompanied by an explanatory letter, this can resolve potential prob-lems before they arise. In addition, if the debtor’s return evidences an actual increase in income, the debtor is required to notify the trustee. See ¶ 2, Order Confirming Plan (LBF 1350.05). While filing Amended Schedules I and J is not required, it is usually appropriate to file the same reflecting the increase income and (likely) increased expenses.

iV. POST-COnFirMATiOn LiFE EVEnTS

Again due to the extended nature of Chapter 13 plans, debtors frequently have significant life events occur during the course of their plan.

A. Changes resulting in Budget Adjustments

Over the duration of the plan, debtors will inevitably change jobs, earn promotions (or demotions), be subject to changes in consumer prices, and/or have children. As noted above, increases in income (in excess of 10%) should be reported to the trustee and Schedules I and J amended as appropriate. If the debtor has additional disposable income, the additional amounts are paid into the plan; no amended or modified plan is required because there is not an adverse impact on creditors. However, if the debtor experiences a decrease in disposable income, a post-confirmation modified plan is required to downwardly adjust the debtor’s plan payment. Prior to the filing of the post-confirmation plan, the debtor’s continued compliance with the confirmed plan is required; noncompliance will result in a motion to dismiss from the trustee.

B. Post-Petition “Assets”

In a Chapter 13 case, property of the estate includes all property acquired after case commencement. Ignoring issues presented by Sec-tion 1327(c) (regarding vesting), the debtor’s acquisition of either assets or causes of action post-petition must be addressed in the bankruptcy court. First, the order confirming plan (OCP) requires disclosure on re-ceipt to the trustee of disbursements or property in excess of a value of $2,500 and may not be used absent the trustee’s permission or court order.

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One scenario is that the debtor is involved in a motor vehicle in-cident and has a cause of action against the negligent driver. The debtor is free to retain a personal injury attorney to pursue the claim. 11 U.S.C. § 330(a)(4). In some situations, either debtor’s counsel or the trustee will believe that it is important to obtain court approval of any settlement; in other instances, it may not be appropriate. In general, it is better to obtain court approval for the actions of the debtor. The extent of post-petition property brought within the estate can be contentious and courts are not unified in their treatment of such property. Compare In re Zeitchik, No. 09-05821 (Bankr. E.D.N.C. Sept. 23, 2011) (finding inheritance acquired more than 180 days after petition was property of the estate), with In re Walsh, No. 07-60774 (Bankr. S.D. Ga. June 15, 2011) (finding 180-day limitation in Section 541 not extend-ed by Section 1306).

C. Post-Petition Changes (Ethical Concerns)

While many Chapter 13 cases involving joint debtors (husband and wife) are successfully completed, significant problems arise when the joint debtors determine that dissolution of marriage is warranted. The Oregon Rules of Professional Conduct prohibit representation where an actual conflict exists between clients (ORPC 1.7); in most (po-tentially all) dissolutions, the parties are significantly adverse. Each of the debtors should retain separate counsel to advise him or her regarding his or her options and should be so advised in writing consistent with the Oregon Rules of Professional Conduct.

V. PAy-OFF AnD PLAn COMPLETiOn

A. Plan Base

“Plan base” is an often confusing term used in Chapter 13 prac-tice. The plan base is the sum of all of the payments due under the plan; payment of the plan base is a condition of discharge. It is often confused with the not less than (“NLT”) number (described below); the difference between the plan base and either the NLT number or BIN is that while NLT and BIN measure output paid to unsecured creditors, the plan base is based on input (the amount to be paid into the plan). The “plan base” is the minimum amount that a debtor must pay into the plan before a discharge will be requested by the trustee. It includes: 1. Paragraph 1(a) plan payments required over commitment period (includes scheduled step payments and payments in approved modified plans); 2. Paragraph 1(b) proceeds from avoided transfers; 3. Paragraph 1(c) net tax refunds, calculated year by year, re-ceived by the debtor during the commitment period; 4. Paragraph 1(d) lump sums scheduled for a particular time; 5. Paragraph 1(e) additional funds (usually tied to an addi-tional plan paragraph); and

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6. Funds included in additional paragraphs (e.g., overtime income, nonprovable charitable contributions, additional amounts in lieu of pursuit of a preferential transfer). Some cases will require a debtor to pay more to the trustee than the plan base. Cases that usually fall into this category are cases with high mortgage arrears, high priority obligations, or a large “best inter-est” number. In those cases, the plan base is a moot number, and the total amount paid into the plan will be dictated by the individual cir-cumstances and claims. In most cases, the plan base is calculated by adding up the sched-uled plan payments (e.g., $250/month times 60 months) and adding tax refunds that must be paid into the plan along with any other payments due pursuant to the plan (e.g., bonuses or overtime). If the debtor has had a substantial increase in income that was not timely reported to the trustee, a potential resolution to address the previous income that should have been paid into the plan may be an order that increases the plan base. In a plan, the following language is used:

“To account for unreported increased income received by the debtor(s) during the period of __________ through __________, the debtor(s) shall pay an additional $__________ to the Trustee for distribution through the plan.”

Plan base does not require money to be paid to any particular creditors, it is simply a minimum amount that the debtor must pay into the plan. While it operates as one of the “floors” in a Chapter 13 case, it may not be the “ceiling.”

B. Balloon Payments, Sales, and refinances

In some cases, in order to ensure feasibility of the plan, the plan proposes to have a payment made separate from the payments made from the debtor’s disposable income (i.e., the regular monthly pay-ments). These may be result of the sale or refinance of personal or real property or by a loan or withdrawal from a retirement account. The typical scenario involves the sale or refinance of real prop-erty. If the property is being sold, it will be necessary to coordinate with the debtor’s real estate agent or broker to both obtain information and to ensure that the sales agreement includes language indicating that “Third Party Approval Is Required” since the court must approve the sale. Debtor’s counsel should obtain both the preliminary title report and the estimated closing statement (HUD statement). The Bankruptcy Court must approve sales of property outside the ordinary course of business; since most debtors are not the business of selling property or assets, this requirement will apply in most Chap-ter 13 cases. 11 U.S.C. § 363. Such sales must be noticed to all interested parties, including all creditors. This can be done through a notice and motion seeking authority for sale. The trustee’s office is going to want the preliminary title report to review the encumbrances on the property. Once the sale is approved by

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the Bankruptcy Court and closes, the trustee must be provided the final closing statement. The trustee will utilize this statement to determine the appropriate division of funds between the debtor and the plan. The status of whether a reinvestment requirement applies post-petition in a Chapter 13 case is unclear. While the trustee’s standard language once imposed such a requirement, it no longer includes that language. See ¶ 2, Standard Language. For cases previously confirmed, the requirement or lack thereof is binding in the case. United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367 (2010). At present, the issue is the extent to which the reinvestment requirement applies to property of the debtor after the claimed exemption. To the extent that Jacobson over-rules In re Lane, No. 06-32879 (Bankr. D. Or. March 14, 2007), and the same rationale is applied in Chapter 13, the debtor’s continued exemp-tion in the property may be conditioned on reinvestment. In re Jacobson, 2012 U.S. App. LEXIS 8103, Case No. 10-60040 (9th Cir. April 23, 2012) (determining that the California homestead reinvestment requirement applied in to a post-petition sale of a personal residence in Chapter 7). However, Jacobson is premised on the extent of the “property of the es-tate,” and that reasoning is likely inapplicable when the property sold has been vested in the debtor (such as in a post-confirmation sale). 11 U.S.C. § 1327(c).

C. Pay-Off and Case Completion

Depending on whether the case is a plan base case (determined by the debtor’s income) or a claims case (determined by the creditors that must be paid to obtain a discharge), calculation of the payoff will vary. In a plan base case, the debtor must pay the plan base to obtain a discharge; calculation of the plan base is discussed above. The plan base should be compared against the trustee’s ledger to determine whether any additional funds will be required to be contributed. For example, if the debtor failed to turn over a tax refund, this amount will be required to be paid into the case prior to the completion of the case for the debtor to receive a discharge. In addition, there may be additional attorney fees payable beyond the plan base, if applications for fees have been delayed until near the end of the case. In a claims case, the debtor must pay certain obligations. In this situation, the payments on the trustee’s ledger will show what amounts remain outstanding. While either the debtor or debtor’s counsel may request a payoff from the trustee’s office, the trustee’s office will not have the unapplied-for attorney fees information, so the payoff will not include this amount and, consequently, will be short. In addition, if you are seeking a pay-off quote from the trustee, all of the reporting documentation (i.e., tax returns, pay stubs, et al.) will need to have been provided so that the proper payoff can be calculated. At this time, working with the debtor, counsel should obtain both the funds for payoff and confirm that all post-petition domestic support

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obligations are current along with the completion of the required debtor education course. The trustee will request that the attorney file his or her final, supplemental fee application with the court. The court will take several days to review the application and require the debtor to send the appli-cation out on notice (see discussion regarding supplemental fees in the next section). Once the notice period had expired without objection, the final payoff can be mailed to the trustee. The trustee will disburse payoff funds at the end of the month. Be sure to consider the accrual of interest on secured claim if payoff is de-layed. After the trustee has disbursed all payments pursuant to the plan, the trustee will request that the case be discharged. Once discharge is re-quested, the court will order that the DSO certification be filed with the court; the debtor education certification should have been previously filed. Once both have been filed, discharge will be entered and the case closed. Following the recent amendments to the Federal Rules of Bank-ruptcy Procedure, secured creditors will also be involved in the case clos-ing. The trustee will file and serve a notice that the debtor has completed all cure payments owed to the secured creditor (pursuant to ¶ 2(b)(1) and the claim) within 30 days after the debtor completes all payments under the plan. FRBP 3002.1(f). If the trustee fails to file and serve this notice, the debtor may do so; in addition, the debtor may also file and serve this notice once cure payments have been completed. The secured creditor must then file a statement indicating either agreement that all cure payments have been made or an itemized statement of additional amounts required to cure. FRBP 3002.1(g). If there is a disagreement be-tween the trustee, debtor, and/or secured creditor regarding the appro-priate amount, if any, to bring the secured obligation current, a motion must be filed within 21 days of service of the creditor’s statement. FRBP 3002.1(h).

Vi. POST-COnFirMATiOn MODiFiCATiOn (AMEnDED PLAnS)

A. Drafting and Filing Modified Plan

If the post-confirmation changes result in the need for changes in the confirmed plan, the plan may be modified. The amendment may seek the following changes: 1. Increase or reduce the amount of payments to a particular class of claims; 2. Extend or reduce time for payments under the plan; 3. Alter the distribution to a creditor provided for in the plan to take account of payments made to such creditor outside of the plan; 4. Reduce amounts to be paid under the plan to take account of payments for health insurance expenses for the debtor (and depen-dents); and 5. Surrender property.

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Section 1329(b)(1) provides that Sections 1322(a), 1322(b), 1323(c), and 1325(a) all apply to any modification. Section 1325(b) (the commit-ment of disposable income requirement) is not applicable to modified plan. In re Sunahara, 326 B.R. 768 (9th Cir. BAP 2005). However, this does not wholly read out the disposable income requirement: “while the dis-posable income test is not directly implicated in a modified plan, ‘im-portant components of the disposable income test are employed as part of a more general analysis of the total circumstances mitigating in favor of or against the approval of modification. . . .’ ” In re Midgley, 413 B.R. 820, 825 (Bankr. D. Or. 2009) (quoting Sunahara). In order to propose a post-confirmation amended plan, you must first provide a copy of the proposed modified plan to the trustee along with a summary of the changes from the existing plan. LBF 1355.10. This obviously requires standard plan drafting (with a few additions described below), obtaining client approval of the “new” plan, and pre-paring updated Schedules A, B, I, and J. The amended schedules require-ments may be waived by the trustee when there are no changes in those schedules that affect the amended plan; in some cases, the trustee will waive the Schedules A, B, I, and J requirement if amended Schedules I and J are filed with the court and the modified plan is in response to the filed amendments. The trustee can waive all requirements on the modification cover sheet or none. The request for waiver should be in-cluded in the letter to the trustee summarizing the changes in the modi-fied plan. The trustee then has 14 days to provide comments or proposed changes to the amended plan. Waiver of the schedules requirement should be obtained in writing (or email) and held in the file so there is no confusion regarding whether the waiver was granted. After receiving comments from the trustee or after the 14-day pe-riod has expired (whichever is earlier), the amended plan (with or with-out the trustee’s suggested changes) may be filed with the court along with the notice of post-confirmation amended plan (LBF 1355.10). After filing, there is a 21-day period for the lodging of objections. If there are no objections, then the amended plan becomes the plan after the 21-day notice period expires. If there are objections to the plan, the court will set a hearing. Once the trustee has provided a response regarding the proposed modified plan, debtor’s counsel should revise the plan to the extent that the objections are well-taken by debtor’s counsel and the plan should be filed. Just because there are outstanding objections to the modified plan does not mean that the modified plan cannot be filed with the court—the plan must go out on notice to creditors who may have additional objec-tions. As a result, once the trustee’s initial review is completed, the mod-ified plan should be filed. The Portland trustee’s office has noted that many modified plan take much longer than necessary because debtor’s counsel seeks to resolve all outstanding objections prior to filing. Until the modified plan is filed with the court, the debtor must continue to comply with the confirmed plan. For debtors suffering a

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reduction in disposable income, the plan payment will not decrease un-til the filing of the amended plan. In emergency situations, the filing of a modified plan without following the review process will result in an objection by the trustee’s office; however, given a truly urgent situation, the focus will be on resolution of substantive objections to the modified plan rather than procedural objections to the method of filing.

B. Additional Language required

When a modified plan is filed, the new plan must include an ad-ditional paragraph for the following language:

This modified Plan is prospective only and shall not alter or af-fect the Debtor’s obligations under any prior Plan.

In some cases, the modified plan is in response to a trustee’s mo-tion to dismiss. Resolution of the motion will generally involve a “last chance” for the debtor to make the scheduled plan payments for a set duration; if payments are not timely made, the trustee may obtain dis-missal upon notice to the court that payments were not made. If this “last chance” is incorporated into the modified plan, the following language may be used:

Should debtor(s) fail to make any scheduled plan payments due under this plan beginning __________ to __________, this case shall be dismissed upon the filing of a Statement of Failure to Comply by the Chapter 13 Trustee reciting that the required payment(s) were not made. During this period, the debtor(s) personally are to pay a plan installment to the Chapter 13 Trust-ee for any month where any employer required to pay, fails to do so.

However, current practice is to use a separate “last chance” order. Be-cause of the required language that the modified Plan does not abrogate the Debtor’s prior obligations, further modification would incorporate such obligation and may be result in the debtors being permanently out of compliance with the terms of the modified plan. The Trustee’s office will coordinate the terms of the “last chance” order to allow the order to take effect after the filing of a modified plan so that the debtor’s compli-ance is measured against the modified plan.

C. not Less Than (“nLT”) numbers

NLT numbers are minimum distributions to unsecured creditors based on the debtor’s disposable income that are required if a trustee or a creditor files an objection on this basis. Current practice in Oregon generally does not utilize NLT numbers, but NLT numbers have been used previously and may appear in some confirmed plans. If a plan has an NLT number, it is a similar requirement to the BIN—it’s a minimum distribution to unsecured creditors. The trustee’s office will allow the modified plan to eliminate or reduce an NLT number in some situations. In general, if the NLT num-ber was a result of B22C calculations for projected disposable income and the debtor has paid his or her actual disposable income into the

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plan, reduction or elimination of this requirement is generally allowed. However, if a debtor utilized an NLT number to pay less than actual disposable income into the plan, subsequent modification of the NLT number may not be appropriate. For example, a debtor whose PDI was $500 with a 60-month ACP would have an NLT number of $30,000. If the debtor had previously been paying this amount into the plan but suffered a reduction in income, a modified plan will generally be allowed to eliminate or reduce the NLT number. However, a debtor whose PDI was $500 with a 60-month ACP but who agreed to the NLT number so he or she could pay expenses that were not “reasonable and necessary” (i.e., payments on purely recre-ational expenditure, like a boat) will likely not be allowed to eliminate the NLT number to the extent payments were diverted to pay for such expenditures.

Vii. CLAiM rEViEW AnD CLAiM OBJECTiOnS

A. Precautionary Claims

In many cases, it is advisable for the debtor to file claims on be-half of creditors. Secured creditors do not need to file a claim to protect their lien status; if they are undersecured, the failure to file a proof of claim will prevent them from sharing in the distribution for their unse-cured portion. In a Chapter 7 case, this will decrease the total amount of claims and increase the dividend to other creditors with no benefit to the debtor. Likewise, in Chapter 13, the trustee will not pay on a claim without a proof of claim; however, in Chapter 13, the debtor frequently wants a secured creditor to receive payments to cure mortgage arrears or to receive car payments. If the debtor doesn’t file the claim, no amounts will be paid by the trustee. An additional advantage is that an allowed proof of claim may be amended at any time. This can provide a benefit if the debtor misses several post-petition mortgage payments; with a proof of claim on file, a potential resolution could be an amended proof of claim including the post-petition arrears to be paid through the plan. Without a proof of claim, such a resolution is not possible. The same situation applies to priority creditors (who would not be discharged at the conclusion of the case) and creditors having a non-dischargeable debt such as student loans. In a case with a dividend to unsecured creditors, having student loans (typically a large debt) receive a large percentage of the unsecured dividends decreases the amount the debtor will have pay after their case is complete.

B. review of Claims

After the claims bar deadline and before the debtor’s opportunity for file claims on a creditor’s behalf expires, the claims register should be carefully reviewed. There are several areas of focus in this review. First, if the case is going to be a 100% case, verification and in-vestigation into all of the debts is warranted. The proofs of claim may include debts that are barred by the statute of limitations, overstate in-

5–12


terest or fees, or include duplicates (multiple collection agencies collect-ing the same debt). In some instances, an unsecured creditor’s proof of claim may include amounts the creditor cannot legally collect. For example, an unsecured claim for a deficiency claim on an automobile repossession may be time-barred by the time the petition is filed, but the debtor will probably still list it in Schedule F. Second, since the proofs of claim control the amounts to be paid on account of secured arrears and priority claims, these claims should be reviewed to both ensure the accuracy of the claim and update the fea-sibility analysis of the case. It is not surprising to have debtors state they are “only a few” payments behind on a mortgage only to find a prop-erly documented mortgage arrears claim for more than a year’s worth of payments (along with the attendant interest and fees). Such a change can radically affect whether the case will be successfully completed, and finding this out early can allow additional time to make the necessary adjustments. Third, the claims should be carefully reviewed for the debtor’s personal information. Creditors should be aware of Federal Rule of Bankruptcy Procedure 9037, which states that most documents may only contain the following: (1) the last four digits of the Social Security number and taxpayer identification number; (2) the year of the indi-vidual’s birth; (3) the minor’s initials; and/or (4) the last four digits of the financial account number. If an unredacted document is filed, after notice to the creditor, debtors may move to seal the document, require an amended document to be filed, and seek attorney fees incurred in enforcing this privacy protection. This review should be done as claims are received so that steps can be taken to purge the public record quickly of identifying information that may result in identity theft. Finally, while the trustee also make a review of the claims, the trustee’s review is predominantly confined to ensuring that secured claims have sufficient documentation for secured status and that prior-ity claims have properly claims the applicable priority. It is not uncom-mon for unrepresented parties to claim priorities that may not apply to their situations.

C. Claims Objections

The debtor can investigate whether a secured party took all nec-essary steps to properly perfect its security interest in a debtor’s asset. If the debtor discovers facts that show the secured creditor is not properly perfected, the secured creditor may lose its secured status after litigation in the bankruptcy, and the asset may become available under an appli-cable exemption (or have to be included in the BIN). The debtor can also investigate whether a priority party is truly entitled to that priority. If a debt is not really entitled to priority treat-ment, then either the debtor may be required to pay less into the plan (claims case) or additional amounts will flow to nondischargeable un-secured creditors, if applicable (plan base case). For example, a repay-

5–13


ment obligation to an ex-spouse may be improperly characterized as a domestic support obligation when it really is just a property settlement. If the debtor believes that a claim should be disallowed, an objec-tion to the claim is uploaded to the Bankruptcy Court using LBF 763.2.

Viii. MOTiOnS FOr rELiEF

Unlike Chapter 7, where the debtor has no ability to cure mort-gage arrears and responses to motions for relief are rare, in Chapter 13, debtors are frequently involved in contested motion for relief hearings. From a legal perspective, the determination of whether a motion for relief should be granted is identical to a motion for relief in any other bankruptcy proceeding. Relief from the stay must be granted upon a showing of cause for relief. Section 362(d)(1) includes as cause a lack of adequate protection of a party’s interest in property, and this is the most common basis for granting relief for cause. Section 361 describes the re-quirements and exclusions for adequate protection. The most common form of adequate protection is the making of a cash payment or periodic cash payments to the extent necessary to compensate for any decrease in value of the interest of the party making the request. 11 U.S.C. § 361(1). Another common basis is that there is that is a sufficient equity cush-ion that any decrease in value of the interest will not affect the secured creditor’s interest. Pistole v. Mellor (In re Mellor), 734 F.2d 1396 (9th Cir. 1984). However, in Chapter 13 practice, the courts will generally re-quire that the Chapter 13 debtor be current on post-petition payments. A failure to make the contractually scheduled post-petition payments is generally considered to be a sufficient basis for granting relief from the automatic stay even if payments provided to the creditor are sufficient to provide adequate protection or the creditor has sufficient equity in the property for adequate protection. When a motion for relief is filed, the debtor has 14 days to re-spond. Responses are made on the form motion for relief (LBF 720.80); in this way, both the movant and respondent’s pleadings are on a single document. When filed, the movant includes a cover sheet indicating that the motion has been filed (LBF 720); when a response is filed, the re-spondent includes a cover sheet stating the date and time of the hearing (LBF 721). Hearing dates and times are available on the court’s website (http://www.orb.uscourts.gov/Home/file_attachment/MEETMEP.pdf). LBF 720.50 provides useful instructions on the motion for relief procedures. In most cases, the general resolution of the motion for relief is payments to the secured creditor to cure the post-petition arrears. In general, the cure is made over a few months, though longer periods are sometimes permitted. The trustee is required to approve an order on the motion for relief that uses LBF 720.90. In general, the trustee does not participate in motion for relief matters. In its review, the trustee’s office will gener-ally look at whether a loan modification is sought (loan modifications

http://www.orb.uscourts.gov/Home/file_attachment/MEETMEP.pdf

http://www.orb.uscourts.gov/Home/file_attachment/MEETMEP.pdf

5–14


require trustee approval) or whether the order provides for changes in the plan.

iX. MOTiOnS TO DiSMiSS

A. Trustee’s Motions to Dismiss

The Trustee will normally file a motion to dismiss in three sepa-rate instances: (1) debtor has failed to make payments on a timely basis; (2) debtor has failed to provide copies of tax returns annually; or (3) debtor is unlikely to complete the plan in the required 60 months. After consultation with the debtor regarding the circumstances leading to the motion, decisions need to made about whether to continue in Chapter 13 or whether to convert or seek a hardship discharge if income has been reduced significantly. If income has been temporarily reduced and payments to secured creditors in ¶ 2(b)(1) are not adversely affected, the typical resolution is an agreement to resume payments on a consistent basis. This period typically lasts six months. If the debtor fails to make a payment to trustee each and every month during this time frame, the trustee will send a statement of failure to comply giving the debtor one last chance before filing the statement and forcing the dismissal of the case.

B. Motions for Failure to Provide Tax returns

Motions for failure to provide tax returns are typically resolved by obtaining an extension, if necessary, so returns can be prepared or by simply providing the returns the debtor has forgotten to forward.

C. Motions Filed for Failure to Complete Within 60 Months

Motions filed for failure to complete within 60 months can some-times be resolved creatively by “pulling rabbits out of hats” (e.g., bor-rowing funds from a relative, a 401(k) loan, last-minute amendments of plans to eliminate certain obligations (payment of liens, reduction of BIN when values have fallen). In most cases, the trustee prevails on such a motion if the debtor can’t find the money to complete the case, and the debtor should review options including conversion, hardship discharge, or refiling after dismissal. Section 109(g) generally does not apply when the debtor case simply fails (though in a refiled case, the automatic stay may need to be extended, see Section 362(c)(3)(B)).

5–15


APPEnDiX A—nATiOnAL DATA CEnTEr GuiDE

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5–17


APPEnDiX B—BASE CALCuLATiOn

5/4/12 Case #:Case Name:

Petition Date:

Calculated Plan Base: $0.00

Payments MonthsX = $0.00X = $0.00X = $0.00X = $0.00X = $0.00X = $0.00X = $0.00X = $0.00X = $0.00X = $0.00

Equal 36 or 60: 0Sub Total $0.00

¶1(b) proceeds:

Plus Income Tax Refunds ¶1(c):Year Net Refund

Sub Total $0.00

¶1(d) lump sum:

¶1(e) additions:

Plus Additional Funds per Plan:Paragraph:Paragraph:Paragraph:Paragraph:Paragraph:Paragraph:

Sub Total: $0.00

¶ 1(b) proceeds from avoided tranfers

¶1(c) calculated year by year, net tax refunds attributable to pre and/or post petition tax

years received by the debtor during the term of their Plan, for either 36 months (below

median), 60 months (above median) or the optional “life of the plan” depending on which box is checked. **Be sure to account for any EIC exemption or refund retention if allowed

via special plan paragraph.

Version 2012.04.18

¶1(d) lump sum payments

¶1(e) usually tied to special paragraph(s)

Funds included in added paragraphs such as overtime income, non-provable charitable contributions, additional amounts in lieu of the pursuit of preferential tranfsfers, etc.

Base Calculation

Enter the payment structure as outlined in ¶1(a) of the Plan. If ¶1(c) of the plan has the 36 months or “life of the plan” box checked, enter the first 36 months of payments. If the 60 months box is checked, enter 60

months of payments. Be sure to include any payment changes for approved §1329 modified plans.

Please note that the plan base is the minimum that must be paid. Cases with high mortgage arrears, high priority debt obligations and/or large "best interest" numbers

may require the debtor(s) to pay more than the Plan Base.

5–18


5–19


APPEnDiX C—VEhiCLE PurChASE rEquEST

“BASIC NEEDS” Vehicle Purchase Program

Guidelines for Chapter 13 Plan Auto Financing

Loan Amount: Not to exceed $14,000.00 Monthly Payments: Not to exceed $400.00 Loan Term: 24 to 60 months Interest Rate: Not to exceed 29% Down Payment: 5% to 10% down Vehicle Type: Suggested mileage not to exceed 100,000 Service and Safety inspection performed Extended warranty may be allowed Luxury vehicle or SUV usually not allowed

Chapter 13 Repayment Plan Must Be Current

1. Debtors must notify their Attorney regarding the intention of a vehicle purchase.

2. Debtors will deal directly with Broker/Dealership for pre-approval of financing before final selection of a vehicle is made.

3. Along with the Vehicle Purchase Request Form, Trustee will require an amended budget (Schedules I and J). Debtor should seek budget forms from their bankruptcy attorney and his/her assistance in completing the forms.

4. Debtor’s Attorney will fax completed forms to Trustee’s office for evaluation.

5. Trustee’s office will approve or deny based on information submitted and fax or email response to Debtor’s attorney within 2-3 business days. This may be extended to 5 business days during times of heavy credit request activity.

6. Broker/Dealership may require the following for final approval: a. Full time employment b. Valid Drivers License c. Proof of Auto Insurance d. Personal References

Vehicles targeted for the program will be BASIC NEEDS vehicles. They should be economical to drive, maintain and insure. Additionally, they should have a history of reliability. Sports cars, luxury vehicles and (in most cases) SUV’s are prohibited from this program. All vehicles will be based on the absolute need of Debtor for BASIC RELIABLE TRANSPORTATION to and from his/her place of work so that the plan may continue to be funded successfully.

5–20


REQUEST TO PURCHASE A VEHICLE

DEBTOR NAME: ________________________ DEALERSHIP: ____________________________

ADDRESS: _____________________________ CONTACT: _______________________________

CASE #: _______________________________ EMAIL: __________________________________

PHONE: _______________________________ PHONE:

1. DATE: __________________________

2. TYPE OF VEHICLE: _____________________________________ ODOMETER: _______________ (Year, Make, Model, Trim)

3. PRICE: _______________+ DEALER SERVICES:_________________ INTEREST RATE:________

4. AMOUNT OF DOWN PAYMENT: _____________________FINANCE TERM (MONTHS):_______

5. SOURCE OF DOWN PAYMENT: ( ) Cash ( ) Vehicle Trade-in If cash, source:_______________________ Type of Vehicle Trade-in: ______________________

6. LOAN AMOUNT: ___________________________________________________________________

7. MONTHLY PAYMENTS: _____________________________________________________________

8. REASON FOR PURCHASE: ___________________________________________________________

CHECK AND SATISFY ONE:

� AMENDED BUDGET ATTACHED THAT INCLUDES PROJECTED CAR PAYMENT AND A COPY OF A WRITTEN ESTIMATE TO REPAIR THE VEHICLE

� NO AMENDED BUDGET NECESSARY: ( ) Vehicle Purchase Contemplated and in Plan ( ) Vehicle Purchase Replaces Car Payment in budget

Comment: _________________________________________________________________________________

__________________________________________________________________________________________

Signature: _________________________________ or _________________________________ Debtor Debtor’s Attorney

Request Approved as Stated:_________________________ Date:___________________ Wayne Godare, Trustee PLEASE NOTE: Approval is good for 60 days only.

Request denied for the following reason(s):_______________________________________________________

Find updated Trustee forms at www.portland13.com/forms.htm

5–21


Below is a list of dealerships (alphabetical) that have submitted vehicle purchase requests to the Trustee’s office within the last 6 months (as of 2-1-2012):

Bear Country Auto Center762 NW 6th StRedmond, OR 97756541-548-3887Website: none found

Broadway Toyota55 NE BroadwayPortland, OR 97232866-545-4948Website: www.broadwaytoyota.com

Carr Auto Group15005 SW TV HighwayBeaverton, OR 97006Sales: 503-644-2161Website: www.carrauto.com

Driven Auto Sales18803 SE McLoughlin BlvdMilwaukie, OR 97267503-342-6264Website: www.driven77.com

Dick HannahFollow this link for locations: http://www.dickhannah.com/about/hours-and-directions360-256-5000Website: www.dickhannah.com

Gage Auto Sales13432 SE McLoughlin BlvdMilwaukie, OR 97222Phone: 503-754-9617Website: www.gageauto.com

Gladstone Nissan19505 SE McLoughlin BlvdGladstone, OR 97027888-861-0376Website: www.mygladstonenissan.com

Gladstone Suzuki18500 SE McLoughlin BlvdMilwaukie, OR 97267503-513-6600Website: www.autotrucksource.com

Larry H. Miller750 SW Oak or 2871 SE TV HighwayHillsboro, OR 97123866-740-4995 or 888-231-7536Website: www.lhmauto.com

Ron Tonkin Honda300 SE 122nd AvePortland, OR 97233888-803-5097Website: www.rontonkinhonda.com

Royal Moore1326 SE Enterprise CircleHillsboro, OR 97123503-648-0624Website: www.royalmoore.com

Smartway Advisors6700 NE 79th CourtPortland, OR 97218503-795-7700Website: http://www.smartwayadvisors.com/***Has Chapter 13 Program, click here.

Town & Country Chrysler16800 SE McLoughlin BlvdMilwaukie, OR 97267866-270-9225Website: www.drivehomehappy.com

Toyota Scion of Bend61430 S. Hwy 97Bend, OR 97702877-451-4774Website: www.toyotaofbend.com

Weston GMC22555 SE Stark StGresham, OR 97030503-665-2166Website: www.buyweston.com

5–22


5–23


APPEnDiX D—iMMinEnT PAyOFF rEquEST FOrM

�Wayne�Godare�Chapter�13�Bankruptcy�Trustee�District�of�Oregon�–�Portland�1300�SW�5th�Ave�Suite�1700�

Portland,�OR�97201�(503)�972�6300�

FAX�(503)�972�6313�E�mail�address:�[email protected]�

�THIS�IS�A�FORMAL�REQUEST�FOR�AN�IMMINENT�PAYOFF.��THIS�MEANS�THE�DEBTOR(S)�HAS�RECEIVED�OR�WILL�RECEIVE�FUNDS�WITHIN�THE�NEXT�30�DAYS�FOR�THE�PURPOSE�OF�PAYING�

OFF�THE�CASE.�

Case�status�information�may�be�obtained�at�the�following�website�for�debtor(s):�www.13datacenter.com�or�for�attorneys�at:�www.trustee13.com.�Please�note�the�

information�provided�on�the�website�is�one�business�day�behind.�For�attorneys,�if�you�do�not�have�access�to�the�website,�you�may�download�a�web�access�agreement�at�

www.portland13.com/contact.htm��

IF�YOU�ARE�SIMPLY�REQUESTING�A�CASE�STATUS�OR�A�BASE�BREAKDOWN,�PLEASE�SEND�AN�E�MAIL�TO:�[email protected]�WITH�THE�DEBTOR(S)�NAME�AND�CASE�NUMBER�

IN�THE�SUBJECT�LINE�AND�YOUR�REQUEST�IN�THE�BODY�OF�THE�E�MAIL.�IF�YOU�ARE�REQUESTING�A�PAYOFF,�YOU�MUST�FILL�OUT�THIS�FORM�IN�ITS�ENTIRETY.��PLEASE�ALSO�NOTE�

IT�MAY�TAKE�UP�TO�2�WEEKS�TO�PROCESS�YOUR�REQUEST.��

THANK�YOU�FOR�YOUR�COOPERATION!�

Date�of�Request:� � � � Send�response�to:�

Case�Name:� � � � � E�mail�or�Fax�#:�

Case�Number:��

Lump�Sum�Payoff�(debtor�has�received�or�will�receive�funds�in�the�form�of�a�lump�sum�for�the�purpose�of�paying�off�the�case).��Please�identify�the�source�of�funds:�

�

�

To�Attorneys:�Please�complete�this�portion�if�you�anticipate�filing�final�fees�in�this�case.��The�Trustee�will�include�the�figure�to�help�avoid�delays�in�the�final�audit/discharge�process.��Please�include�$��in�the�Trustee’s�estimated�payoff�for�anticipated�final�attorney�fees.��

This�figure�is�only�an�estimate�and�is�subject�to�the�final�fee�application.�

Print Form

5–24


5–25


APPEnDiX E—ChECkLiST FOr rEViEW OF PrOPOSED POST-COnFirMATiOn AMEnDED PLAn

BASE??ALL REFUNDS SENT IN? FEASIBLE IF NOT??

IF CASE IS OVER 36 MONTHS, RUN BASE CALCULATION! Is case feasible to not only pay the claims but also meet their base????

CHECKLIST FOR PROPOSED MODIFIED PLAN REVIEW

____ Labeled “amended?”

____ What month is case in?

____ Is there an MTD?

____ Check delinquency. If delinquency is more than the amount

of the NEW payments, require drop dead language

____ Plan Date – check to make sure it is a new date

____ Check start date in ¶1(a)

____ Check commitment period in ¶1(c)

____ Check start dates in ¶2(b)(1) and ¶2(b)(2) –

do they match ¶1(a)? Is start date appropriate? Make sure

that Para. 1 start date will not cause any mis-disbursed funds

due to changed Para. 2(b) start dates.

____ Is “original” stricken on plan for attorney fees?

____ Check total attorney fees. Check remaining attorney fees.

____ Analyze for attorney fee payment option conflicts & reduction in supplemental fees.

____ Check for confirmed collateral values and BI#.

____ Is prospective plan language included? Always required.

____ Look for added or deleted plan provisions

____ Does drop dead language start date match ¶1(a) and ¶2(b)?

____ If unemployed, require amended schedules w/in 30 days of employment.

____ Check OCP

____ Look for A,B,I,J, Ex. D-2. Require schedules if lowering payments for 6 months or more.

____ Compare modified schedules with original schedules

____ Is budget reasonable?

____ Is there an increased income issue? If greater than 10% analyze further.

____ Verify feasibility of plan. If not feasible, object.

____ Are all tax returns received?

____ Have tax refunds been paid in?

____ Request pay stubs when necessary

____ Do we have all charitable contribution YTD statements if required?

____ Do we have YTD bonus/commission statements if required?

____ Waive Schedules? ____ Require Schedules?

5–26


6–i

Chapter 6

ChAPTEr 13 POTPOurriChristopher n. Coyle


JordAn s. hAntmAn

Office of the Chapter 13 TrusteePortland, Oregon

Table of Contents

I. Tax Issues in Chapter 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–1A. The Three Amigos: Priority Taxes, Dischargeable Taxes, and

Nondischargeable, Nonpriority Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 6–1B. Tax Claims in Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–2C. Tax Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–3D. Determination of Tax Liabilities—Section 505 . . . . . . . . . . . . . . . . . . . . . 6–4E. Post-Petition Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–5F. Taxing Authorities in the Bankruptcy Court . . . . . . . . . . . . . . . . . . . . . . 6–6G. Post-Discharge Satisfaction of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–6H. Revising Estimated Tax Withholdings . . . . . . . . . . . . . . . . . . . . . . . . . . 6–6

II. Service (FRBP 7004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–7A. How to Serve Pursuant to 7004. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–8B. How to Demonstrate Compliance with 7004 . . . . . . . . . . . . . . . . . . . . . . 6–9

III. Case Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–10A. Chapter 7 to Chapter 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–10B. Chapter 13 to Chapter 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–11

IV. Hardship Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–12A. Statutory Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–12B. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–12C. Case Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–13

V. Meet-Me Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–13

VI. Attorney Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–14A. The Retainer Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–14B. Attorney Compensation and Disclosures . . . . . . . . . . . . . . . . . . . . . . . 6–14C. Itemized Statement/Billing Statement . . . . . . . . . . . . . . . . . . . . . . . . 6–15D. Initial Compensation Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–15E. Supplemental and Final Compensation . . . . . . . . . . . . . . . . . . . . . . . . 6–16F. Economic Impact Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–16

AppendixesA. LBF 1378, Notice of Motion for Hardship Discharge. . . . . . . . . . . . . . . . . 6–19B. Sample Motion for Hardship Discharge. . . . . . . . . . . . . . . . . . . . . . . . 6–21

6–ii

Chapter 6—Chapter 13 Potpourri

C. LBF 1305, Debtor’s Attorney’s Disclosure of Compensation and Any Employment Agreement, and Application for Compensation . . . . . . . . . . . 6–23

D. LBF 1307, Application by Debtor’s Attorney for Supplemental Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–25

Table of Contents (continued)

6–1


i. TAX iSSuES in ChAPTEr 13

A. The Three Amigos: Priority Taxes, Dischargeable Taxes, and nondischargeable, nonpriority Taxes

Chapter 13 debtors frequently have outstanding obligations to the taxing authorities. The taxing authorities for all potentially appli-cable jurisdictions should be notified as potential creditors of the bank-ruptcy case; at a minimum, the Internal Revenue Service and Oregon Department of Revenue should receive notice of the case. While the applicable claims bar date does apply to the taxing authorities (but they do get 180 days after the order for relief to file claims), it is important to ensure that notice of the case is proper. The safest course of action is to provide notice as required for service under FRBP 7004. Under FRBP 7004(i), the Internal Revenue Service should be provided notice at the following addresses: 1. Internal Revenue Service, Centralized Insolvency Opera-tion, P.O. Box 7346, Philadelphia, PA 19101-7346; 2. IRS, By Eric Holder, Attorney General, 10th Constitution NW #4400, Washington, DC 20530; and 3. IRS, By S. Amanda Marshall, US. Attorney, 1000 SW 3rd Ave Suite 600, Portland, OR 97204-2936. Under FRBP 7004(j)(2), the Oregon Department of Revenue should be provided notice at the following addresses: 1. ODR, Attn: Bankruptcy Unit, 955 Center St NE, Salem, OR 97301; and 2. ODR; c/o John Kroger, Attorney General, Oregon Depart-ment of Justice, 1162 Court St NE, Salem, OR 97301-4096. It is also important to note that various divisions of the Oregon Department of Revenue may have separate addresses. Further, when the Oregon Department of Revenue is acting as the collection agent for another agency, notice must be provided to both the Oregon Depart-ment of Revenue and the originating agency.1

Unsecured tax obligations come in three varieties: (1) priority, (2) dischargeable, and (3) nondischargeable, nonpriority. For income taxes to be priority taxes, the following conditions must be met: (1) the tax return must have been last due, including extensions, less than three years before the date of filing, and (2) the tax must have been assessed less than 240 days before the date of filing, plus additional amounts of time if there were periods in which the Internal Revenue Service was prohibited from engaging in collection activities, either because of an offer in compromise or the automatic stay. 11 U.S.C. § 507(a)(8). If income taxes do not qualify as priority taxes, they are discharge-able if the returns have been filed more than two years before the date of the petition. The current position of the Internal Revenue Services is

1 In some cases, the State of Oregon has taken the position that despite notice provided to the Center Street addresses, the failure to send notice to the applicable di-vision (e.g., Unemployment Division) was sufficient to give rise to a nondischargeable debt under Section 523(a)(3).

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that returns prepared by the Service under I.R.C. § 6020(b) (substitutes for return (“SFR”)) are not returns for purposes of dischargeability. If tax obligations are priority claims, they must be paid in the Chapter 13 case. The Chapter 13 plan must provide for payment in full of all priority unsecured claims, including priority taxes. Section 1322(a)(2). If tax obligations are nonpriority but dischargeable, the taxing au-thority is treated as a general unsecured creditor and discharged at case completion. The worst category of taxes is nonpriority, nondischarge-able taxes—they not paid as priority debts nor are they discharged. Adding insult to injury, post-petition interest continues to accrue. In general, interest follows the underlying tax. If the underlying tax is given priority status, interest through the petition will also be giv-en priority status. Penalties through the petition date are generally dis-chargeable. During a Chapter 13 bankruptcy, so long as the debtor pays the priority claim in full (both underlying tax and interest through the petition date), interest that would have accrued during the pendency of the case is discharged except if the tax return giving rise to the under-lying tax liability was late-filed; in that situation, post-petition interest continues to accrue, and the interest is not discharged.

B. Tax Claims in Bankruptcy

If a debtor files Chapter 13 and has unfiled tax returns, the In-ternal Revenue Service will file an estimated claim (based on the re-ported income, if any, using a single filing status and no deductions). The Service will also send out a form letter requesting returns within 14 days. ODR will file a statement with the court stating that there are unfiled returns. Since the debtor is obligated to have filed tax returns for the four years prior to filing under Section 1308, it is important that debtors move quickly to prepare their returns. In general, the Service is quite amenable to debtors taking additional time to prepare their re-turns. However, once the confirmation hearing rolls around, the court takes a more aggressive approach. If the debtor has not filed required returns by the time of confirmation hearing, the court generally enters short-term orders requiring compliance with Section 1308; noncompli-ance typically results in dismissal or conversion of the case. For the IRS, if allowed, the returns should be electronically filed and a copy of the complete return should be provided to the insolvency specialist who filed the estimated proof of claim. If the returns are for prior years, electronic filing is generally not available; in that case, the original signed return should be provided to the insolvency specialist. For ODR, there is not a separate filing procedure; returns should be filed pursuant to the instructions on the return instructions if not filed electronically. In general, neither the IRS nor ODR will quickly file withdraw-als of their objections arising from unfiled tax returns; if the Bankruptcy Court has entered a “tax order” requiring the filing by a date certain, the IRS or ODR may not even be aware of the issue. In those circumstances, debtor’s counsel should file a tax certification with the Bankruptcy Court;

6–3


the certification should state that the debtor’s attorney certifies that the returns were filed with the appropriate taxing authorities and provide name(s) of the taxing authorities, year(s) filed, and whether there was a liability or refund. This certification requires personal knowledge that the returns were filed; the attorney’s certification that the debtor said the returns were filed is insufficient. Once actual returns are filed, each taxing authorities will file amended claims to correct any estimates. The IRS generally quickly files an amended claim that reflects the return as filed; if adjustments are made to the return, the IRS will file a further amended claim.

C. Tax Liens

Both the Internal Revenue Service and the Oregon Department of Revenue may assert secured claims in bankruptcy, and such secured claims may be treated as if any other secured creditor. Each properly re-corded notice of federal tax lien (“Notice”) gives the IRS a perfected fed-eral tax lien in collateral for the referenced tax years just like a properly recorded trust deed gives a mortgage creditor a perfected lien in col-lateral for the referenced obligation. Under I.R.C. § 6323, the IRS must record in the county recorder office to perfect an interest in real property and must record in the Secretary of State’s UCC filings to perfect an in-terest in personal property. Outside of bankruptcy, the tax lien extends through after-acquired property. Glass City Bank v. United States, 326 U.S. 265, 268 (U.S. 1945). ODR liens (distraint warrant) are recorded against real property but do not attach to personal property. ODR liens do not impair Oregon exemptions; however, an IRS lien does not take account of state exemptions under the Supremacy Clause. U.S. Const. Art. VI, § 2, but see 26 U.S.C. § 6334 (property exempt from tax liens). In a Chapter 13 case, a tax lien can be avoided to the extent that the value of the property to which the lien attaches is less than the amount of the tax claim. See, e.g., In re Hendrix, 179 B.R. 519 (Bankr. E.D. Ky. 1994); In re Butler, 139 B.R. 258 (Bankr. E.D. Okla. 1992). However, the IRS has contested use of the court’s local bankruptcy form regard-ing stripping wholly unsecured liens; practitioners are advised to seek leave of the Bankruptcy Court to file their own motion not using the lo-cal form. Counsel for the Oregon Department of Revenue has expressed similar concerns. Coordination with priority claims can be difficult at best. These issues are frequently avoided because the taxing authority (usually the IRS) has filed liens on older (nonpriority) obligations but has not yet filed liens on more recent (priority) obligations. To the extent that there is overlap, the taxing authorities are generally allowed to allocate pay-ments on claims to secured and priority amounts to maximize their claim. In re Junes, 76 B.R. 795 (Bankr. D. Or. 1987), aff’d 99 B.R. 978 (9th Cir. BAP 1989). As a result, a Chapter 13 plan must generally provide for both payment of the secured claim and payment of priority taxes despite any potential overlap.

6–4


D. Determination of Tax Liabilities—Section 505

One of the most underutilized provisions available to the Chap-ter 13 debtor is Section 505. This section allows the Bankruptcy Court to determine any unpaid liability of the debtor that has not been previ-ously contested or adjudicated before another court (excepting property taxes). The Bankruptcy Court, along with the United States Tax Court, provide the main venues for determination of tax liabilities without running into the “full payment rule,” which generally requires that the taxes asserted by the Service to be due be paid in full before a suit for refund may brought. Such refund suits may be brought in either the District Court or Court of Federal Claims. 28 U.S.C. § 1346(a)(1). Since determination of tax is not listed under Rule 7001 as requiring an adver-sary proceeding, it is initiated by the filing of a motion with the court. One potential use of Section 505 is to create secured or priority taxes that may be paid in the Chapter 13 case when the debtor or prop-erty of the estate is liable for such tax, but it has not been assessed or asserted. This can be done for trust fund recovery penalty (TFRP) taxes; in most cases, the IRS won’t make a TFRP assessment until the liability (including interest and penalties) is in excess a certain threshold. If a debtor owes less than the threshold in TFRP and his or her Chapter 13 case is such that there will be disposable income to pay such amount, a Section 505 action may be appropriate to assert such liability. The TFRP threshold may be approximately $20,000; however, the number of po-tential “responsible parties” affects the amount of the threshold, and the IRS does not disclose these guidelines. For example, Debtor was the 100% owner of a corporation. The corporation failed to pay over withholding taxes to the IRS. The cur-rent, potential TFRP liability is $18,000, but TFRP assessment has been made. If Debtor files Chapter 13, the potential TFRP liability would not be a claim that the IRS could assert against Debtor; however, since TFRP liability is based on withholdings, it is not dischargeable. As interest ac-crues, the IRS could make an assessment against debtor post-petition—this post-petition assessment would not be paid through the plan. If Debtor’s plan had a high distribution to general unsecured creditors, the addition of a priority creditor to pay this liability in full would allow Debtor to avoid any further risk on the TFRP liability. The same goes for a pre-petition transfer of assets encumbered by a tax lien; if the IRS does not assert a secured claim with respect to its lien on those assets, Section 505 can be used to make a determination on the extent of the secured status. For example, Debtor was the owner of a corporation. The corpo-ration failed to pay certain taxes and a tax lien was imposed against its assets. Debtor is going to file Chapter 13 and wants to acquire the cor-porate assets to continue business post-petition as a self-employed in-dividual. Debtor can acquire the assets, subject to the lien (see 11 U.S.C. § 6323(i)(1)), and pay the lien as a secured claim to the extent of the val-ue of the collateral (i.e., ¶ 2(b)(1) cram-down). However, the IRS tracks liability and tax liens based on the taxpayer identification number; the

6–5


lien and liability would be shown in the corporation’s business master file (BMF) but not Debtor’s individual master file (IMF). In this situa-tion, it may be possible to work with the Insolvency Group to have the proper liability transferred between the respective master files. In some situations, it may be necessary to use either Section 505 to assess liabil-ity for tax against property of the estate or an adversary proceeding to determine the extent, priority, or validity of liens. Another potential use of Section 505 is quick resolution of bona fide tax disputes resulting from audits or other reviews of the debtor’s taxes without full payment of the asserted deficiency. Such matters could be determined by the United State Tax Court (if relief from the automatic stay is obtained (Section 362(a)(8)), but the Tax Court only holds court in Portland on an annual basis (one regular docket and one “small case” docket). The Bankruptcy Court’s determination may speed determination of the liability.

E. Post-Petition Tax Liabilities

The bankruptcy estate created when an individual files for relief under Chapter 7 or 11 of the Bankruptcy Code is treated as a separate, taxable entity; however, the bankruptcy estate created in Chapter 13 is not a separate entity. 26 U.S.C. § 1398. I.R.C. Section 1398 provides that a debtor may make an election to split the year into two taxable years. The most significant effect of the election is that the tax liability for the first short-year becomes an allowed claim afforded priority under Sec-tion 507(a)(8). However, since a separate taxable entity is not created, the Chapter 13 debtor cannot take advantage of the short-year election. The typical scenario that presents these issues is the debtor who has failed to make estimated tax payments or has under-withheld pre-petition to have cash flow to service various debts. A bankruptcy is filed late in the taxable year (i.e., December), and the debtor makes appropri-ate estimated tax payments or adjusts withholdings to the correct level and confirms a plan. Then, in the following April, the debtor receives a substantial post-petition tax bill for pre-petition conduct, but, since the tax year did not close until the end of the taxable year, this debt is treated as a post-petition debt. The first and most obvious solution would be to allow the taxing authority a claim for this debt as a priority debt; the Bankruptcy Code provides exactly that in Section 1305. However, while Section 1305 al-lows for payment of post-petition tax debts that arise during the course of the case, it is premised on the taxing authorities filing a proof of claim. Neither the Internal Revenue Service nor the Oregon Department of Revenue will file Section 1305 claims (except in extremely rare and ex-traordinary circumstances). Since the tax debt arose post-petition, collection against the prop-erty of debtor is not barred. Collection against property of the debtor is only barred for pre-petition debts. Cal. Franchise Tax Bd. v. Jones, 657 F.3d 921 (9th Cir. 2011). If confirmation vests the property of the estate back

6–6


to the Chapter 13 debtor, the taxing authorities may be free to levy the debtor’s property and/or income. Id. Two potential resolutions to this problem are to enter into a post-petition collection agreement with the appropriate taxing authorities and/or to control the vesting provisions by the plan. Both the IRS and ODR will enter into payment agreements on the post-petition tax debt; in general, this should be a reasonable and necessary expense for the debtor.

F. Taxing Authorities in the Bankruptcy Court

For the Internal Revenue Service, routine matters (e.g., 341(a) hearings and proofs of claim) are handled by the local Insolvency Group. Questions about the amount and character of a tax liability should be addressed to the appropriate Insolvency Group; personnel within a group are usually assigned to particular types of Title 11 cases. Cases are frequently subdivided alphabetically based upon the debtor’s name and upon the basis of the judicial district and division where they are filed. Objections to either plans or motions are generally handled by local Internal Revenue Service Office of Chief Counsel attorneys. In some circumstances, the Service will obtain additional assistance from Department of Justice Western Division tax attorneys. The Oregon Department of Revenue has its own bankruptcy spe-cialists; likewise, questions about proofs of claim should be addressed to the filer of the proof of claim. The Oregon Department of Revenue uti-lizes the Department of Justice for its representation in the Bankruptcy Court.

G. Post-Discharge Satisfaction of Liens

After the entry of the debtor’s discharge (both in Chapter 7 and Chapter 13), it is important to ensure that previously filed tax liens are released and dischargeable taxes are discharged. This process is some-times complicated by the fact that entry of the discharge removes both the attorney of record designation and transfers the case out of the lo-cal Insolvency Group. Instead of dealing with the local IRS specialists based on your representation of your client, you are now dealing with Centralized Insolvency and must have a valid power of attorney (Form 2848). Generally, release of liens and discharge of taxes is accomplished with 30 days of the entry of discharge; practitioners should check their clients’ tax transcripts 30 to 45 days after entry of discharge to ensure release and discharge. If the taxes have not been discharged or liens have not been released, contacting Centralized Insolvency Operations at (800) 973-0424 is the easiest and most effective course of action.

h. revising Estimated Tax Withholdings

The events leading to the filing of a bankruptcy case and the sub-sequent bankruptcy case may result in significant tax changes for debt-ors. While it is not always possible to avoid post-petition tax liabilities (see Section E above), demonstrating that post-petition liabilities are a result of pre-petition conduct and that the circumstances giving risk to

6–7


that liability has been remedied will enable debtor’s counsel to refute a taxing authority’s motion to dismiss. Pre-bankruptcy, debtors may have reduced their withholdings to provide more funds in their pay-checks to have funds to service debt. Post-bankruptcy, debtors may no longer have certain deductions (i.e., the home mortgage interest deduc-tions on a second mortgage or certain interest deductions on business obligations). Prior to filing, debtors should review their withholdings and/or amounts of estimated tax payments to ensure that post-petition taxes will be paid in full (and without an excessive refund). Schedules I and J should reflect these accurate withholding calculations so that Schedules I and J reflect the debtor’s situation for the case. For federal withholding, the Internal Revenue Service has a with-holding calculator available online at http://www.irs.gov/individu-als/article/0,,id=96196,00.html. For Oregon withholding, the Oregon Department of Revenue has an online guide (available at http://www.oregon.gov/DOR/bus/docs/206-643.pdf?ga=t).

ii. SErViCE (FrBP 7004)

“Attorneys practicing in the bankruptcy courts are expected to know the rules regarding service.” Cartage Pac. v. Waldner (In re Wald-ner), 183 B.R. 879 (9th Cir. BAP 1995). Service of process (“service”) is the procedure employed to give sufficient notice to a person or entity so that the respondent is able to respond and that the court may exercise jurisdiction over that person. Depending on the context, the underlying rationales may be different,2 but the procedural requirements for effective service are stated in Fed-eral Rule of Bankruptcy Procedure 7004. Rule 7004 does not only apply in adversary proceedings; it is also made applicable to the initiation of a contested matter. Fed. R. Bankr. P. 9014(b). Any proceeding that affects the rights of another party and that those fall within the list of adversary proceedings (Rule 7001) should be considered a contested matter. “In a contested matter, there is no summons and complaint, pleading rules are relaxed, counterclaims and third-party practice do not apply, and much pre-trial procedure is either foreshortened or dispensed with in the interest of time and simplicity. Nevertheless, . . . discovery is available, testimony regarding contested material factual disputes must be taken in the same manner as in an adversary proceeding, and the court must make findings of fact and conclusions of law before entering an order that has the status of a judg-ment.” Khachikyan v. Hahn (In re Khachikyan), 335 B.R. 121 (9th Cir. BAP 2005).

2 In diversity jurisdiction, the Fourteenth Amendment’s due process analy-sis controls, but in federal question jurisdiction, the Fifth Amendment’s due process analysis controls; “the concepts of ‘notice’ and ‘fair warning’ that have been the touch-stone of the Fourteenth Amendment due process” is rarely acknowledged in the Fifth Amendment analysis. Gardina, Jackie. The Bankruptcy of Due Process. ABI Law Review Vol. 16, p. 45 (discussing service of process, jurisdiction, and the Bankruptcy Code).

http://www.irs.gov/individuals/article/0,,id=96196,00.html

http://www.irs.gov/individuals/article/0,,id=96196,00.html

http://www.oregon.gov/DOR/bus/docs/206-643.pdf?ga=t

http://www.oregon.gov/DOR/bus/docs/206-643.pdf?ga=t

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In Chapter 13 cases, the confirmation of a Chapter 13 plan is a contested matter. Creditors named in the plan in Paragraphs 2(b)(1), 2(b)(2), 2(b)(5) (potentially), 3, 6(a), and 6(b) are all creditors whose rights are being sought to be changed by confirmation of the plan. In addi-tion, any creditors that are going to be affected by additional paragraphs added to the standard plan by the debtor’s use of Section 1322 should also be included in the service list. While failing to provide notice to a party is a serious problem (as seen below), providing notice to “too many” parties is impossible.

A. how to Serve Pursuant to 7004

Unlike the prototypical initiation of litigation in state courts, ser-vice under the Bankruptcy Rules does not require personal service—Rule 7004(b) allows for service “within the United States by first class mail postage prepaid” (regular stamped mail) for many creditors. Some parties require more than regular mail (notably, FDIC-insured institu-tions require certified mail addressed to an “officer of the institution”), and most parties must be served at a particular address (which may be different than their “regular” address). Only some of the service rules are discussed here; a thorough reading of Rule 7004 is strongly recommended.

1. individuals. “[O]ther than an infant or incompetent, by mailing a copy of the summons and complaint to the individual’s dwell-ing house or usual place of abode or to the place where the individual regularly conducts a business or profession.” FRBP 7004(b)(1). When the individual sought to be served is the debtor, Rule 7004(b)(9) also comes into play (requiring service on the debtor at the address listed in the pe-tition), and Rule 7004(g) may also come into play (requiring service on debtor’s counsel if the debtor is represented). See, e.g. In re Bloomingdale, 137 B.R. 351 (Bankr. C. D. Cal. 1991) (dismissing complaint to determine dischargeability of debt because plaintiff-creditor failed to serve debt-or’s counsel resulting in failure of proper service to defendant-debtor; deadline to file complaint had expired).

2. Business Entities. “[B]y mailing a copy of the summons and complaint to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defen-dant.” FRBP 7004(b)(3). Since Rule 7004(b)(3) requires that service by first-class mail be addressed to “to the attention of an officer, managing or general agent, or . . . any other agent authorized by appointment or by law,” the failure address the service of process to such attention means that service is void because it was defective. Sun Healthcare Group, Inc. v. Mead Johnson Nutritional, 2004 Bankr. LEXIS 572 (Bankr. D. Del. April 30, 2004) (setting aside default judgments and dismissing underlying complaints because plaintiff-debtors failed to address service to the at-tention of any officer or managing or general agent of the company).

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Oregon maintains a searchable database of businesses autho-rized to do business in the state at http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.login; nearly every other state’s Secretary of State website has a similar function. These databases will show the current registered agent for the entity; Oregon law allows for service on the reg-istered agent. ORCP 4D(3)(b)(i).

3. The united States of America. “[B]y mailing a copy of the summons and complaint addressed to the civil process clerk at the office of the United States attorney for the district in which the action is brought and by mailing a copy of the summons and complaint to the At-torney General of the United States at Washington, District of Columbia, and in any action attacking the validity of an order of an officer or an agency of the United States not made a party, by also mailing a copy of the summons and complaint to that officer or agency.” FRBP 7004(b)(4).

4. insured Depository institutions. “[B]y certified mail ad-dressed to an officer of the institution.” FRBP 7004(h). This type of service is restricted by the Rules to “insured depository institution as defined in the Federal Deposit Insurance Act (“any bank or savings association the deposits of which are insured by the Corporation pursuant to this Act”); while credit unions are not “insured depository institutions” as defined (credit union deposits are insured by the National Credit Union Share Insurance Fund (NCUSIF) administered by the National Credit Union Administration (NCUA)), the Bankruptcy Court has generally required service on credit unions to be made pursuant to the requirements of Rule 7004(h). Entities insured by the FDIC can be found at http://www2.fdic.gov/idasp/main.asp. It should be noted that some subsidiaries of na-tional creditors can be FDIC-insured. For example, FIA Card Services, N.A., (formerly MBNA America Bank, N.A.) which handles consumer credit cards, is an FDIC-insured institution. The FDIC will frequently provide the mailing address for the institution; the institution’s website, Google Finance (finance.google.com), or other finance reporting can provide officers.

B. how to Demonstrate Compliance with 7004

The Chapter 13 plan is sent to all creditors at the address pro-vided for in the debtor’s schedules and included in the mailing matrix. However, creditors that are specifically affected by the plan should be listed (name, address, and manner of service) with the service certifica-tion of the plan. While the service certification block requires certifica-tion that the mailing matrix lists parties with “in care of a person or entity authorized to be served,” the practice in Oregon is that all credi-tors required to be served with the Chapter 13 plan (those parties listed in Paragraphs 2(b)(1), 2(b)(2), 2(b)(5) (potentially), 3, 6(a), and 6(b)) be listed at the service address below the certification. As a result, all creditors listed in the plan should be listed below the service certification with a description of the method of service.

http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.login

http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.login

http://www2.fdic.gov/idasp/main.asp

http://www2.fdic.gov/idasp/main.asp

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iii. CASE COnVErSiOn

A. Chapter 7 to Chapter 13

Section 706(a) allows a debtor to convert his or her case if com-menced under Chapter 7 and the case has not previously been convert-ed. 11 U.S.C. § 706. Conversions to Chapter 13 may only be done at the request of the debtor (since it is a voluntary chapter) and only if the debtor is eligible to be a Chapter 13 debtor. 11 U.S.C. § 706(c), (d). Despite the language of Section 706(a), the debtor’s right to con-vert from Chapter 7 to Chapter 13 is not absolute. Marrama decided the narrow procedural issue of whether a debtor had “an absolute right to convert at least one Chapter 7 proceeding into a Chapter 13 case even though the case will thereafter be dismissed or immediately returned to Chapter 7.” Marrama v. Citizens Bank of Mass., 549 U.S. 365, 368 (2006). The Court based this decision on the Bankruptcy Court’s equitable pow-ers under Section 105 as authorizing the Court to issue “an immediate denial of a motion to convert filed under § 706 in lieu of a conversion order that merely postpones the allowance of equivalent relief. . . .” Id. at 375; see also In re 10 Bears at Chiloquin, Inc., 2007 Bankr. LEXIS 1997, *6 (Bankr. D. Or. 2007) (noting the same). Marrama permits conversion of a case except for the atypical debtor who could not confirm a plan because of the good faith requirement; in that exceptional situation, a court is not required to allow an “unmeritorious attempt” to qualify as a debtor under the desired chapter. Marrama at 376. The prototypical case where conversion is denied on the basis of Marrama is where a debtor seeks to conceal assets and, upon discovery, seeks to convert the case to Chapter 13 to either pay creditors the value of the discovered property in reorga-nization or have time to dissipate those assets prior to reconversion to Chapter 7 or dismissal. With respect to “good faith,” the Supreme Court has “empha-sized” that, to support a finding of bad faith, the debtor’s conduct must have been “atypical,” and the case must be “extraordinary,” but the Court declined to “articulate with precision what conduct qualifies as ‘bad faith.’ ” Marrama, 549 U.S. at 375, n.11. Courts have wide discretion on the factors to consider, including looking at the timing of the motion to convert, the motive for conversion, the debtor’s candor, the prospects for a feasible plan, the relative impacts on the debtor and creditors, ef-ficient administration of the bankruptcy estate, and whether conversion would further an abuse of the bankruptcy process. In a Chapter 13, the primary factors utilized in evaluating bad faith are the four Leavitt factors, used in assessing the “totality of the circumstances”:

(1) whether the debtor misrepresented facts in his [petition or] plan, unfairly manipulated the Bankruptcy Code, or otherwise [filed] his Chapter 13 [petition or] plan in an inequitable manner;

(2) the debtor’s history of filings and dismissals;

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(3) whether the debtor only intended to defeat state court litigation; and

(4) whether egregious behavior is present.

In re Leavitt, 171 F.3d 1219, 1124 (9th Cir. 1999) (internal quotation marks and citations omitted). In the Chapter 11 content, this court has refined these factors into a more simple inquiry: “whether a debtor is attempt-ing to unreasonably deter and harass creditors or attempting to effect a speedy, efficient reorganization on a feasible basis.” 10 Bears, 2007 Bankr. LEXIS 1997, *7 (citing In re Arnold, 806 F.2d 937, 939 (9th Cir. 1986)). Case conversion under Section 706(a) (statutory conversion) is not a contested matter and therefore must be initiated by motion. Rule 1017(f)(2). However, post-Marrama, even Section 706(a) conversions may be considered contested matters under Rule 1017(f)(1) since a Chapter 7 debtor does not have an absolute right to convert to Chapter 13. The general language of the motion is straightforward—a motion containing the following is generally sufficient to obtain an order con-verting the case: “Debtor(s) moves the Court for an Order converting his case from a Chapter 7 to a Chapter 13. This case was originally filed as a Chapter 7 on [Petition Date] and has not been previously converted from that Chapter to any other Chapter.”

B. Chapter 13 to Chapter 7

A fundamental premise of Chapter 13 is that it is voluntary on the part of the debtor: only the debtor may commence a Chapter 13 case (Section 303(a)), only the debtor may convert a case into Chapter 13 (Sec-tion 706(c)), only the debtor may file a plan (Section 1321, but see Section 1329(a)), and the Chapter 13 debtor has an absolute right to dismiss or convert the case (Section 1307). Since there are no preconditions on the Chapter 13 debtor’s right to convert to Chapter 7 (other than those listed in Section 1307), no mo-tion is required. Rule 1017(f)(3). The debtor may file either a notice of conversion to Chapter 7 or a motion to convert to Chapter 7 along with an appropriate order. It should be noted that the debtor must be eligible for a Chapter 7 discharge to receive a Chapter 7 discharge. While the statutory language also contains no preconditions for dismissal for a Chapter 13 case, the Ninth Circuit has found that the right to dismiss was “qualified by an implied exception for bad-faith conduct or abuse of the bankruptcy process.” Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764 (9th Cir. 2008); the court’s decision was based in large part on the Supreme Court’s decision in Marrama, above. This decision also explicitly overruled the Bankruptcy Appellate Panel’s decision Beatty v. Traub (In re Beatty), 162 B.R. 853 (9th Cir. BAP 1994). The merits of the Rosson decision are debatable; for example, the Mar-rama Court’s decision was premised on the idea that Chapter 7 debtor would be unable to confirm a Chapter 13 plan due to the malfeasance and that conversion would only serve as a delay rather than an implied “good faith” exception to the conversion right. There is currently a split amongst the circuits as to the effect of Marrama on Chapter 13 conver-

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sion. See, e.g. Barbieri v. RAJ Acquisition Corp. (In re Barbieri), 199 F.3d 616, 619 (2d Cir. 1999) (holding that, at any time prior to an actual order of conversion, “a debtor has an absolute right to dismiss a Chapter 13 pe-tition under § 1307(b), subject only to the limitation explicitly stated in that provision”). Other parties, including the United States Trustee, Chapter 13 trustee, or creditors, can seek dismissal or conversion of the case as well (as well as conversion to Chapter 11 or 12) (with limitations for farmers (Section 1307(f)). As a result, for the bad-acting Chapter 13 debtor, the motion to dismiss is often greeted by a motion to convert to Chapter 7 filed by one of these parties, with the court making the determination as to good faith to determine the debtor’s fate. For conversion to Chapter 7, the debtor needs only file a notice of conversion. Rule 1017(f)(3). For other parties, a motion to convert under Section 1307(b) must be filed. Rule 1017(f)(2). Post-conversion, Rule 1019 directs that the new Chapter 7 debtor file a statement of intent, if required, within 30 days. A Chapter 7 trustee will be appointed and a new 341(a) hearing held. A new time period for dischargeability or denial of discharge is also started. Rule 1019(2)(A). New time periods for objections to exemptions are also initiated, with certain exceptions. Rule 1019(2)(A). The Chapter 13 debtor must also file supplemental schedules listing any debts incurred after case com-mencement and prior to conversion. Rule 1019(5)(B). These debts are discharged in the converted case. However, property of the estate is still determined by Section 541, which only includes property held at case commencement. As a result, a conversion from Chapter 13 to Chapter 7 will include post-petition debts in the scope of discharge, but the prop-erty of the estate will not include post-petition property.

iV. hArDShiP DiSChArGE

A. Statutory Definition

Section 1328(b) provides that “at any time after the confirmation of the plan and after notice and a hearing, the court may grant a dis-charge to a debtor that has not completed payments under the plan only if . . .”: 1. The debtor’s failure to complete payments under the plan is due to circumstances “for which the debtor should not justly be held accountable”; 2. The unsecured creditors have received not less than they would have received in a Chapter 7 liquidation; and 3. Modification of the plan under § 1329 “is not practicable.”

B. Procedure

A debtor initiates discharge before completion of plan payments by filing: 1. Notice of motion for hardship discharge (LBF 1378); 2. Motion: a. Stating each element;

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b. Providing factual support showing how each element is satisfied; and c. Requesting the court to enter order of discharge; and 3. Affidavit or declaration in support of motion. Examples of a notice and motion for hardship discharge are at-tached as Appendixes A and B.

C. Case Examples

1. In re Schmitt, No. 09-02238, 2011 WL 5024232 (Bankr. N.D. Iowa Oct. 20, 2011) (involuntary employment termination and inability to find another job were circumstances for which debtor was not ac-countable; over objection of trustee, hardship discharge granted except for student loan debt). 2. In re Elvira, No. 05-81841-G3-13, 2009 WL 4824001 (Bankr. S.D. Tex. Dec. 9, 2009) (hardship discharge denied when plan was pre-mised on sale or refinancing of home and debtors’ inability to complete plan was not due to any change in circumstances during case). 3. In re Ward, No. 09-13094, 2011 WL 6148600 (Bankr. D.R.I. Dec. 9, 2011) (deteriorating health and inability to work that resulted in substantial loss of income were circumstances likely to continue that rendered modification of confirmed plan impracticable and supported hardship discharge). 4. In re Edwards, 207 B.R. 728, 731 (Bankr. N.D. Fla. 1997) (hardship discharge granted to a debtor whose business failed 30 months after confirmation, who testified that he suffered depression requiring medication, suffered the breakup of his marriage, and searched exten-sively for new employment, and when he found a new job, his new income left no disposable income to fund a plan.).

V. MEET-ME hEArinGS

The Bankruptcy Court schedules a number of Chapter 13 hear-ings as telephonic “meet-me” hearings. These hearings are typically preliminary hearings or hearings where no evidence will be required. Telephonic hearings are utilized as a convenience to both attorneys and their clients, as it avoids travel time and repeated courtroom appearanc-es for quick hearings. Despite being held by telephone, these hearings are court proceedings and should be treated accordingly. The notice of hearing will contain the telephone number and a three-digit ID code for the hearing. The notice of hearing will also con-tain the following requirements for the hearing.

a. YOU MUST, NO LATER THAN the time set above, EITHER call the “MEET-ME” line using the instructions above for THIS hearing date, or personally appear in the judge’s courtroom. The court will NOT call the parties.

b. DO NOT USE a SPEAKER PHONE, CELL PHONE OR HEADSET! You may be asked to call from another telephone if your phone causes static or has excessive background noise, etc., or the signal is weak or drops.

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c. You must take all necessary steps to ELIMINATE BACKGROUND NOISE, such as shutting the door, turn-ing off music, not putting the court on hold if it will result in music or other noise, not talking to third parties, using a “Do Not Disturb” button so the telephone/intercom will not ring, positioning the telephone to minimize paper rus-tling, and keeping all nonparticipants in the room quiet.

d. DO NOT introduce yourself until the court calls your specific hearing. Simply stay on the line, even if there is only silence, until the judge appears, and then continue to listen quietly until your hearing is called.

e. Whenever speaking, you must first identify yourself.

f. DO NOT be late. The judge will handle late calls the same as (s)he would a late appearance in court. If the case has already been called, the judge will likely decline to revisit any decision that was made when the case was called. Failure of the movant/plaintiff to appear at the scheduled time may result in denial of the relief requested, and failure of the respondent/defendant may result in the court granting the relief requested.

In general, compliance with these requirements is straightfor-ward and generally observed.

prACtiCe tip: If your phone is equipped with a “mute” but-ton, keep the phone on mute until your hearing is called. Remember to unmute yourself.

prACtiCe tip: Put up a sign letting your coworkers know that you are appearing in a court hearing to remind col-leagues that you are, in fact, in court.

Vi. ATTOrnEy FEES

A. The retainer Agreement

Just as in Chapter 7, the Chapter 13 debtor’s attorney must have a written agreement with the debtor with respect to the debtor’s services. 11 U.S.C. § 528. In addition, the attorney must provide the required dis-closures. 11 U.S.C. § 527.

B. Attorney Compensation and Disclosures

There are three primary places where attorney fees must be disclosed: 1. The attorney fee disclosure (LBF 1305 for Chapter 13), which requires attachment of the employment agreement (see Appen-dix C). 2. The plan (LBF 1300.05); and 3. The order confirming plan. The disclosures in all three of these documents must be consistent.

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The attorney fees disclosed in the attorney fee disclosure and the plan are used to determine whether the plan, as drafted, is feasible. There are three primary “schedules” of fee payments correspond-ing to three general categories of compensation. Schedule 1 is for pay-ment of flat-fee compensation for the duration of the entire case (except appeals and adversary proceedings); in a Schedule 1 compensation case, no additional compensation will be granted, and the maximum com-pensation is $4,500 (a “no look” fee). Schedule 2 is for either flat fee through confirmation only or hourly billing. The flat fee cannot exceed $3,250; this is also a “no-look” fee. If the hourly estimated fees are in ex-cess of $3,250, an itemized billing statement must be filed with the court; the requirements for the billing statement are discussed below. When the order confirming plan (“OCP”) is submitted to the court, it includes an award of attorney fees. Until entry of the OCP, the trustee will not pay compensation to the attorney. Schedule 3 compensation is for substitute or new counsel joining the case, generally post-confirmation.

C. itemized Statement/Billing Statement

In general, LBR 2016-1 governs the form of the itemized state-ment or billing statement (used interchangeably). Strict compliance with these rules is required; the court reviews billing statements. Some of the requirements that are the most surprising to nonbankruptcy prac-titioners include the requirements regarding no minimum billing incre-ments in excess of .1 (six minutes) and the restriction on travel compen-sation (travel time is allowed at one-half hourly rate unless the applicant worked on the matter while traveling). The Local Rules no longer require that post-confirmation ser-vices be categorized; however, categorization in general categories may be helpful to both the court and the attorney to allow easy determi-nation as to the reasons a specific case reached a certain level of total compensation. The billing statement must include both the debtor’s name and debtor’s case number. Billing statements should be reviewed for privi-leged information before upload to the Bankruptcy Court via ECF.

D. initial Compensation Award

There are currently differences between Portland and Eugene re-garding how attorney fees are handled with respect to hourly fees in excess of the “no-look” amounts set forth in the attorney fee disclosure.

1. Portland. In Portland, for other than “no-look” fees, the estimated attorney fees set forth in the attorney fee disclosure and plan limit the amount of fees that may be awarded at confirmation. The bill-ing statement may be run through a date certain (typically the end of a calendar month) that cuts off pre-confirmation but does not exceed the amount of estimated attorney fees. The court will approve attorney fees through that date so long as the fees are both less than the estimated fees disclosed and otherwise allowable attorney fees.

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Attorney fees for after this date may be sought via supplemental compensation applications (discussed below). Under this system, only actual attorney fees are awarded at confirmation, but the fees awarded are through a date certain pre-confirmation.

2. Eugene. In Eugene, for other than “no-look” fees, the es-timated attorney fees set forth in the attorney fee disclosure and plan limit the amount of fees that may be awarded for any services rendered pre-confirmation. The billing statement must be run through the con-firmation hearing. Since the billing statement must be filed with the Bankruptcy Court 10 days prior to the confirmation hearing, the bill-ing statement must include estimated fees for those 10 days. Since no further pre-confirmation services are compensable after confirmation, this estimation should include legal services likely to be rendered in a contested confirmation. Likewise, the estimated attorney fees disclosed in the attorney fee disclosure and the plan are limits on the total pre-confirmation compensation; when drafting and filing plans in Eugene, hourly practitioners should consider the risks of a contested confirma-tion and the attendant costs; if attorney fees exceed the estimated fees disclosed at case commencement, either an amended plan must be filed or the fees in excess of the estimated fees waived.

E. Supplemental and Final Compensation

All Schedule 2 (and potentially Schedule 3) compensation in-cludes hourly billing for post-confirmation services. Attorneys may file applications for supplemental compensation no more often than every six months, and the application must be for more than $500. Supplemen-tal compensation applications must be filed using LBF 1307 and include a copy of the billing statement for the period for which fees are sought; a copy of LBF 1307 is attached as Appendix D. The final compensation request is filed using the same form; the frequency and amount restrictions do not apply. In a final compensa-tion request, the attorney is allowed to include “anticipated additional fees” to cover expenses incurred after the final application is mailed to creditors on notice. The trustee’s office should be provided an up-to-the-minute billing statement at case closing; the trustee will only pay those fees actually incurred except for post-case closing events necessary (in which case, estimated billing entries may be used).

F. Economic impact Statement

In some cases, the court may request that debtor’s counsel prepare and serve on the debtor an economic impact statement that describes the specific impact of the attorney fees on the debtor’s plan. These are more frequently requested in either “thin” cases (where increased attor-ney fees could jeopardize case completion) or where the compensation sought is a “large” amount in the court’s view. After filing the supplemental or final fee application, the court’s notice language at the top directing service of the application will in-clude the following additional paragraph: “(a) The applicant, not more

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than 21 days after the ‘FILED’ date, must file and serve on the debtor a statement regarding the economic impact of allowance of this applica-tion on creditors and the debtor.” The economic impact statement should be a brief statement re-garding the impact of the additional compensation on the duration of the case, whether additional funds will be required from the debtor, wheth-er payment(s) to creditors will be delayed, and whether payment(s) to creditors will be reduced. If an economic impact statement is required, debtor’s counsel must prepare and upload an order approving the sup-plemental compensation sought if no objections are received.

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APPEnDiX A—LBF 1378, nOTiCE OF MOTiOn FOr hArDShiP DiSChArGE


In re )) Case No.________________)) Notice of Motion for Hardship Discharge; Statement) Re 11 USC §522(q)(1) Applicability; and Fixing ) Times for Filing Objections, Complaints, and Motions

Debtor(s) )

1. The undersigned certifies the debtor(s) has not completed all plan payments, but instead filed the attachedmotion for a "hardship" discharge under either 11 USC §1328(b) if a Chapter 13 case, 11 USC §1228(b) if aChapter 12 case or 11 USC §1141(d)(5) if a Chapter 11 case, supported by affidavit(s)/declaration(s) executedby the debtor(s) under penalty of perjury, and demonstrating, when applicable, that: (1) the debtor's failure tocomplete the plan payments is due to circumstances for which the debtor(s) should not justly be held accountable,(2) unsecured creditors have received payments that equal or exceed the total payments which they would havereceived in a Chapter 7 liquidation, and (3) modification of the plan is not practicable.

1378 (8/8/08) Page 1 of 2 *** SEE NEXT PAGE ***

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2. The undersigned also certifies that there IS IS NOT (CHECK ONE) a pending proceeding in which thedebtor(s) may be found guilty of a felony or liable for a debt of a kind described in 11 USC §522(q)(1).

3. The name/service address for debtor copies are: __________________________________________________________________________________________________________________________________________

DATE: ___________ ___________________________________________________________Signature AND Debtor’s Taxpayer I.D.# (last 4 digits)

___________________________________________________________Debtor’s Address

STOP: BEFORE SERVING COPIES, FILE THE NOTICE AND ATTACHMENTS TO OBTAIN A JUDGE'SSIGNATURE!

CERTIFICATE OF SERVICE

I certify that on _________ copies of this motion and order thereon, any Notice of Hearing prepared by the courtper the judge’s order, and the debtor's motion and affidavit(s)/declaration(s), were served on the debtor(s), trustee,U.S. Trustee and all creditors.

__________________________________________________Signature & Relation to Debtor

IMPORTANT: After service, complete the “Certificate of Service” above using a copy of this document thatincludes the court’s order, and then promptly file the Certificate (WITHOUT any attachments).

1378 (8/8/08) Page 2 of 2

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APPEnDiX B—SAMPLE MOTiOn FOr hArDShiP DiSChArGE

Page 1 - Motion for Hardship Discharge

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UNITED STATES BANKRUPTCY COURT

DISTRICT OF OREGON

In Re:

Debtor(s).

)) Case No: )) MOTION FOR HARDSHIP DISCHARGE ))

Debtor, by and through undersigned counsel, requests that this Court enter an order

pursuant to 11 U.S.C. Section 1328(b) granting a Hardship Discharge in this Chapter 13 case.

Debtor represents as follows:

1. The debtor’s failure to complete plan payments is due to circumstances for which the

debtor should not justly be held accountable. The debtor has been diagnosed with a terminal

illness, and he is unable to return to work by Doctor’s orders.

2. The value, as of the effective date of the plan, of property actually distributed under

the plan on account of each allowed unsecured claim is not less than the amount that would have

been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this

titles on such date; and,

//

//

//

E. Clarke Balcom Clarke Balcom Law 1312 SW 16th Ave, 2nd Floor Portland, OR 97201 Telephone: (503) 224-5950 OSB #01195

Attorney For Debtors

Doc 40

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Page 2 - Motion for Hardship Discharge

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3. Modification of the plan under §1329 of this title is not practicable. The debtor’s sole

source of income is social security of $1,000 per month, and he is unable to work for regular

income or secure any other source of income sufficient to fund the plan.

Dated:_

/s/ E Clarke Balcom E. Clarke Balcom cc: Wayne Godare, Chapter 13 Trustee

Case Doc 40

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APPEnDiX C—LBF 1305, DEBTOr’S ATTOrnEy’S DiSCLOSurE OF COMPEnSATiOn AnD Any EMPLOyMEnT AGrEEMEnT, AnD APPLiCATiOn FOr COMPEnSATiOn


In re ) Case No. _________________)) [ONLY FOR CHAPTER 13 CASES]) DEBTOR'S ATTORNEY'S DISCLOSURE) OF COMPENSATION AND ANY ) EMPLOYMENT AGREEMENT, AND) APPLICATION FOR COMPENSATION,

Debtor(s) ) UNDER 11 USC §329 AND FRBP 2016(b)

Debtor's attorney discloses compensation paid or to be paid in the above referenced case. Debtor and debtor's attorney haveagreed to attorney compensation (i.e., both fees and costs), and HAVE HAVE NOT (MARK one) entered into an employmentagreement. A copy of the employment agreement, if any, is attached hereto.

The applicable schedule for the fee agreement between debtor and debtor's attorney is marked below [MARK ONE SCHEDULE].If Schedule 1 or Schedule 2 is marked, debtor(s), acting by and through the undersigned counsel, apply to the court for an orderauthorizing the compensation specified therein.

A total of $_________ has been paid to me within one year of filing by debtor other (specify)_________________________________________________________, and the balance of compensation will be paid through the plan as funds are available.

SCHEDULE 1: The total compensation request is $_________ ($4,500 maximum). This amount represents all compensationfor the ENTIRE LIFE OF THE CASE except for appeals or any adversary proceeding.

SCHEDULE 2: Debtor and debtor's attorney have agreed, regarding all services rendered THROUGH CONFIRMATION OFTHE PLAN PLUS THE INITIAL AUDIT OF CLAIMS, upon either (MARK one):

(a) a flat fee (i.e., requiring no itemization) of $_________ ($3,250 maximum); or(b) an estimated total fee of $_________. Time records must be kept for all work performed both "pre" and "post" petition.

Such records may be requested by the court at any time, and must show the time and rate applied to each servicerendered. If the estimated fee is $3,250 or greater, an itemized statement showing the time and hourly rate appliedto each service rendered must be filed with the court not less than one week prior to the final confirmation hearing.

Debtor and debtor’s attorney have agreed that post-confirmation services (after the initial audit of claims) will be charged asspecified in the attached agreement or, if there is no written agreement, as follows:

SCHEDULE 3: [COMPLETE ONLY IF FEE ARRANGEMENT HAS NOT BEEN PREVIOUSLY DISCLOSED - e.g., new orsubstitute counsel] Debtor and debtor’s attorney have agreed to the fee arrangements specified in the attached agreementor, if there is no written agreement, as follows:

[If the services specified in a previously submitted Schedule 1 or Schedule 2 (through confirmation and the initial audit ofclaims) were not completed] The debtor, the debtor’s former attorney, and the debtor’s current attorney have agreed to thefollowing with respect to the former attorney’s fees and will apply for any necessary court order for approval:

IMPORTANT:

1. No additional compensation requests will be granted if SCHEDULE 1 is selected, or after a final application is filed ifSCHEDULE 2 or SCHEDULE 3 is selected.

2. Supplemental applications for compensation: (a) may only be filed if SCHEDULE 2 or SCHEDULE 3 is selected; (b) will notbe considered unless the application is clearly marked as a final compensation application, or unless the supplementalcompensation requested is more than $500 AND at least 6 months have expired since the filing of the case or since the filingof any earlier application; AND (c) must be filed using LBF #1307, including an itemization of all services previously performedfor which no previous itemization and application has been filed.

I certify there is no agreement to share compensation with any other person, except with a regular member, partner, or associateof my attorney firm, except as follows (provide details):

I further certify that on ________ a copy of this document was served on the debtor(s), trustee, and U.S. Trustee.

DATED: ____________________________________________

1305 (4/15/09) Debtor's Attorney

6–24


6–25


APPEnDiX D—LBF 1307, APPLiCATiOn By DEBTOr’S ATTOrnEy FOr SuPPLEMEnTAL COMPEnSATiOn


In re )) Case No. _______________)) [ONLY FOR CHAPTER 13 CASES]) APPLICATION BY DEBTOR'S ATTORNEY

Debtor(s) ) FOR SUPPLEMENTAL COMPENSATION

I, the undersigned debtor's attorney, whose address and phone number are ______________________________________________________________________________________________, apply foradditional compensation from the debtor's estate for the period from __________ to __________ in thesum of $____________ (which is not less than $500 unless this is a final application, and which, if thisis a final application, includes $____________ in anticipated additional fees to complete the case), perthe attached itemized billing summary.

I CERTIFY THAT:

1. This (Check One) IS IS NOT my final application for compensation in this case.

2. I have previously been awarded a total of $____________. If granted, the total approvedcompensation amount will be $____________.

1307 (10/15/08) Page 1 of 2

6–26


3. My Disclosure of Compensation shows the debtor(s) and I agreed to Schedule 2.

4. My previous application for compensation (i.e., either the original compensation disclosure or asupplemental application) was filed on __________, which is more than six months from the date ofthis application unless this is my final application.

5. Allowance of this application will require that the distribution to creditors be reduced, thedebtor pay more, or a combination of the two. Even if the distribution to creditors is notreduced, payments to creditors may be delayed, sometimes for an extended period. If the debtormust pay more, the debtor will either be required to make additional or increased plan payments.If you want to know what impact the allowance of this fee application will have on you, you shouldcontact the attorney whose contact information is above. The attorney is required to explain theimpact on you of the allowance of the additional compensation within seven days after you requestthe information.

6. Applicant will file a modified plan within 28 days of allowance of the compensation requested inthis application if the allowance will otherwise require plan modification.

7. Applicant declares that, except as explained below, the minimum time billed is not in incrementsthat exceed .1 hour (6 minutes), and that any time spent working on multiple matters concurrentlyhas been allocated between those matters so that total billings do not exceed the actual time spent:

DATE: __________ _____________________________________Debtor's Attorney

STOP: BEFORE SERVING COPIES, FILE THE MOTION TO OBTAIN A JUDGE'S ORDER!

CERTIFICATE OF SERVICE

I certify that on ____________ a copy of this application and order thereon (without attachments unlessthe order requires service of an economic impact statement on the debtor), and any Notice of Hearingprepared by the court per the judge’s order, were served on the debtor, and, if amounts requested andanticipated exceed $1,000, on all creditors who filed claims and entities that filed a request to receive allcase notices.

_____________________________________________Signature & Relation to Applicant

1307 (10/15/08) Page 2 of 2

6–27


6–28


7–i

Chapter 7

PuTTinG iT ALL TOGEThEr: ChAPTEr 13 hyPOThETiCALS

douGlAs r. riCKs1


Ann K. ChApmAn


Table of Contents

1 The authors would like to thank Amy E. Sinclair, certified bankruptcy assistant with Vanden Bos & Chapman, LLP, for her contributions to these materials.

I. Part A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7–1

II. Part B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7–1

III. Part C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7–2

AppendixesA. Hypothetical Part A Forms and Calculations . . . . . . . . . . . . . . . . . . . . . . 7–5B. Hypothetical Part B Forms and Calculations . . . . . . . . . . . . . . . . . . . . . 7–39C. Hypothetical Part C Forms and Calculations . . . . . . . . . . . . . . . . . . . . . 7–61

7–ii

Chapter 7—Putting it All Together: Chapter 13 hypotheticals

7–1


i. PArT A

Isaac and Iris Gotdett come to see Alice Attorney on June 1, 2012, about their financial situation. Isaac and Iris were married in 2008. The Gotdetts own a home in Happy Valley, Oregon, which was purchased on July 20, 2010, when they moved from Centralia, Washington. The property is encumbered by a first mortgage and a home equity line of credit, which was used to remodel and add onto the home. The Got-detts say that the property is worth $350,000, that the balance on the first mortgage is $275,000 with a 5% interest rate, and that the balance on the line of credit is $150,000 with an 8.25% interest rate. Payments on the first mortgage are $1,454 per month, which includes taxes and insurance. Payments on the home equity line of credit are interest only at $1,031.25 per month. They state that they are current on the mortgage and line of credit payments. The Gotdetts have two vehicles—a 2005 Volvo V70 (purchased in 2004) and a 2009 Ford F250 pickup truck (purchased on May 2, 2010). The Volvo is owned free and clear, and the Ford is encumbered by a security interest held by Neighborhood Credit Union. The original loan from the Credit Union was for $42,000, which included $4,500 from a prior auto loan on a vehicle that was traded in. The current balance is $30,974, the interest rate on the loan is 6.99%, and payments are $715.66 per month. The Gotdetts have missed one payment to the Credit Union, and the next payment is due within a week. A quick online search provides an estimated value of $9,200 for the Volvo and $23,500 for the Ford. In addition to their secured debts, the Gotdetts owe $75,000 in credit card debt (none of which is owed to the Credit Union), $2,500 to the IRS for their 2011 taxes, and $1,000 to the State of Oregon for their 2011 taxes. The Gotdetts believe that all of their tax returns have been filed on time. None of the credit cards have been used recently, but the Gotdetts are more than 60 days in default on all of the accounts. No ar-rangements have been made with the IRS or the state for payment of the outstanding tax liabilities. Isaac is a self-employed carpenter, and Iris works part-time in sales and marketing for a large company. The Gotdetts have two de-pendents, a 12-year-old son and a 9-year-old son. In a brief review of their 2011 tax returns, Alice estimates that their combined gross income is $67,000 per year, of which $52,000 is Isaac’s earnings and $15,000 is Iris’s wages. Isaac mentions in passing that he has a couple of recently completed jobs that will pay him $10,000 total and that he really needs to hang onto the Ford truck for his business. What might Alice encounter in a Chapter 13 filing for the Gotdetts?

ii. PArT B

After the initial meeting with Alice, the Gotdetts return to her of-fice on June 22, 2012, with documents that Alice requested along with a signed fee agreement and the requested retainer. In reviewing the docu-ments, Alice notices several changes from her original analysis of the case. First, the Gotdetts appear to be two payments behind on their first

7–2


mortgage, with a total of $4,500 due to catch up the payments. Second, there is a notice of federal tax lien directed at Isaac for tax year 2006 in the amount of $11,200. Third, the Gotdetts obtained a market analysis on their home that shows a value between $271,500 and $302,500 for the property. Finally, after reviewing the Gotdetts’ income for the last six months, their average monthly gross income is $6,200 ($4,950 for Isaac and $1,250 for Iris), annualized to $74,400. A quick call to Isaac reveals that the couple made a late payment to the mortgage company, which was returned. They used the money to pay for a needed repair on the Volvo and haven’t been able to scrape together enough money to cure the mortgage payments and to fund the $2,500 cash reserve that Alice told them to set aside. Isaac indicates that he had no idea about the 2006 tax debt. He still believes the return was filed but concedes that he was going through a divorce at the time and could not really remember. Isaac then states that he is really worried about the tax lien because his accountant told him the IRS could take his retirement account. Isaac had rolled over $25,000 from a 401k with a previous employer into an IRA. Alice does an online search with the Oregon Secretary of State and finds out that the tax lien was recorded with that office on April 25, 2012. How does this change the Chapter 13 analysis for the Gotdetts? What additional information might be needed from the Gotdetts?

iii. PArT C

Alice receives three more documents from the Gotdetts on July 6, 2012. First, she receives a copy of Isaac and Iris’s credit reports. On it, Alice sees two accounts for YourToys Financing in Isaac’s name with balances of $4,500 each. Isaac indicates those were for the ATVs that he and Iris bought for the boys last Christmas. The Gotdetts didn’t think they had to list the ATVs as assets, as they belong to the kids. They fully intend to pay those debts, so they did not think the accounts needed to be included in the bankruptcy. Isaac and Iris are terrified of how the boys will react if the ATVs must be given back to YourToys Financ-ing. Each of the ATVs is worth $3,000, each has a payment of $164.93 per month at 18.99% interest for the next 30 months, and the loans are cross-collateralized. The next document Alice receives is a copy of the loan documents for the home equity line of credit. Apparently, the loan is set to mature on June 15, 2014; at which point, a balloon payment for the remaining debt is due. Isaac and Iris had no idea that this was the case, as they thought it was a 30-year loan. The Gotdetts doubt that the property could be re-financed by the time the loan matures to pay off the line of credit. Finally, Alice receives a copy of Isaac’s 2007 divorce decree. In reviewing the decree, Alice notices that there is a equalizing judgment in favor of Isaac’s ex-wife for $120,000. In addition, Isaac’s ex-wife is obli-gated to pay him $500 per month in child support. Alice frantically calls Isaac about this issue, and Isaac explains that it was based on his former residence in Washington. At the time of the divorce, the property was

7–3


valued at $425,000 with mortgage debt of $155,000. Isaac was to sell or refinance the property by December 31, 2007, and if he was unable to do so, the judgment would begin accruing interest at 9%. Isaac was unable to sell the property until 2010, when he and Iris moved to Oregon. The property sold for $210,000, which paid off the mortgage and provided a payment of $20,000 to Isaac’s ex-wife. The remaining proceeds were used by the Gotdetts to cover moving costs and start Isaac’s business in Oregon. Isaac says that is funny that this issue came up because he just got a letter from his ex-wife demanding payment of $132,400 on the judgment within 30 days or she intends to garnish his bank accounts. Isaac asks if she can really do that, as he thought the home sale had com-pleted everything he had to do in the divorce. What now?

7–4


7–5


APPEnDiX A—hyPOThETiCAL PArT A FOrMS AnD CALCuLATiOnS














Goldett, IsaacGoldett, Iris(OR Exemptions)

7/20/12

1,000.00month

n/a n/a n/a

Neighborhood CU 2009 Ford F250 P/U $27,660.00 4.25% $700.00

Amount of claim reduced to 89.3% for negative equity and the remainder treated as an unsecured claim.

Exhibit A-1 Page 1 of 8

7–6

















None

3,000.00 3,000.00

All attorney fees, including supplemental compensation, shall be paid from all available funds after anydisbursements under ¶2(a) and any fixed monthly payments in ¶2(b) are made.

None

3


7–7

















8,250.00

n/a

None None N/A

Big Mortgage Company (First mortgage on personal residence); Second Mortgage Company (Second mortgage on personalresidence).

None

None

46Asset protection, priority taxes

n/a


7–8




____________________________________________ ____________________________________________DEBTOR DEBTOR



12. Notwithstanding the provisions of Paragraph 1(c) of this Plan, Debtor(s) shall not be required to pay any Earned Income Credit ("EIC")funds to the Trustee during the life of the Plan.

7/20/12


Neighborhood CUc/o - President/CEO

/s/ Alice Attorney


7–9


Date: 5/11/12Debtor(s):

Case #:

Current Market Value of Real Property -$ Less 7% Cost of Sale -$

Subtotal: -$ Less Homestead Exemption -$

Non-Exempt Real Property Proceeds Subtotal: -$

Subtotal: -$ Less Any Allowable Liens on Real Property -$

Subtotal: -$ Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption: 6,000$ Lien Amount: -$ Item 2: A/RValue: 10,000$Allowed Exemption: -$ Lien Amount: -$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$

Homestead And Personal Propertydett, I & I Plan A OR Ex

Running Total:

$8,250.00

Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$ Allowed Exemption: -$ Lien Amount: -$

Total Combined Values:Total Allowed Exemptions:Total Combined Liens: -$

19,200$ 6,000$


7–10


Month Payment Available Total Secured Attorney Fees Priority Unsecured UnusedCont Claims Sep. Classes

Gotdett, I & I Plan A OR ExFriday, May 11, 2012 Page 1 of 1

Admin Rate: 10.00

Plan Analysis Report

$8,731.083.39%Atty. Fees: $3,000.00

Analysis created:5/11/2012Analysis revised: 5/11/2012Priority: $3,500.00

Unsecured: $154,474.00Towards Liquidation:Min Payoff: 0.00 Unsecured Payout:

%

%Liquidation of Estate: $8,250.00

This plan exceeds the allowed 60 months.

ME

1 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.002 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.003 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.004 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.005 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.006 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.007 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.008 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.009 $1,000.00 $900.00 $700.00 $200.00 $0.00 $0.00 $0.00$0.00 $0.00

10 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0011 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0012 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0013 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0014 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0015 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0016 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0017 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0018 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0019 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0020 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0021 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0022 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0023 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0024 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0025 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0026 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0027 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0028 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0029 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0030 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0031 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0032 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0033 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0034 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0035 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0036 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0037 $1,000.00 $900.00 $268.92 $0.00 $631.08 $0.00 $0.00$0.00 $0.0038 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0039 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0040 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0041 $1,000.00 $900.00 $0.00 $0.00 $168.92 $731.08 $0.00$0.00 $0.0042 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.0043 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.0044 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.0045 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.0046 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.00

Total $46,000.00 $41,400.00 $29,668.92 $3,000.00 $3,500.00 $5,231.08 $0.00$0.00 $0.00


7–11


Month Disbursement Interest Due Payment To Principal New Balance Int. Past Due

Neighborhood Credit Union Gotdett, I & I Plan A OR Ex5/11/2012

Claim: $18,500.00Int. Rate: 4.25 %

Claim + Int.: $19,733.07

Friday, May 11, 2012 Page 1 of 1

Claim Paid.: $19,733.07

You must first choose a secured creditor prior to running the amortization report for

that creditor. Interest Paid

This plan exceeds the allowed 60 months.ME

Balance due: $0.00

1 $550.00 $65.52 $484.48 $18,015.52 $0.00$65.522 $550.00 $63.81 $486.20 $17,529.33 $0.00$63.813 $550.00 $62.08 $487.92 $17,041.41 $0.00$62.084 $550.00 $60.36 $489.65 $16,551.76 $0.00$60.365 $550.00 $58.62 $491.38 $16,060.38 $0.00$58.626 $550.00 $56.88 $493.12 $15,567.27 $0.00$56.887 $550.00 $55.13 $494.87 $15,072.40 $0.00$55.138 $550.00 $53.38 $496.62 $14,575.78 $0.00$53.389 $550.00 $51.62 $498.38 $14,077.40 $0.00$51.62

10 $550.00 $49.86 $500.14 $13,577.26 $0.00$49.8611 $550.00 $48.09 $501.91 $13,075.35 $0.00$48.0912 $550.00 $46.31 $503.69 $12,571.66 $0.00$46.3113 $550.00 $44.52 $505.48 $12,066.18 $0.00$44.5214 $550.00 $42.73 $507.27 $11,558.91 $0.00$42.7315 $550.00 $40.94 $509.06 $11,049.85 $0.00$40.9416 $550.00 $39.13 $510.87 $10,538.99 $0.00$39.1317 $550.00 $37.33 $512.67 $10,026.31 $0.00$37.3318 $550.00 $35.51 $514.49 $9,511.82 $0.00$35.5119 $550.00 $33.69 $516.31 $8,995.51 $0.00$33.6920 $550.00 $31.86 $518.14 $8,477.37 $0.00$31.8621 $550.00 $30.02 $519.98 $7,957.39 $0.00$30.0222 $550.00 $28.18 $521.82 $7,435.58 $0.00$28.1823 $550.00 $26.33 $523.67 $6,911.91 $0.00$26.3324 $550.00 $24.48 $525.52 $6,386.39 $0.00$24.4825 $550.00 $22.62 $527.38 $5,859.01 $0.00$22.6226 $550.00 $20.75 $529.25 $5,329.76 $0.00$20.7527 $550.00 $18.88 $531.12 $4,798.64 $0.00$18.8828 $550.00 $17.00 $533.00 $4,265.63 $0.00$17.0029 $550.00 $15.11 $534.89 $3,730.74 $0.00$15.1130 $550.00 $13.21 $536.79 $3,193.95 $0.00$13.2131 $550.00 $11.31 $538.69 $2,655.26 $0.00$11.3132 $550.00 $9.40 $540.60 $2,114.67 $0.00$9.4033 $550.00 $7.49 $542.51 $1,572.16 $0.00$7.4934 $550.00 $5.57 $544.43 $1,027.72 $0.00$5.5735 $550.00 $3.64 $546.36 $481.36 $0.00$3.6436 $483.07 $1.70 $481.36 $0.00 $0.00$1.70

$19,733.07 $1,233.07 $18,500.0036 $1,233.07 0


7–12



Neighbrohood Credit Union Gotdett, I & I Plan A OR Ex5/11/2012

Claim: $9,160.00Int. Rate: 4.25 %

Claim + Int.: $9,935.85


Claim Paid.: $9,935.85




Balance due: $0.00

1 $0.00 $32.44 $0.00 $9,160.00 ($32.44)$0.002 $0.00 $32.44 $0.00 $9,160.00 ($64.88)$0.003 $0.00 $32.44 $0.00 $9,160.00 ($97.33)$0.004 $0.00 $32.44 $0.00 $9,160.00 ($129.77)$0.005 $0.00 $32.44 $0.00 $9,160.00 ($162.21)$0.006 $0.00 $32.44 $0.00 $9,160.00 ($194.65)$0.007 $0.00 $32.44 $0.00 $9,160.00 ($227.09)$0.008 $0.00 $32.44 $0.00 $9,160.00 ($259.53)$0.009 $150.00 $32.44 $0.00 $9,160.00 ($141.98)$150.00

10 $350.00 $32.44 $175.58 $8,984.42 $0.00$174.4211 $350.00 $31.82 $318.18 $8,666.24 $0.00$31.8212 $350.00 $30.69 $319.31 $8,346.93 $0.00$30.6913 $350.00 $29.56 $320.44 $8,026.49 $0.00$29.5614 $350.00 $28.43 $321.57 $7,704.92 $0.00$28.4315 $350.00 $27.29 $322.71 $7,382.21 $0.00$27.2916 $350.00 $26.15 $323.85 $7,058.35 $0.00$26.1517 $350.00 $25.00 $325.00 $6,733.35 $0.00$25.0018 $350.00 $23.85 $326.15 $6,407.20 $0.00$23.8519 $350.00 $22.69 $327.31 $6,079.89 $0.00$22.6920 $350.00 $21.53 $328.47 $5,751.42 $0.00$21.5321 $350.00 $20.37 $329.63 $5,421.79 $0.00$20.3722 $350.00 $19.20 $330.80 $5,091.00 $0.00$19.2023 $350.00 $18.03 $331.97 $4,759.03 $0.00$18.0324 $350.00 $16.85 $333.15 $4,425.88 $0.00$16.8525 $350.00 $15.68 $334.33 $4,091.56 $0.00$15.6826 $350.00 $14.49 $335.51 $3,756.05 $0.00$14.4927 $350.00 $13.30 $336.70 $3,419.35 $0.00$13.3028 $350.00 $12.11 $337.89 $3,081.46 $0.00$12.1129 $350.00 $10.91 $339.09 $2,742.37 $0.00$10.9130 $350.00 $9.71 $340.29 $2,402.09 $0.00$9.7131 $350.00 $8.51 $341.49 $2,060.59 $0.00$8.5132 $350.00 $7.30 $342.70 $1,717.89 $0.00$7.3033 $350.00 $6.08 $343.92 $1,373.97 $0.00$6.0834 $350.00 $4.87 $345.13 $1,028.84 $0.00$4.8735 $350.00 $3.64 $346.36 $682.48 $0.00$3.6436 $416.93 $2.42 $414.51 $267.97 $0.00$2.4237 $268.92 $0.95 $267.97 $0.00 $0.00$0.95

$9,935.85 $775.85 $9,160.0037 $775.85 0


7–13


B22C (Official Form 22C) (Chapter 13) (12/10)

In reIsaac GotdettIris Gotdett

According to the calculations required by this statement:The applicable commitment period is 3 years.The applicable commitment period is 5 years.Disposable income is determined under § 1325(b)(3).Disposable income is not determined under § 1325(b)(3).

(Check the boxes as directed in Lines 17 and 23 of this statement.)

Case Number:Debtor(s)

(If known)

CHAPTER 13 STATEMENT OF CURRENT MONTHLY INCOMEAND CALCULATION OF COMMITMENT PERIOD AND DISPOSABLE INCOME

In addition to Schedules I and J, this statement must be completed by every individual chapter 13 debtor, whether or not filing jointly. Joint debtorsmay complete one statement only.

Part I. REPORT OF INCOME

1Marital/filing status. Check the box that applies and complete the balance of this part of this statement as directed.a. Unmarried. Complete only Column A ("Debtor's Income") for Lines 2-10.b. Married. Complete both Column A ("Debtor's Income") and Column B ("Spouse's Income") for Lines 2-10.All figures must reflect average monthly income received from all sources, derived during the sixcalendar months prior to filing the bankruptcy case, ending on the last day of the month beforethe filing. If the amount of monthly income varied during the six months, you must divide thesix-month total by six, and enter the result on the appropriate line.

Column A

Debtor'sIncome

Column B

Spouse'sIncome

2 Gross wages, salary, tips, bonuses, overtime, commissions. $ 0.00 $ 1,250.00

3

Income from the operation of a business, profession, or farm. Subtract Line b from Line aand enter the difference in the appropriate column(s) of Line 3. If you operate more than onebusiness, profession or farm, enter aggregate numbers and provide details on an attachment. Donot enter a number less than zero. Do not include any part of the business expenses enteredon Line b as a deduction in Part IV.

$ 4,333.00 $ 0.00

4

Rents and other real property income. Subtract Line b from Line a and enter the difference inthe appropriate column(s) of Line 4. Do not enter a number less than zero. Do not include anypart of the operating expenses entered on Line b as a deduction in Part IV.

$ 0.00 $ 0.00

5 Interest, dividends, and royalties. $ 0.00 $ 0.00

6 Pension and retirement income. $ 0.00 $ 0.00

7

Any amounts paid by another person or entity, on a regular basis, for the householdexpenses of the debtor or the debtor's dependents, including child support paid for thatpurpose. Do not include alimony or separate maintenance payments or amounts paid by thedebtor's spouse. Each regular payment should be reported in only one column; if a payment islisted in Column A, do not report that payment in Column B. $ 0.00 $ 0.00

8

Unemployment compensation. Enter the amount in the appropriate column(s) of Line 8.However, if you contend that unemployment compensation received by you or your spouse was abenefit under the Social Security Act, do not list the amount of such compensation in Column Aor B, but instead state the amount in the space below:

$ 0.00 $ 0.00

Software Copyright (c) 1996-2012 CCH INCORPORATED - www.bestcase.com Best Case Bankruptcy

0.00 $ 0.00c. Rent and other real property income Subtract Line b from Line a

$ 4,333.00 $ 0.00b. Ordinary and necessary business expenses $ 0.00 $ 0.00c. Business income Subtract Line b from Line a

Debtor Spousea. Gross receipts

Debtor Spouse

Unemployment compensation claimed tobe a benefit under the Social Security Act Debtor $ 0.00 Spouse $ 0.00

a. Gross receipts $ 0.00 $ 0.00b. Ordinary and necessary operating expenses $


7–14


B22C (Official Form 22C) (Chapter 13) (12/10) 2

9

Income from all other sources. Specify source and amount. If necessary, list additional sourceson a separate page. Total and enter on Line 9. Do not include alimony or separatemaintenance payments paid by your spouse, but include all other payments of alimony orseparate maintenance. Do not include any benefits received under the Social Security Act orpayments received as a victim of a war crime, crime against humanity, or as a victim ofinternational or domestic terrorism.

$ 0.00 $ 0.00

10 Subtotal. Add Lines 2 thru 9 in Column A, and, if Column B is completed, add Lines 2 through 9in Column B. Enter the total(s). $ 4,333.00 $ 1,250.00

11 Total. If Column B has been completed, add Line 10, Column A to Line 10, Column B, and enterthe total. If Column B has not been completed, enter the amount from Line 10, Column A. $ 5,583.00

Part II. CALCULATION OF § 1325(b)(4) COMMITMENT PERIOD12 Enter the amount from Line 11 $ 5,583.00

13

Marital Adjustment. If you are married, but are not filing jointly with your spouse, AND if you contend thatcalculation of the commitment period under § 1325(b)(4) does not require inclusion of the income of your spouse,enter on Line 13 the amount of the income listed in Line 10, Column B that was NOT paid on a regular basis forthe household expenses of you or your dependents and specify, in the lines below, the basis for excluding thisincome (such as payment of the spouse's tax liability or the spouse's support of persons other than the debtor or thedebtor's dependents) and the amount of income devoted to each purpose. If necessary, list additional adjustmentson a separate page. If the conditions for entering this adjustment do not apply, enter zero.

Total and enter on Line 13 $ 0.00

14 Subtract Line 13 from Line 12 and enter the result. $ 5,583.00

15 Annualized current monthly income for § 1325(b)(4). Multiply the amount from Line 14 by the number 12 andenter the result. $ 66,996.00

16Applicable median family income. Enter the median family income for applicable state and household size.(This information is available by family size at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court.)

$ 68,719.00

17

Application of § 1325(b)(4). Check the applicable box and proceed as directed.

The amount on Line 15 is less than the amount on Line 16. Check the box for "The applicable commitment period is 3 years" atthe top of page 1 of this statement and continue with this statement.

The amount on Line 15 is not less than the amount on Line 16. Check the box for "The applicable commitment period is 5 years"at the top of page 1 of this statement and continue with this statement.

Part III. APPLICATION OF § 1325(b)(3) FOR DETERMINING DISPOSABLE INCOME

18 Enter the amount from Line 11. $ 5,583.00

19

Marital Adjustment. If you are married, but are not filing jointly with your spouse, enter on Line 19 the total ofany income listed in Line 10, Column B that was NOT paid on a regular basis for the household expenses of thedebtor or the debtor's dependents. Specify in the lines below the basis for excluding the Column B income(such aspayment of the spouse's tax liability or the spouse's support of persons other than the debtor or the debtor'sdependents) and the amount of income devoted to each purpose. If necessary, list additional adjustments on aseparate page. If the conditions for entering this adjustment do not apply, enter zero.

Total and enter on Line 19. $ 0.00

20 Current monthly income for § 1325(b)(3). Subtract Line 19 from Line 18 and enter the result. $ 5,583.00


$

Debtor

a. Enter debtor's state of residence: OR b. Enter debtor's household size: 4

Spousea.

a. $b. $c.

a. $b. $c. $

$

$ $b. $


7–15




22 Applicable median family income. Enter the amount from Line 16. $ 68,719.00

23

Application of § 1325(b)(3). Check the applicable box and proceed as directed.The amount on Line 21 is more than the amount on Line 22. Check the box for "Disposable income is determined under §1325(b)(3)" at the top of page 1 of this statement and complete the remaining parts of this statement.

The amount on Line 21 is not more than the amount on Line 22. Check the box for "Disposable income is not determined under §1325(b)(3)" at the top of page 1 of this statement and complete Part VII of this statement. Do not complete Parts IV, V, or VI.

Part IV. CALCULATION OF DEDUCTIONS FROM INCOMESubpart A: Deductions under Standards of the Internal Revenue Service (IRS)

24A

National Standards: food, apparel and services, housekeeping supplies, personal care, and miscellaneous.Enter in Line 24A the "Total" amount from IRS National Standards for Allowable Living Expenses for theapplicable number of persons. (This information is available at www.usdoj.gov/ust/ or from the clerk of thebankruptcy court.) The applicable number of persons is the number that would currently be allowed as exemptionson your federal income tax return, plus the number of any additional dependents whom you support. $

24B

National Standards: health care. Enter in Line a1 below the amount from IRS National Standards forOut-of-Pocket Health Care for persons under 65 years of age, and in Line a2 the IRS National Standards forOut-of-Pocket Health Care for persons 65 years of age or older. (This information is available atwww.usdoj.gov/ust/ or from the clerk of the bankruptcy court.) Enter in Line b1 the applicable number of personswho are under 65 years of age, and enter in Line b2 the applicable number of persons who are 65 years of age orolder. (The applicable number of persons in each age category is the number in that category that would currentlybe allowed as exemptions on your federal income tax return, plus the number of any additional dependents whomyou support.) Multiply Line a1 by Line b1 to obtain a total amount for persons under 65, and enter the result inLine c1. Multiply Line a2 by Line b2 to obtain a total amount for persons 65 and older, and enter the result in Linec2. Add Lines c1 and c2 to obtain a total health care amount, and enter the result in Line 24B.

$

25A

Local Standards: housing and utilities; non-mortgage expenses. Enter the amount of the IRS Housing andUtilities Standards; non-mortgage expenses for the applicable county and family size. (This information isavailable at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court). The applicable family size consists ofthe number that would currently be allowed as exemptions on your federal income tax return, plus the number ofany additional dependents whom you support. $

25B

Local Standards: housing and utilities; mortgage/rent expense. Enter, in Line a below, the amount of the IRSHousing and Utilities Standards; mortgage/rent expense for your county and family size (this information isavailable at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court) (the applicable family size consists ofthe number that would currently be allowed as exemptions on your federal income tax return, plus the number ofany additional dependents whom you support); enter on Line b the total of the Average Monthly Payments for anydebts secured by your home, as stated in Line 47; subtract Line b from Line a and enter the result in Line 25B. Donot enter an amount less than zero.

$

26

Local Standards: housing and utilities; adjustment. If you contend that the process set out in Lines 25A and25B does not accurately compute the allowance to which you are entitled under the IRS Housing and UtilitiesStandards, enter any additional amount to which you contend you are entitled, and state the basis for yourcontention in the space below:

$


Persons under 65 years of age Persons 65 years of age or older

a1. Allowance per person a2. Allowance per person

a. IRS Housing and Utilities Standards; mortgage/rent expense $b. Average Monthly Payment for any debts secured by your

home, if any, as stated in Line 47 $c. Net mortgage/rental expense Subtract Line b from Line a.

b1. Number of persons b2. Number of persons

c1. Subtotal c2. Subtotal


7–16



27A

Local Standards: transportation; vehicle operation/public transportation expense. You are entitled to anexpense allowance in this category regardless of whether you pay the expenses of operating a vehicle andregardless of whether you use public transportation.Check the number of vehicles for which you pay the operating expenses or for which the operating expenses areincluded as a contribution to your household expenses in Line 7. 0 1 2 or more.If you checked 0, enter on Line 27A the "Public Transportation" amount from IRS Local Standards:Transportation. If you checked 1 or 2 or more, enter on Line 27A the "Operating Costs" amount from IRS LocalStandards: Transportation for the applicable number of vehicles in the applicable Metropolitan Statistical Area orCensus Region. (These amounts are available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court.) $

27B

Local Standards: transportation; additional public transportation expense. If you pay the operating expensesfor a vehicle and also use public transportation, and you contend that you are entitled to an additional deduction foryour public transportation expenses, enter on Line 27B the "Public Transportation" amount from the IRS LocalStandards: Transportation. (This amount is available at www.usdoj.gov/ust/ or from the clerk of the bankruptcycourt.) $

28

Local Standards: transportation ownership/lease expense; Vehicle 1. Check the number of vehicles for whichyou claim an ownership/lease expense. (You may not claim an ownership/lease expense for more than twovehicles.) 1 2 or more.Enter, in Line a below, the "Ownership Costs" for "One Car" from the IRS Local Standards: Transportation(available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court); enter in Line b the total of theAverage Monthly Payments for any debts secured by Vehicle 1, as stated in Line 47; subtract Line b from Line aand enter the result in Line 28. Do not enter an amount less than zero.

$

29

Local Standards: transportation ownership/lease expense; Vehicle 2. Complete this Line only if you checkedthe "2 or more" Box in Line 28.Enter, in Line a below, the "Ownership Costs" for "One Car" from the IRS Local Standards: Transportation(available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court); enter in Line b the total of theAverage Monthly Payments for any debts secured by Vehicle 2, as stated in Line 47; subtract Line b from Line aand enter the result in Line 29. Do not enter an amount less than zero.

$

30Other Necessary Expenses: taxes. Enter the total average monthly expense that you actually incur for all federal,state, and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, socialsecurity taxes, and Medicare taxes. Do not include real estate or sales taxes. $

31Other Necessary Expenses: involuntary deductions for employment. Enter the total average monthlydeductions that are required for your employment, such as mandatory retirement contributions, union dues, anduniform costs. Do not include discretionary amounts, such as voluntary 401(k) contributions. $

32Other Necessary Expenses: life insurance. Enter total average monthly premiums that you actually pay for termlife insurance for yourself. Do not include premiums for insurance on your dependents, for whole life or forany other form of insurance. $

33Other Necessary Expenses: court-ordered payments. Enter the total monthly amount that you are required topay pursuant to the order of a court or administrative agency, such as spousal or child support payments. Do notinclude payments on past due obligations included in line 49. $

34Other Necessary Expenses: education for employment or for a physically or mentally challenged child.Enter the total average monthly amount that you actually expend for education that is a condition of employmentand for education that is required for a physically or mentally challenged dependent child for whom no publiceducation providing similar services is available. $

35 Other Necessary Expenses: childcare. Enter the total average monthly amount that you actually expend onchildcare - such as baby-sitting, day care, nursery and preschool. Do not include other educational payments. $


a. IRS Transportation Standards, Ownership Costs $

a. IRS Transportation Standards, Ownership Costs $

b.Average Monthly Payment for any debts secured by Vehicle2, as stated in Line 47 $

c. Net ownership/lease expense for Vehicle 2 Subtract Line b from Line a.

b.Average Monthly Payment for any debts secured by Vehicle1, as stated in Line 47 $



7–17



36Other Necessary Expenses: health care. Enter the total average monthly amount that you actually expend onhealth care that is required for the health and welfare of yourself or your dependents, that is not reimbursed byinsurance or paid by a health savings account, and that is in excess of the amount entered in Line 24B. Do notinclude payments for health insurance or health savings accounts listed in Line 39. $

37Other Necessary Expenses: telecommunication services. Enter the total average monthly amount that youactually pay for telecommunication services other than your basic home telephone and cell phone service - such aspagers, call waiting, caller id, special long distance, or internet service-to the extent necessary for your health andwelfare or that of your dependents. Do not include any amount previously deducted. $

38 Total Expenses Allowed under IRS Standards. Enter the total of Lines 24 through 37. $

Subpart B: Additional Living Expense DeductionsNote: Do not include any expenses that you have listed in Lines 24-37

39

Health Insurance, Disability Insurance, and Health Savings Account Expenses. List the monthly expenses inthe categories set out in lines a-c below that are reasonably necessary for yourself, your spouse, or yourdependents.

Total and enter on Line 39 $

If you do not actually expend this total amount, state your actual total average monthly expenditures in thespace below:

$

40Continued contributions to the care of household or family members. Enter the total average actual monthlyexpenses that you will continue to pay for the reasonable and necessary care and support of an elderly, chronicallyill, or disabled member of your household or member of your immediate family who is unable to pay for suchexpenses. Do not include payments listed in Line 34. $

41Protection against family violence. Enter the total average reasonably necessary monthly expenses that youactually incur to maintain the safety of your family under the Family Violence Prevention and Services Act orother applicable federal law. The nature of these expenses is required to be kept confidential by the court. $

42Home energy costs. Enter the total average monthly amount, in excess of the allowance specified by IRS LocalStandards for Housing and Utilities that you actually expend for home energy costs. You must provide your casetrustee with documentation of your actual expenses, and you must demonstrate that the additional amountclaimed is reasonable and necessary. $

43

Education expenses for dependent children under 18. Enter the total average monthly expenses that youactually incur, not to exceed $147.92 per child, for attendance at a private or public elementary or secondaryschool by your dependent children less than 18 years of age. You must provide your case trustee withdocumentation of your actual expenses, and you must explain why the amount claimed is reasonable andnecessary and not already accounted for in the IRS Standards. $

44

Additional food and clothing expense. Enter the total average monthly amount by which your food and clothingexpenses exceed the combined allowances for food and clothing (apparel and services) in the IRS NationalStandards, not to exceed 5% of those combined allowances. (This information is available at www.usdoj.gov/ust/or from the clerk of the bankruptcy court.) You must demonstrate that the additional amount claimed isreasonable and necessary. $

45Charitable contributions. Enter the amount reasonably necessary for you to expend each month on charitablecontributions in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. §170(c)(1)-(2). Do not include any amount in excess of 15% of your gross monthly income. $

46 Total Additional Expense Deductions under § 707(b). Enter the total of Lines 39 through 45. $


Health Insurance $b. Disability Insurance $c. Health Savings Account $

a.


7–18



Subpart C: Deductions for Debt Payment

47

Future payments on secured claims. For each of your debts that is secured by an interest in property that youown, list the name of creditor, identify the property securing the debt, state the Average Monthly Payment, andcheck whether the payment includes taxes or insurance. The Average Monthly Payment is the total of all amountsscheduled as contractually due to each Secured Creditor in the 60 months following the filing of the bankruptcycase, divided by 60. If necessary, list additional entries on a separate page. Enter the total of the Average MonthlyPayments on Line 47.

Name of Creditor Property Securing the Debt AverageMonthlyPayment

Does paymentinclude taxesor insurance

a. $ yes noTotal: Add Lines $

48

Other payments on secured claims. If any of debts listed in Line 47 are secured by your primary residence, amotor vehicle, or other property necessary for your support or the support of your dependents, you may include inyour deduction 1/60th of any amount (the "cure amount") that you must pay the creditor in addition to thepayments listed in Line 47, in order to maintain possession of the property. The cure amount would include anysums in default that must be paid in order to avoid repossession or foreclosure. List and total any such amounts inthe following chart. If necessary, list additional entries on a separate page.

Name of Creditor Property Securing the Debt 1/60th of the Cure Amounta. $

Total: Add Lines $

49Payments on prepetition priority claims. Enter the total amount, divided by 60, of all priority claims, such aspriority tax, child support and alimony claims, for which you were liable at the time of your bankruptcy filing. Donot include current obligations, such as those set out in Line 33. $

50

Chapter 13 administrative expenses. Multiply the amount in Line a by the amount in Line b, and enter theresulting administrative expense.

$

51 Total Deductions for Debt Payment. Enter the total of Lines 47 through 50. $

Subpart D: Total Deductions from Income52 Total of all deductions from income. Enter the total of Lines 38, 46, and 51. $

Part V. DETERMINATION OF DISPOSABLE INCOME UNDER § 1325(b)(2)53 Total current monthly income. Enter the amount from Line 20. $

54Support income. Enter the monthly average of any child support payments, foster care payments, or disabilitypayments for a dependent child, reported in Part I, that you received in accordance with applicable nonbankruptcylaw, to the extent reasonably necessary to be expended for such child. $

55Qualified retirement deductions. Enter the monthly total of (a) all amounts withheld by your employer fromwages as contributions for qualified retirement plans, as specified in § 541(b)(7) and (b) all required repayments ofloans from retirement plans, as specified in § 362(b)(19). $

56 Total of all deductions allowed under § 707(b)(2). Enter the amount from Line 52. $


a. Projected average monthly Chapter 13 plan payment. $b. Current multiplier for your district as determined under schedules

issued by the Executive Office for United States Trustees. (Thisinformation is available at www.usdoj.gov/ust/ or from the clerk ofthe bankruptcy court.) x

c. Average monthly administrative expense of chapter 13 case Total: Multiply Lines a and b


7–19



57

Deduction for special circumstances. If there are special circumstances that justify additional expenses forwhich there is no reasonable alternative, describe the special circumstances and the resulting expenses in lines a-cbelow. If necessary, list additional entries on a separate page. Total the expenses and enter the total in Line 57.You must provide your case trustee with documentation of these expenses and you must provide a detailedexplanation of the special circumstances that make such expense necessary and reasonable.

$

58 Total adjustments to determine disposable income. Add the amounts on Lines 54, 55, 56, and 57 and enter theresult. $

59 Monthly Disposable Income Under § 1325(b)(2). Subtract Line 58 from Line 53 and enter the result. $

Part VI. ADDITIONAL EXPENSE CLAIMS

60

Other Expenses. List and describe any monthly expenses, not otherwise stated in this form, that are required for the health and welfareof you and your family and that you contend should be an additional deduction from your current monthly income under §707(b)(2)(A)(ii)(I). If necessary, list additional sources on a separate page. All figures should reflect your average monthly expense foreach item. Total the expenses.

Part VII. VERIFICATION

61

I declare under penalty of perjury that the information provided in this statement is true and correct. (If this is a joint case, both debtorsmust sign.)

Isaac Gotdett(Debtor)

Iris Gotdett(Joint Debtor, if any)


b. $c. $

Expense Description Monthly Amounta. $b. $c. $d. $

Total: Add Lines a, b, c and d $

Total: Add Lines

Nature of special circumstances

Date: Signature:

Date: Signature

Amount of Expensea. $


7–20



Current Monthly Income Details for the Debtor

Debtor Income Details:Income for the Period 11/01/2011 to 04/30/2012.

Line 3 - Income from operation of a business, profession, or farmSource of Income: CarpentryConstant income of 4,333.00 per month.Constant expense of 0.00 per month.Net Income 4,333.00 per month.



7–21



Current Monthly Income Details for the Debtor's Spouse

Spouse Income Details:Income for the Period 11/01/2011 to 04/30/2012.

Line 2 - Gross wages, salary, tips, bonuses, overtime, commissionsSource of Income: Large CompanyConstant income of $1,250.00 per month.



7–22


7–23















Goldett, IsaacGoldett, Iris(WA Exemptions)

6/1/12

1,000.00month

n/a n/a n/a

Neighborhood CU 2009 Ford F250 P/U $18,500.00* 4.25% $550.00Split ClaimNeighborhood CU 2009 Ford F250 P/U 9,160.00* 4.25% AAFAAF**Split Claim (Same vehicle)

*Amount of claim reduced to 89.3% for negative equity and the remainder treated as an unsecured claim.**All available funds after attorney fees.


7–24

















None

3,250.00 3,000.00


None

1


7–25

















5,100.00

n/a

None None N/A


None

None

42Secured creditor payments, priority taxes, asset protection

n/a


7–26




____________________________________________ ____________________________________________DEBTOR DEBTOR




6/1/12



/s/ Alice Attorney


7–27



Case #:





Subtotal: -$ Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption: 6,500$ Lien Amount: -$ Item 2: A/RValue: 10,000$Allowed Exemption: 3,000$ Lien Amount: -$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$

Homestead And Personal Propertydett, I & I Plan A WA Ex

Running Total:

$5,100.00


Total Combined Values:Total Allowed Exemptions:Total Combined Liens:


7–28



Gotdett, I & I Plan A WA ExeFriday, May 11, 2012 Page 1 of 1

Admin Rate: 10.00


$5,131.081.04%Atty. Fees: $3,000.00



%

%Liquidation of Estate: $5,100.00


ME

1 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.002 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.003 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.004 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.005 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.006 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.007 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.008 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.009 $1,000.00 $900.00 $700.00 $200.00 $0.00 $0.00 $0.00$0.00 $0.0010 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0011 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0012 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0013 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0014 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0015 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0016 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0017 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0018 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0019 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0020 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0021 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0022 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0023 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0024 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0025 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0026 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0027 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0028 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0029 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0030 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0031 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0032 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0033 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0034 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0035 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0036 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0037 $1,000.00 $900.00 $268.92 $0.00 $631.08 $0.00 $0.00$0.00 $0.0038 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0039 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0040 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0041 $1,000.00 $900.00 $0.00 $0.00 $168.92 $731.08 $0.00$0.00 $0.0042 $1,000.00 $900.00 $0.00 $0.00 $0.00 $900.00 $0.00$0.00 $0.00

Total $42,000.00 $37,800.00 $29,668.92 $3,000.00 $3,500.00 $1,631.08 $0.00$0.00 $0.00


7–29



Neighborhood CU Gotdett, I & I Plan A WA Exemp5/11/2012

Claim: $18,500.00Int. Rate: 4.25 %

Claim + Int.: $19,733.07


Claim Paid.: $19,733.07




Balance due: $0.00

1 $550.00 $65.52 $484.48 $18,015.52 $0.00$65.522 $550.00 $63.81 $486.20 $17,529.33 $0.00$63.813 $550.00 $62.08 $487.92 $17,041.41 $0.00$62.084 $550.00 $60.36 $489.65 $16,551.76 $0.00$60.365 $550.00 $58.62 $491.38 $16,060.38 $0.00$58.626 $550.00 $56.88 $493.12 $15,567.27 $0.00$56.887 $550.00 $55.13 $494.87 $15,072.40 $0.00$55.138 $550.00 $53.38 $496.62 $14,575.78 $0.00$53.389 $550.00 $51.62 $498.38 $14,077.40 $0.00$51.62

10 $550.00 $49.86 $500.14 $13,577.26 $0.00$49.8611 $550.00 $48.09 $501.91 $13,075.35 $0.00$48.0912 $550.00 $46.31 $503.69 $12,571.66 $0.00$46.3113 $550.00 $44.52 $505.48 $12,066.18 $0.00$44.5214 $550.00 $42.73 $507.27 $11,558.91 $0.00$42.7315 $550.00 $40.94 $509.06 $11,049.85 $0.00$40.9416 $550.00 $39.13 $510.87 $10,538.99 $0.00$39.1317 $550.00 $37.33 $512.67 $10,026.31 $0.00$37.3318 $550.00 $35.51 $514.49 $9,511.82 $0.00$35.5119 $550.00 $33.69 $516.31 $8,995.51 $0.00$33.6920 $550.00 $31.86 $518.14 $8,477.37 $0.00$31.8621 $550.00 $30.02 $519.98 $7,957.39 $0.00$30.0222 $550.00 $28.18 $521.82 $7,435.58 $0.00$28.1823 $550.00 $26.33 $523.67 $6,911.91 $0.00$26.3324 $550.00 $24.48 $525.52 $6,386.39 $0.00$24.4825 $550.00 $22.62 $527.38 $5,859.01 $0.00$22.6226 $550.00 $20.75 $529.25 $5,329.76 $0.00$20.7527 $550.00 $18.88 $531.12 $4,798.64 $0.00$18.8828 $550.00 $17.00 $533.00 $4,265.63 $0.00$17.0029 $550.00 $15.11 $534.89 $3,730.74 $0.00$15.1130 $550.00 $13.21 $536.79 $3,193.95 $0.00$13.2131 $550.00 $11.31 $538.69 $2,655.26 $0.00$11.3132 $550.00 $9.40 $540.60 $2,114.67 $0.00$9.4033 $550.00 $7.49 $542.51 $1,572.16 $0.00$7.4934 $550.00 $5.57 $544.43 $1,027.72 $0.00$5.5735 $550.00 $3.64 $546.36 $481.36 $0.00$3.6436 $483.07 $1.70 $481.36 $0.00 $0.00$1.70

$19,733.07 $1,233.07 $18,500.0036 $1,233.07 0


7–30



Neighborhood CU Gotdett, I & I Plan A WA Exemp5/11/2012

Claim: $9,160.00Int. Rate: 4.25 %

Claim + Int.: $9,935.85






Balance due: $0.00

1 $0.00 $32.44 $0.00 $9,160.00 ($32.44)$0.002 $0.00 $32.44 $0.00 $9,160.00 ($64.88)$0.003 $0.00 $32.44 $0.00 $9,160.00 ($97.33)$0.004 $0.00 $32.44 $0.00 $9,160.00 ($129.77)$0.005 $0.00 $32.44 $0.00 $9,160.00 ($162.21)$0.006 $0.00 $32.44 $0.00 $9,160.00 ($194.65)$0.007 $0.00 $32.44 $0.00 $9,160.00 ($227.09)$0.008 $0.00 $32.44 $0.00 $9,160.00 ($259.53)$0.009 $150.00 $32.44 $0.00 $9,160.00 ($141.98)$150.00

10 $350.00 $32.44 $175.58 $8,984.42 $0.00$174.4211 $350.00 $31.82 $318.18 $8,666.24 $0.00$31.8212 $350.00 $30.69 $319.31 $8,346.93 $0.00$30.6913 $350.00 $29.56 $320.44 $8,026.49 $0.00$29.5614 $350.00 $28.43 $321.57 $7,704.92 $0.00$28.4315 $350.00 $27.29 $322.71 $7,382.21 $0.00$27.2916 $350.00 $26.15 $323.85 $7,058.35 $0.00$26.1517 $350.00 $25.00 $325.00 $6,733.35 $0.00$25.0018 $350.00 $23.85 $326.15 $6,407.20 $0.00$23.8519 $350.00 $22.69 $327.31 $6,079.89 $0.00$22.6920 $350.00 $21.53 $328.47 $5,751.42 $0.00$21.5321 $350.00 $20.37 $329.63 $5,421.79 $0.00$20.3722 $350.00 $19.20 $330.80 $5,091.00 $0.00$19.2023 $350.00 $18.03 $331.97 $4,759.03 $0.00$18.0324 $350.00 $16.85 $333.15 $4,425.88 $0.00$16.8525 $350.00 $15.68 $334.33 $4,091.56 $0.00$15.6826 $350.00 $14.49 $335.51 $3,756.05 $0.00$14.4927 $350.00 $13.30 $336.70 $3,419.35 $0.00$13.3028 $350.00 $12.11 $337.89 $3,081.46 $0.00$12.1129 $350.00 $10.91 $339.09 $2,742.37 $0.00$10.9130 $350.00 $9.71 $340.29 $2,402.09 $0.00$9.7131 $350.00 $8.51 $341.49 $2,060.59 $0.00$8.5132 $350.00 $7.30 $342.70 $1,717.89 $0.00$7.3033 $350.00 $6.08 $343.92 $1,373.97 $0.00$6.0834 $350.00 $4.87 $345.13 $1,028.84 $0.00$4.8735 $350.00 $3.64 $346.36 $682.48 $0.00$3.6436 $416.93 $2.42 $414.51 $267.97 $0.00$2.4237 $268.92 $0.95 $267.97 $0.00 $0.00$0.95

$9,935.85 $775.85 $9,160.0037 $775.85 0


7–31















Goldett, IsaacGoldett, Iris(Fed Exemptions)

6/1/12

1,000.00month

n/a n/a n/a

Neighborhood CU 2009 Ford F250 P/U $18,500.00* 4.25% $550.00Split ClaimNeighborhood CU 2009 Ford F250 P/U $9,160.00* 4.25% AAFAAF**Split Claim (Same vehicle)



7–32

















None

3,250.00 3,000.00


None

0


7–33

















0.00

n/a

None None N/A


None

None

41Secured creditor payments, priority taxes

n/a


7–34




____________________________________________ ____________________________________________DEBTOR DEBTOR




6/1/12



/s/ Alice Attorney


7–35



Case #:





Subtotal: -$ Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption: 6,900$ Lien Amount: -$ Item 2: A/RValue: 10,000$Allowed Exemption: 10,000$Lien Amount: -$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$

Homestead And Personal Propertydett, I & I Plan A Fed Ex

Running Total:

$0.00



19,200$ 16,900$


7–36



Gotdett, I & I Plan A FED ExeFriday, May 11, 2012 Page 1 of 1

Admin Rate: 10.00


$4,231.080.46%Atty. Fees: $3,000.00



%

%Liquidation of Estate: $0.00


ME

1 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.002 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.003 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.004 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.005 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.006 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.007 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.008 $1,000.00 $900.00 $550.00 $350.00 $0.00 $0.00 $0.00$0.00 $0.009 $1,000.00 $900.00 $700.00 $200.00 $0.00 $0.00 $0.00$0.00 $0.0010 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0011 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0012 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0013 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0014 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0015 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0016 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0017 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0018 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0019 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0020 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0021 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0022 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0023 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0024 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0025 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0026 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0027 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0028 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0029 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0030 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0031 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0032 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0033 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0034 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0035 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0036 $1,000.00 $900.00 $900.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0037 $1,000.00 $900.00 $268.92 $0.00 $631.08 $0.00 $0.00$0.00 $0.0038 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0039 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0040 $1,000.00 $900.00 $0.00 $0.00 $900.00 $0.00 $0.00$0.00 $0.0041 $1,000.00 $900.00 $0.00 $0.00 $168.92 $731.08 $0.00$0.00 $0.00

Total $41,000.00 $36,900.00 $29,668.92 $3,000.00 $3,500.00 $731.08 $0.00$0.00 $0.00


7–37



Neighborhood Credit Union Gotdett, I & I Plan A FED Exemp5/11/2012

Claim: $18,500.00Int. Rate: 4.25 %

Claim + Int.: $19,733.07


Claim Paid.: $19,733.07




Balance due: $0.00

1 $550.00 $65.52 $484.48 $18,015.52 $0.00$65.522 $550.00 $63.81 $486.20 $17,529.33 $0.00$63.813 $550.00 $62.08 $487.92 $17,041.41 $0.00$62.084 $550.00 $60.36 $489.65 $16,551.76 $0.00$60.365 $550.00 $58.62 $491.38 $16,060.38 $0.00$58.626 $550.00 $56.88 $493.12 $15,567.27 $0.00$56.887 $550.00 $55.13 $494.87 $15,072.40 $0.00$55.138 $550.00 $53.38 $496.62 $14,575.78 $0.00$53.389 $550.00 $51.62 $498.38 $14,077.40 $0.00$51.62

10 $550.00 $49.86 $500.14 $13,577.26 $0.00$49.8611 $550.00 $48.09 $501.91 $13,075.35 $0.00$48.0912 $550.00 $46.31 $503.69 $12,571.66 $0.00$46.3113 $550.00 $44.52 $505.48 $12,066.18 $0.00$44.5214 $550.00 $42.73 $507.27 $11,558.91 $0.00$42.7315 $550.00 $40.94 $509.06 $11,049.85 $0.00$40.9416 $550.00 $39.13 $510.87 $10,538.99 $0.00$39.1317 $550.00 $37.33 $512.67 $10,026.31 $0.00$37.3318 $550.00 $35.51 $514.49 $9,511.82 $0.00$35.5119 $550.00 $33.69 $516.31 $8,995.51 $0.00$33.6920 $550.00 $31.86 $518.14 $8,477.37 $0.00$31.8621 $550.00 $30.02 $519.98 $7,957.39 $0.00$30.0222 $550.00 $28.18 $521.82 $7,435.58 $0.00$28.1823 $550.00 $26.33 $523.67 $6,911.91 $0.00$26.3324 $550.00 $24.48 $525.52 $6,386.39 $0.00$24.4825 $550.00 $22.62 $527.38 $5,859.01 $0.00$22.6226 $550.00 $20.75 $529.25 $5,329.76 $0.00$20.7527 $550.00 $18.88 $531.12 $4,798.64 $0.00$18.8828 $550.00 $17.00 $533.00 $4,265.63 $0.00$17.0029 $550.00 $15.11 $534.89 $3,730.74 $0.00$15.1130 $550.00 $13.21 $536.79 $3,193.95 $0.00$13.2131 $550.00 $11.31 $538.69 $2,655.26 $0.00$11.3132 $550.00 $9.40 $540.60 $2,114.67 $0.00$9.4033 $550.00 $7.49 $542.51 $1,572.16 $0.00$7.4934 $550.00 $5.57 $544.43 $1,027.72 $0.00$5.5735 $550.00 $3.64 $546.36 $481.36 $0.00$3.6436 $483.07 $1.70 $481.36 $0.00 $0.00$1.70

$19,733.07 $1,233.07 $18,500.0036 $1,233.07 0


7–38



Neighborhood Credit Union Gotdett, I & I Plan A FED Exemp5/11/2012

Claim: $9,160.00Int. Rate: 4.25 %

Claim + Int.: $9,935.85






Balance due: $0.00

1 $0.00 $32.44 $0.00 $9,160.00 ($32.44)$0.002 $0.00 $32.44 $0.00 $9,160.00 ($64.88)$0.003 $0.00 $32.44 $0.00 $9,160.00 ($97.33)$0.004 $0.00 $32.44 $0.00 $9,160.00 ($129.77)$0.005 $0.00 $32.44 $0.00 $9,160.00 ($162.21)$0.006 $0.00 $32.44 $0.00 $9,160.00 ($194.65)$0.007 $0.00 $32.44 $0.00 $9,160.00 ($227.09)$0.008 $0.00 $32.44 $0.00 $9,160.00 ($259.53)$0.009 $150.00 $32.44 $0.00 $9,160.00 ($141.98)$150.00

10 $350.00 $32.44 $175.58 $8,984.42 $0.00$174.4211 $350.00 $31.82 $318.18 $8,666.24 $0.00$31.8212 $350.00 $30.69 $319.31 $8,346.93 $0.00$30.6913 $350.00 $29.56 $320.44 $8,026.49 $0.00$29.5614 $350.00 $28.43 $321.57 $7,704.92 $0.00$28.4315 $350.00 $27.29 $322.71 $7,382.21 $0.00$27.2916 $350.00 $26.15 $323.85 $7,058.35 $0.00$26.1517 $350.00 $25.00 $325.00 $6,733.35 $0.00$25.0018 $350.00 $23.85 $326.15 $6,407.20 $0.00$23.8519 $350.00 $22.69 $327.31 $6,079.89 $0.00$22.6920 $350.00 $21.53 $328.47 $5,751.42 $0.00$21.5321 $350.00 $20.37 $329.63 $5,421.79 $0.00$20.3722 $350.00 $19.20 $330.80 $5,091.00 $0.00$19.2023 $350.00 $18.03 $331.97 $4,759.03 $0.00$18.0324 $350.00 $16.85 $333.15 $4,425.88 $0.00$16.8525 $350.00 $15.68 $334.33 $4,091.56 $0.00$15.6826 $350.00 $14.49 $335.51 $3,756.05 $0.00$14.4927 $350.00 $13.30 $336.70 $3,419.35 $0.00$13.3028 $350.00 $12.11 $337.89 $3,081.46 $0.00$12.1129 $350.00 $10.91 $339.09 $2,742.37 $0.00$10.9130 $350.00 $9.71 $340.29 $2,402.09 $0.00$9.7131 $350.00 $8.51 $341.49 $2,060.59 $0.00$8.5132 $350.00 $7.30 $342.70 $1,717.89 $0.00$7.3033 $350.00 $6.08 $343.92 $1,373.97 $0.00$6.0834 $350.00 $4.87 $345.13 $1,028.84 $0.00$4.8735 $350.00 $3.64 $346.36 $682.48 $0.00$3.6436 $416.93 $2.42 $414.51 $267.97 $0.00$2.4237 $268.92 $0.95 $267.97 $0.00 $0.00$0.95

$9,935.85 $775.85 $9,160.0037 $775.85 0


7–39


APPEnDiX B—hyPOThETiCAL PArT B FOrMS AnD CALCuLATiOnS














Goldett, IsaacGoldett, Irene

6/22/12

1,005.00month

n/a n/a n/a

Neighborhood CU 2009 Ford F250 P/U $27,660.00* 4.25% $550.00

IRS Personal property $11,200.00 5% AAFAAF**

Big Mortgage Company Personal residence $4,500.00 0% AAFA** IRS


Exhibit B-1 Page 1 of 9

7–40

















None

3,250.00 3,000.00


None

0


7–41

















0.00

n/a

None None N/A

Big Mortgage Company (First mortgage on personal residence)

None

None

60Applicable commitment period

n/a


7–42




____________________________________________ ____________________________________________DEBTOR DEBTOR




13. Pursuant to §506, and within 60 days after confirmation, debtor(s) will file an adversary proceeding or motion to avoid the junior lien heldby Second Mortgage Company in the real property located at 123 Indett Ave, Happy Valley, OR 97015. Entry of the Order Confirming Plan isnot res judicata with respect to this lien. Any Judgment or Order avoiding such lien shall be void and such lien shall be reinstated if the caseis dismissed or converted. If the lien creditor has filed a secured claim and the lien is avoided, the claim will be treated as an allowedunsecured claim.

6/22/12



Big Mortgage Companyc/o Registered Agent

IRS - at all addresses on matrix

Second Mortgage Co.c/o Registered Agent

/s/ Alice Attorney


7–43



Case #:

C t M k t V l f R l P t $

Homestead And Personal PropertyGotdett, I & I Part B

Running Total:

$0.00

Current Market Value of Real Property -$Less 7% Cost of Sale -$




Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption: 6,000$ Li A t 1 200$Lien Amount: 1,200$ Item 2: A/RValue: 10,000$ Allowed Exemption:Lien Amount: 10,000$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$

Total Combined Values:Total Allowed Exemptions:Total Combined Liens: 11,200$

19,200$ 6,000$

7–44



Case #:



Running Total:

$0.00





Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1Value: -$ Allowed Exemption: -$ Li A t $Lien Amount: -$ Item 2:Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$


-$ -$

7–45



Case #:



Running Total:

$2,450.00





Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption:Li A t 1 200$Lien Amount: 1,200$ Item 2: A/RValue: 10,000$ Allowed Exemption:Lien Amount: 10,000$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$


19,200$ -$

7–46



Gotdett, I & I Part BFriday, May 11, 2012 Page 1 of 1

Admin Rate: 10.00


$3,765.580.11%Atty. Fees: $3,000.00



%



ME

1 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.002 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.003 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.004 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.005 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.006 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.007 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.008 $1,005.00 $904.50 $550.00 $354.50 $0.00 $0.00 $0.00$0.00 $0.009 $1,005.00 $904.50 $740.50 $164.00 $0.00 $0.00 $0.00$0.00 $0.00

10 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0011 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0012 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0013 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0014 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0015 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0016 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0017 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0018 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0019 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0020 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0021 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0022 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0023 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0024 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0025 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0026 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0027 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0028 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0029 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0030 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0031 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0032 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0033 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0034 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0035 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0036 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0037 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0038 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0039 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0040 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0041 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0042 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0043 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0044 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0045 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0046 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0047 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0048 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0049 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0050 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0051 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0052 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0053 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0054 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0055 $1,005.00 $904.50 $904.50 $0.00 $0.00 $0.00 $0.00$0.00 $0.0056 $1,005.00 $904.50 $756.92 $0.00 $147.58 $0.00 $0.00$0.00 $0.0057 $1,005.00 $904.50 $0.00 $0.00 $904.50 $0.00 $0.00$0.00 $0.0058 $1,005.00 $904.50 $0.00 $0.00 $904.50 $0.00 $0.00$0.00 $0.0059 $1,005.00 $904.50 $0.00 $0.00 $904.50 $0.00 $0.00$0.00 $0.0060 $1,005.00 $904.50 $0.00 $0.00 $638.92 $265.58 $0.00$0.00 $0.00

Total $60,300.00 $54,270.00 $47,504.42 $3,000.00 $3,500.00 $265.58 $0.00$0.00 $0.00


7–47



Neighborhood Credit Union Gotdett, I & I Part B5/10/2012

Claim: $27,660.00Int. Rate: 4.25 %

Claim + Int.: $30,515.58


Claim Paid.: $30,515.58




Balance due: $0.00

1 $550.00 $97.96 $452.04 $27,207.96 $0.00$97.962 $550.00 $96.36 $453.64 $26,754.32 $0.00$96.363 $550.00 $94.75 $455.25 $26,299.08 $0.00$94.754 $550.00 $93.14 $456.86 $25,842.22 $0.00$93.145 $550.00 $91.52 $458.48 $25,383.75 $0.00$91.526 $550.00 $89.90 $460.10 $24,923.65 $0.00$89.907 $550.00 $88.27 $461.73 $24,461.92 $0.00$88.278 $550.00 $86.64 $463.36 $23,998.55 $0.00$86.649 $550.00 $84.99 $465.01 $23,533.55 $0.00$84.99

10 $550.00 $83.35 $466.65 $23,066.90 $0.00$83.3511 $550.00 $81.70 $468.30 $22,598.59 $0.00$81.7012 $550.00 $80.04 $469.96 $22,128.63 $0.00$80.0413 $550.00 $78.37 $471.63 $21,657.00 $0.00$78.3714 $550.00 $76.70 $473.30 $21,183.70 $0.00$76.7015 $550.00 $75.03 $474.97 $20,708.73 $0.00$75.0316 $550.00 $73.34 $476.66 $20,232.07 $0.00$73.3417 $550.00 $71.66 $478.34 $19,753.73 $0.00$71.6618 $550.00 $69.96 $480.04 $19,273.69 $0.00$69.9619 $550.00 $68.26 $481.74 $18,791.95 $0.00$68.2620 $550.00 $66.55 $483.45 $18,308.50 $0.00$66.5521 $550.00 $64.84 $485.16 $17,823.35 $0.00$64.8422 $550.00 $63.12 $486.88 $17,336.47 $0.00$63.1223 $550.00 $61.40 $488.60 $16,847.87 $0.00$61.4024 $550.00 $59.67 $490.33 $16,357.54 $0.00$59.6725 $550.00 $57.93 $492.07 $15,865.47 $0.00$57.9326 $550.00 $56.19 $493.81 $15,371.66 $0.00$56.1927 $550.00 $54.44 $495.56 $14,876.11 $0.00$54.4428 $550.00 $52.69 $497.31 $14,378.79 $0.00$52.6929 $550.00 $50.92 $499.08 $13,879.72 $0.00$50.9230 $550.00 $49.16 $500.84 $13,378.87 $0.00$49.1631 $550.00 $47.38 $502.62 $12,876.26 $0.00$47.3832 $550.00 $45.60 $504.40 $12,371.86 $0.00$45.6033 $550.00 $43.82 $506.18 $11,865.68 $0.00$43.8234 $550.00 $42.02 $507.98 $11,357.70 $0.00$42.0235 $550.00 $40.23 $509.77 $10,847.93 $0.00$40.2336 $550.00 $38.42 $511.58 $10,336.35 $0.00$38.4237 $550.00 $36.61 $513.39 $9,822.95 $0.00$36.6138 $550.00 $34.79 $515.21 $9,307.74 $0.00$34.7939 $550.00 $32.96 $517.04 $8,790.71 $0.00$32.9640 $550.00 $31.13 $518.87 $8,271.84 $0.00$31.1341 $550.00 $29.30 $520.70 $7,751.14 $0.00$29.3042 $550.00 $27.45 $522.55 $7,228.59 $0.00$27.4543 $550.00 $25.60 $524.40 $6,704.19 $0.00$25.6044 $550.00 $23.74 $526.26 $6,177.94 $0.00$23.7445 $550.00 $21.88 $528.12 $5,649.82 $0.00$21.8846 $550.00 $20.01 $529.99 $5,119.83 $0.00$20.0147 $550.00 $18.13 $531.87 $4,587.96 $0.00$18.1348 $550.00 $16.25 $533.75 $4,054.21 $0.00$16.2549 $550.00 $14.36 $535.64 $3,518.57 $0.00$14.3650 $550.00 $12.46 $537.54 $2,981.03 $0.00$12.4651 $550.00 $10.56 $539.44 $2,441.59 $0.00$10.5652 $550.00 $8.65 $541.35 $1,900.23 $0.00$8.6553 $550.00 $6.73 $543.27 $1,356.96 $0.00$6.7354 $550.00 $4.81 $545.19 $811.77 $0.00$4.8155 $550.00 $2.88 $547.13 $264.64 $0.00$2.8856 $265.58 $0.94 $264.64 $0.00 $0.00$0.94

$30,515.58 $2,855.58 $27,660.0056 $2,855.58 0


7–48



IRS Gotdett, I & I Part B5/10/2012

Claim: $11,200.00Int. Rate: 5.00 %

Claim + Int.: $12,488.84


Claim Paid.: $12,488.84




Balance due: $0.00

1 $0.00 $46.67 $0.00 $11,200.00 ($46.67)$0.002 $0.00 $46.67 $0.00 $11,200.00 ($93.33)$0.003 $0.00 $46.67 $0.00 $11,200.00 ($140.00)$0.004 $0.00 $46.67 $0.00 $11,200.00 ($186.67)$0.005 $0.00 $46.67 $0.00 $11,200.00 ($233.33)$0.006 $0.00 $46.67 $0.00 $11,200.00 ($280.00)$0.007 $0.00 $46.67 $0.00 $11,200.00 ($326.67)$0.008 $0.00 $46.67 $0.00 $11,200.00 ($373.33)$0.009 $190.50 $46.67 $0.00 $11,200.00 ($229.50)$190.50

10 $354.50 $46.67 $78.33 $11,121.67 $0.00$276.1711 $354.50 $46.34 $308.16 $10,813.51 $0.00$46.3412 $354.50 $45.06 $309.44 $10,504.06 $0.00$45.0613 $354.50 $43.77 $310.73 $10,193.33 $0.00$43.7714 $354.50 $42.47 $312.03 $9,881.30 $0.00$42.4715 $354.50 $41.17 $313.33 $9,567.97 $0.00$41.1716 $354.50 $39.87 $314.63 $9,253.34 $0.00$39.8717 $354.50 $38.56 $315.94 $8,937.40 $0.00$38.5618 $354.50 $37.24 $317.26 $8,620.14 $0.00$37.2419 $354.50 $35.92 $318.58 $8,301.55 $0.00$35.9220 $354.50 $34.59 $319.91 $7,981.64 $0.00$34.5921 $354.50 $33.26 $321.24 $7,660.40 $0.00$33.2622 $354.50 $31.92 $322.58 $7,337.82 $0.00$31.9223 $354.50 $30.57 $323.93 $7,013.89 $0.00$30.5724 $354.50 $29.22 $325.28 $6,688.62 $0.00$29.2225 $354.50 $27.87 $326.63 $6,361.99 $0.00$27.8726 $354.50 $26.51 $327.99 $6,033.99 $0.00$26.5127 $354.50 $25.14 $329.36 $5,704.64 $0.00$25.1428 $354.50 $23.77 $330.73 $5,373.91 $0.00$23.7729 $354.50 $22.39 $332.11 $5,041.80 $0.00$22.3930 $354.50 $21.01 $333.49 $4,708.30 $0.00$21.0131 $354.50 $19.62 $334.88 $4,373.42 $0.00$19.6232 $354.50 $18.22 $336.28 $4,037.14 $0.00$18.2233 $354.50 $16.82 $337.68 $3,699.47 $0.00$16.8234 $354.50 $15.41 $339.09 $3,360.38 $0.00$15.4135 $354.50 $14.00 $340.50 $3,019.88 $0.00$14.0036 $354.50 $12.58 $341.92 $2,677.97 $0.00$12.5837 $354.50 $11.16 $343.34 $2,334.62 $0.00$11.1638 $354.50 $9.73 $344.77 $1,989.85 $0.00$9.7339 $354.50 $8.29 $346.21 $1,643.64 $0.00$8.2940 $354.50 $6.85 $347.65 $1,295.99 $0.00$6.8541 $354.50 $5.40 $349.10 $946.89 $0.00$5.4042 $354.50 $3.95 $350.55 $596.34 $0.00$3.9543 $354.50 $2.48 $352.02 $244.32 $0.00$2.4844 $245.34 $1.02 $244.32 $0.00 $0.00$1.02

$12,488.84 $1,288.84 $11,200.0044 $1,288.84 0


7–49



Big Mortgage Company Gotdett, I & I Part B5/10/2012

Claim: $4,500.00Int. Rate: 0.00 %

Claim + Int.: $4,500.00






Balance due: $0.00

1 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.002 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.003 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.004 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.005 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.006 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.007 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.008 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.009 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.00

10 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0011 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0012 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0013 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0014 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0015 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0016 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0017 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0018 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0019 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0020 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0021 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0022 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0023 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0024 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0025 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0026 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0027 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0028 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0029 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0030 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0031 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0032 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0033 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0034 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0035 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0036 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0037 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0038 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0039 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0040 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0041 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0042 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0043 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0044 $109.16 $0.00 $109.16 $4,390.84 $0.00$0.0045 $354.50 $0.00 $354.50 $4,036.34 $0.00$0.0046 $354.50 $0.00 $354.50 $3,681.84 $0.00$0.0047 $354.50 $0.00 $354.50 $3,327.34 $0.00$0.0048 $354.50 $0.00 $354.50 $2,972.84 $0.00$0.0049 $354.50 $0.00 $354.50 $2,618.34 $0.00$0.0050 $354.50 $0.00 $354.50 $2,263.84 $0.00$0.0051 $354.50 $0.00 $354.50 $1,909.34 $0.00$0.0052 $354.50 $0.00 $354.50 $1,554.84 $0.00$0.0053 $354.50 $0.00 $354.50 $1,200.34 $0.00$0.0054 $354.50 $0.00 $354.50 $845.84 $0.00$0.0055 $354.50 $0.00 $354.50 $491.34 $0.00$0.0056 $491.34 $0.00 $491.34 $0.00 $0.00$0.00

$4,500.00 $0.00 $4,500.0056 $0.00 0


7–50


7–51







(If known)





Column A

Debtor'sIncome

Column B

Spouse'sIncome


3


$ 4,950.00 $ 0.00

4


$ 0.00 $ 0.00



7


8


$ 0.00 $ 0.00





Debtor Spouse




7–52



9


$ 0.00 $ 0.00




13






$ 68,719.00

17

Application of § 1325(b)(4). Check the applicable box and proceed as directed.The amount on Line 15 is less than the amount on Line 16. Check the box for "The applicable commitment period is 3 years" atthe top of page 1 of this statement and continue with this statement.




19





$

Debtor


Spousea.

a. $b. $c.

a. $b. $c. $

$

$ $b. $


7–53





23


The amount on Line 21 is more than the amount on Line 22. Check the box for "Disposable income is determined under §1325(b)(3)" at the top of page 1 of this statement and complete the remaining parts of this statement.



24A

National Standards: food, apparel and services, housekeeping supplies, personal care, and miscellaneous.Enter in Line 24A the "Total" amount from IRS National Standards for Allowable Living Expenses for theapplicable number of persons. (This information is available at www.usdoj.gov/ust/ or from the clerk of thebankruptcy court.) The applicable number of persons is the number that would currently be allowed as exemptionson your federal income tax return, plus the number of any additional dependents whom you support. $ 1,450.00

24B


$ 240.00

25A

Local Standards: housing and utilities; non-mortgage expenses. Enter the amount of the IRS Housing andUtilities Standards; non-mortgage expenses for the applicable county and family size. (This information isavailable at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court). The applicable family size consists ofthe number that would currently be allowed as exemptions on your federal income tax return, plus the number ofany additional dependents whom you support. $ 565.00

25B


$ 0.00

26


$ 0.00


0.00


a1. Allowance per person 60 a2. Allowance per person 144

a. IRS Housing and Utilities Standards; mortgage/rent expense $ 1,904.00b. Average Monthly Payment for any debts secured by your

home, if any, as stated in Line 47 $ 2,485.00c. Net mortgage/rental expense Subtract Line b from Line a.

b1. Number of persons 4 b2. Number of persons 0

c1. Subtotal 240.00 c2. Subtotal


7–54



27A

Local Standards: transportation; vehicle operation/public transportation expense. You are entitled to anexpense allowance in this category regardless of whether you pay the expenses of operating a vehicle andregardless of whether you use public transportation.Check the number of vehicles for which you pay the operating expenses or for which the operating expenses areincluded as a contribution to your household expenses in Line 7. 0 1 2 or more.If you checked 0, enter on Line 27A the "Public Transportation" amount from IRS Local Standards:Transportation. If you checked 1 or 2 or more, enter on Line 27A the "Operating Costs" amount from IRS LocalStandards: Transportation for the applicable number of vehicles in the applicable Metropolitan Statistical Area orCensus Region. (These amounts are available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court.) $ 672.00

27B

Local Standards: transportation; additional public transportation expense. If you pay the operating expensesfor a vehicle and also use public transportation, and you contend that you are entitled to an additional deduction foryour public transportation expenses, enter on Line 27B the "Public Transportation" amount from the IRS LocalStandards: Transportation. (This amount is available at www.usdoj.gov/ust/ or from the clerk of the bankruptcycourt.) $ 0.00

28


$ 0.00

29


$ 0.00

30Other Necessary Expenses: taxes. Enter the total average monthly expense that you actually incur for all federal,state, and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, socialsecurity taxes, and Medicare taxes. Do not include real estate or sales taxes. $ 313.00

31Other Necessary Expenses: involuntary deductions for employment. Enter the total average monthlydeductions that are required for your employment, such as mandatory retirement contributions, union dues, anduniform costs. Do not include discretionary amounts, such as voluntary 401(k) contributions. $ 0.00

32Other Necessary Expenses: life insurance. Enter total average monthly premiums that you actually pay for termlife insurance for yourself. Do not include premiums for insurance on your dependents, for whole life or forany other form of insurance. $ 0.00

33Other Necessary Expenses: court-ordered payments. Enter the total monthly amount that you are required topay pursuant to the order of a court or administrative agency, such as spousal or child support payments. Do notinclude payments on past due obligations included in line 49. $ 0.00

34Other Necessary Expenses: education for employment or for a physically or mentally challenged child.Enter the total average monthly amount that you actually expend for education that is a condition of employmentand for education that is required for a physically or mentally challenged dependent child for whom no publiceducation providing similar services is available. $ 0.00

35 Other Necessary Expenses: childcare. Enter the total average monthly amount that you actually expend onchildcare - such as baby-sitting, day care, nursery and preschool. Do not include other educational payments. $ 0.00


a. IRS Transportation Standards, Ownership Costs $ 517.00


b.Average Monthly Payment for any debts secured by Vehicle2, as stated in Line 47 $ 0.00





7–55



36Other Necessary Expenses: health care. Enter the total average monthly amount that you actually expend onhealth care that is required for the health and welfare of yourself or your dependents, that is not reimbursed byinsurance or paid by a health savings account, and that is in excess of the amount entered in Line 24B. Do notinclude payments for health insurance or health savings accounts listed in Line 39. $ 0.00

37Other Necessary Expenses: telecommunication services. Enter the total average monthly amount that youactually pay for telecommunication services other than your basic home telephone and cell phone service - such aspagers, call waiting, caller id, special long distance, or internet service-to the extent necessary for your health andwelfare or that of your dependents. Do not include any amount previously deducted. $ 0.00

38 Total Expenses Allowed under IRS Standards. Enter the total of Lines 24 through 37. $ 3,240.00


39




$

40Continued contributions to the care of household or family members. Enter the total average actual monthlyexpenses that you will continue to pay for the reasonable and necessary care and support of an elderly, chronicallyill, or disabled member of your household or member of your immediate family who is unable to pay for suchexpenses. Do not include payments listed in Line 34. $ 0.00

41Protection against family violence. Enter the total average reasonably necessary monthly expenses that youactually incur to maintain the safety of your family under the Family Violence Prevention and Services Act orother applicable federal law. The nature of these expenses is required to be kept confidential by the court. $ 0.00

42Home energy costs. Enter the total average monthly amount, in excess of the allowance specified by IRS LocalStandards for Housing and Utilities that you actually expend for home energy costs. You must provide your casetrustee with documentation of your actual expenses, and you must demonstrate that the additional amountclaimed is reasonable and necessary. $ 0.00

43

Education expenses for dependent children under 18. Enter the total average monthly expenses that youactually incur, not to exceed $147.92 per child, for attendance at a private or public elementary or secondaryschool by your dependent children less than 18 years of age. You must provide your case trustee withdocumentation of your actual expenses, and you must explain why the amount claimed is reasonable andnecessary and not already accounted for in the IRS Standards. $ 0.00

44

Additional food and clothing expense. Enter the total average monthly amount by which your food and clothingexpenses exceed the combined allowances for food and clothing (apparel and services) in the IRS NationalStandards, not to exceed 5% of those combined allowances. (This information is available at www.usdoj.gov/ust/or from the clerk of the bankruptcy court.) You must demonstrate that the additional amount claimed isreasonable and necessary. $ 0.00

45Charitable contributions. Enter the amount reasonably necessary for you to expend each month on charitablecontributions in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. §170(c)(1)-(2). Do not include any amount in excess of 15% of your gross monthly income. $ 0.00

46 Total Additional Expense Deductions under § 707(b). Enter the total of Lines 39 through 45. $ 0.00


Health Insurance $ 0.00b. Disability Insurance $ 0.00c. Health Savings Account $ 0.00

a.


7–56




47




a. Big Mortgage Co

123 Indett Ave, Happy Valley,OR 97015(Personal residence) $ 1,454.00 yes no

b. IRS All personal property $ 211.36 yes no

c.Neighborhood CreditUnion

2009 Ford F250 P/U (65,000miles) $ 613.18 yes no

d.Second MortgageCompany


Total: Add Lines $ 3,309.54

48


Name of Creditor Property Securing the Debt 1/60th of the Cure Amount

a. Big Mortgage Co

123 Indett Ave, Happy Valley, OR97015(Personal residence) $ 75.00

Total: Add Lines $ 75.00

49Payments on prepetition priority claims. Enter the total amount, divided by 60, of all priority claims, such aspriority tax, child support and alimony claims, for which you were liable at the time of your bankruptcy filing. Donot include current obligations, such as those set out in Line 33. $ 58.34

50


$ 100.50

51 Total Deductions for Debt Payment. Enter the total of Lines 47 through 50. $ 3,543.38

Subpart D: Total Deductions from Income52 Total of all deductions from income. Enter the total of Lines 38, 46, and 51. $ 6,783.38

Part V. DETERMINATION OF DISPOSABLE INCOME UNDER § 1325(b)(2)53 Total current monthly income. Enter the amount from Line 20. $ 6,200.00

54Support income. Enter the monthly average of any child support payments, foster care payments, or disabilitypayments for a dependent child, reported in Part I, that you received in accordance with applicable nonbankruptcylaw, to the extent reasonably necessary to be expended for such child. $ 0.00

55Qualified retirement deductions. Enter the monthly total of (a) all amounts withheld by your employer fromwages as contributions for qualified retirement plans, as specified in § 541(b)(7) and (b) all required repayments ofloans from retirement plans, as specified in § 362(b)(19). $ 0.00



a. Projected average monthly Chapter 13 plan payment. $ 1,005.00b. Current multiplier for your district as determined under schedules

issued by the Executive Office for United States Trustees. (Thisinformation is available at www.usdoj.gov/ust/ or from the clerk ofthe bankruptcy court.) x 10.00


7–57



56 Total of all deductions allowed under § 707(b)(2). Enter the amount from Line 52. $ 6,783.38

57


$ 1,000.00

58 Total adjustments to determine disposable income. Add the amounts on Lines 54, 55, 56, and 57 and enter theresult. $ 7,783.38

59 Monthly Disposable Income Under § 1325(b)(2). Subtract Line 58 from Line 53 and enter the result. $ -1,583.38


60



61





Total: Add Lines

Nature of special circumstances Amount of Expensea. Business expenses $ 1,000.00b. $c. $



d. $e.

Date: Signature:

Date: Signature

$


7–58








7–59








7–60


7–61


APPEnDiX C—hyPOThETiCAL PArT C FOrMS AnD CALCuLATiOnS














Goldett, IsaacGoldett, Iris

7/6/12

1,750.00month

n/a n/a n/a

Neighborhood CU 2009 Ford F250 P/U $27,660.00* 4.25% $550.00

IRS Personal Property $11,200.00 5% AAFAAF**

Big Mortgage Company Personal Residence $4,500.00 0% AAFA** IRS

YourToys Financing 2 ATVs $9,000.00 4.25% $175.00

Second Mortgage Co. Personal residence $27,500.00*** 4.25% $550.00

*Amount of claim reduced to 89.3% for negative equity and the remainder treated as an unsecured claim.**All available funds after attorney fees.***The collateral value represents the amount of value in the collateral above the senior lien available to secure Second Mortgage Co.'s claim.Debtor moves the court for an order valuing the collateral located at 123 Indett Ave, Happy Valley, OR at $302,500.00

Exhibit C-1 Page 1 of 12

7–62

















None

3,250.00 3,000.00


None

0


7–63

















0.00

n/a

None None N/A

Big Mortgage Company (First mortgage on personal residence)

Ex-Wife Gotdett

None

60Secured creditor cramdown, arrears, priority taxes

n/a


7–64




____________________________________________ ____________________________________________DEBTOR DEBTOR




13. Prior to the end of the 36th month, the Trustee is authorized to file an Order Modifying Plan which adjusts the commitment period to 60months in ¶1(c) and ¶8 of the Plan citing cause for extension of plan as applicable commitment period, depending on the Court's decision inthe re Reed, case number 10-38478.

7/6/12



Big Mortgage Companyc/o Registered Agent

IRS - at all addresses on matrix

Ex-Wife GotdettNo Registered Agent

YourToys Financingc/o Registered Agent

Second Mortgage Co.

/s/ Alice Attorney


7–65



Case #:



Running Total:

$0.00





Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption: 6,000$ Li A t 1 200$Lien Amount: 1,200$ Item 2: A/RValue: 10,000$ Allowed Exemption:Lien Amount: 10,000$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$


19,200$ 6,000$

7–66



Case #:



Running Total:

$0.00





Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1Value: -$ Allowed Exemption: -$ Li A t $Lien Amount: -$ Item 2:Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$


-$ -$

7–67



Case #:



Running Total:

$2,450.00





Subtotal: -$ $Items To Be ValuedCash, bank accounts, stocks:Total Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 1 VolvoValue: 9,200$ Allowed Exemption:Li A t 1 200$Lien Amount: 1,200$ Item 2: A/RValue: 10,000$ Allowed Exemption:Lien Amount: 10,000$ Item 3Value: -$ Allowed Exemption: -$ Lien Amount: -$ Lien Amount: $ Item 4Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 5Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 6Item 6Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 7Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 8Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 9Value: -$ Allowed Exemption: -$ Lien Amount: -$ Item 10Value: -$Value: -$ Allowed Exemption: -$ Lien Amount: -$


19,200$ -$

7–68



Gotdett, I & I Part CFriday, May 11, 2012 Page 1 of 1

Admin Rate: 10.00


$3,532.740.01%Atty. Fees: $3,000.00



%



ME

1 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.002 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.003 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.004 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.005 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.006 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.007 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.008 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.009 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.0010 $1,750.00 $1,575.00 $1,275.00 $300.00 $0.00 $0.00 $0.00$0.00 $0.0011 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0012 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0013 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0014 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0015 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0016 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0017 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0018 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0019 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0020 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0021 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0022 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0023 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0024 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0025 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0026 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0027 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0028 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0029 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0030 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0031 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0032 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0033 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0034 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0035 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0036 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0037 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0038 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0039 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0040 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0041 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0042 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0043 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0044 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0045 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0046 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0047 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0048 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0049 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0050 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0051 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0052 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0053 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0054 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0055 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0056 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0057 $1,750.00 $1,575.00 $1,575.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.0058 $1,750.00 $1,575.00 $1,192.26 $0.00 $382.74 $0.00 $0.00$0.00 $0.0059 $1,750.00 $1,575.00 $0.00 $0.00 $1,575.00 $0.00 $0.00$0.00 $0.0060 $1,750.00 $1,575.00 $0.00 $0.00 $1,542.26 $32.74 $0.00$0.00 $0.00

Total 105,000.00 $94,500.00 $87,967.26 $3,000.00 $3,500.00 $32.74 $0.00$0.00 $0.00


7–69



Neighborhood CU Gotdett, I & I Part C5/10/2012

Claim: $27,600.00Int. Rate: 4.25 %

Claim + Int.: $30,442.45


Claim Paid.: $30,442.45




Balance due: $0.00

1 $550.00 $97.75 $452.25 $27,147.75 $0.00$97.752 $550.00 $96.15 $453.85 $26,693.90 $0.00$96.153 $550.00 $94.54 $455.46 $26,238.44 $0.00$94.544 $550.00 $92.93 $457.07 $25,781.37 $0.00$92.935 $550.00 $91.31 $458.69 $25,322.68 $0.00$91.316 $550.00 $89.68 $460.32 $24,862.36 $0.00$89.687 $550.00 $88.05 $461.95 $24,400.41 $0.00$88.058 $550.00 $86.42 $463.58 $23,936.83 $0.00$86.429 $550.00 $84.78 $465.22 $23,471.61 $0.00$84.78

10 $550.00 $83.13 $466.87 $23,004.74 $0.00$83.1311 $550.00 $81.48 $468.52 $22,536.21 $0.00$81.4812 $550.00 $79.82 $470.18 $22,066.03 $0.00$79.8213 $550.00 $78.15 $471.85 $21,594.18 $0.00$78.1514 $550.00 $76.48 $473.52 $21,120.66 $0.00$76.4815 $550.00 $74.80 $475.20 $20,645.46 $0.00$74.8016 $550.00 $73.12 $476.88 $20,168.58 $0.00$73.1217 $550.00 $71.43 $478.57 $19,690.01 $0.00$71.4318 $550.00 $69.74 $480.26 $19,209.75 $0.00$69.7419 $550.00 $68.03 $481.97 $18,727.78 $0.00$68.0320 $550.00 $66.33 $483.67 $18,244.11 $0.00$66.3321 $550.00 $64.61 $485.39 $17,758.72 $0.00$64.6122 $550.00 $62.90 $487.10 $17,271.62 $0.00$62.9023 $550.00 $61.17 $488.83 $16,782.79 $0.00$61.1724 $550.00 $59.44 $490.56 $16,292.23 $0.00$59.4425 $550.00 $57.70 $492.30 $15,799.93 $0.00$57.7026 $550.00 $55.96 $494.04 $15,305.89 $0.00$55.9627 $550.00 $54.21 $495.79 $14,810.10 $0.00$54.2128 $550.00 $52.45 $497.55 $14,312.55 $0.00$52.4529 $550.00 $50.69 $499.31 $13,813.24 $0.00$50.6930 $550.00 $48.92 $501.08 $13,312.16 $0.00$48.9231 $550.00 $47.15 $502.85 $12,809.31 $0.00$47.1532 $550.00 $45.37 $504.63 $12,304.67 $0.00$45.3733 $550.00 $43.58 $506.42 $11,798.25 $0.00$43.5834 $550.00 $41.79 $508.21 $11,290.04 $0.00$41.7935 $550.00 $39.99 $510.01 $10,780.02 $0.00$39.9936 $550.00 $38.18 $511.82 $10,268.20 $0.00$38.1837 $550.00 $36.37 $513.63 $9,754.57 $0.00$36.3738 $550.00 $34.55 $515.45 $9,239.12 $0.00$34.5539 $550.00 $32.72 $517.28 $8,721.84 $0.00$32.7240 $550.00 $30.89 $519.11 $8,202.73 $0.00$30.8941 $550.00 $29.05 $520.95 $7,681.78 $0.00$29.0542 $550.00 $27.21 $522.79 $7,158.99 $0.00$27.2143 $550.00 $25.35 $524.65 $6,634.34 $0.00$25.3544 $550.00 $23.50 $526.50 $6,107.84 $0.00$23.5045 $550.00 $21.63 $528.37 $5,579.47 $0.00$21.6346 $550.00 $19.76 $530.24 $5,049.23 $0.00$19.7647 $550.00 $17.88 $532.12 $4,517.11 $0.00$17.8848 $550.00 $16.00 $534.00 $3,983.11 $0.00$16.0049 $550.00 $14.11 $535.89 $3,447.22 $0.00$14.1150 $550.00 $12.21 $537.79 $2,909.43 $0.00$12.2151 $550.00 $10.30 $539.70 $2,369.73 $0.00$10.3052 $550.00 $8.39 $541.61 $1,828.12 $0.00$8.3953 $550.00 $6.47 $543.53 $1,284.60 $0.00$6.4754 $550.00 $4.55 $545.45 $739.15 $0.00$4.5555 $550.00 $2.62 $547.38 $191.77 $0.00$2.6256 $192.45 $0.68 $191.77 $0.00 $0.00$0.68

$30,442.45 $2,842.45 $27,600.0056 $2,842.45 0


7–70



IRS Gotdett, I & I Part C5/10/2012

Claim: $11,200.00Int. Rate: 5.00 %

Claim + Int.: $12,751.54


Claim Paid.: $12,751.54




Balance due: $0.00

1 $0.00 $46.67 $0.00 $11,200.00 ($46.67)$0.002 $0.00 $46.67 $0.00 $11,200.00 ($93.33)$0.003 $0.00 $46.67 $0.00 $11,200.00 ($140.00)$0.004 $0.00 $46.67 $0.00 $11,200.00 ($186.67)$0.005 $0.00 $46.67 $0.00 $11,200.00 ($233.33)$0.006 $0.00 $46.67 $0.00 $11,200.00 ($280.00)$0.007 $0.00 $46.67 $0.00 $11,200.00 ($326.67)$0.008 $0.00 $46.67 $0.00 $11,200.00 ($373.33)$0.009 $0.00 $46.67 $0.00 $11,200.00 ($420.00)$0.00

10 $0.00 $46.67 $0.00 $11,200.00 ($466.67)$0.0011 $300.00 $46.67 $0.00 $11,200.00 ($213.33)$300.0012 $300.00 $46.67 $40.00 $11,160.00 $0.00$260.0013 $300.00 $46.50 $253.50 $10,906.50 $0.00$46.5014 $300.00 $45.44 $254.56 $10,651.94 $0.00$45.4415 $300.00 $44.38 $255.62 $10,396.33 $0.00$44.3816 $300.00 $43.32 $256.68 $10,139.65 $0.00$43.3217 $300.00 $42.25 $257.75 $9,881.89 $0.00$42.2518 $300.00 $41.17 $258.83 $9,623.07 $0.00$41.1719 $300.00 $40.10 $259.90 $9,363.16 $0.00$40.1020 $300.00 $39.01 $260.99 $9,102.18 $0.00$39.0121 $300.00 $37.93 $262.07 $8,840.10 $0.00$37.9322 $300.00 $36.83 $263.17 $8,576.94 $0.00$36.8323 $300.00 $35.74 $264.26 $8,312.67 $0.00$35.7424 $300.00 $34.64 $265.36 $8,047.31 $0.00$34.6425 $300.00 $33.53 $266.47 $7,780.84 $0.00$33.5326 $300.00 $32.42 $267.58 $7,513.26 $0.00$32.4227 $300.00 $31.31 $268.69 $7,244.57 $0.00$31.3128 $300.00 $30.19 $269.81 $6,974.75 $0.00$30.1929 $300.00 $29.06 $270.94 $6,703.81 $0.00$29.0630 $300.00 $27.93 $272.07 $6,431.75 $0.00$27.9331 $300.00 $26.80 $273.20 $6,158.55 $0.00$26.8032 $300.00 $25.66 $274.34 $5,884.21 $0.00$25.6633 $300.00 $24.52 $275.48 $5,608.72 $0.00$24.5234 $300.00 $23.37 $276.63 $5,332.09 $0.00$23.3735 $300.00 $22.22 $277.78 $5,054.31 $0.00$22.2236 $300.00 $21.06 $278.94 $4,775.37 $0.00$21.0637 $300.00 $19.90 $280.10 $4,495.27 $0.00$19.9038 $300.00 $18.73 $281.27 $4,214.00 $0.00$18.7339 $300.00 $17.56 $282.44 $3,931.56 $0.00$17.5640 $300.00 $16.38 $283.62 $3,647.94 $0.00$16.3841 $300.00 $15.20 $284.80 $3,363.14 $0.00$15.2042 $300.00 $14.01 $285.99 $3,077.15 $0.00$14.0143 $300.00 $12.82 $287.18 $2,789.97 $0.00$12.8244 $300.00 $11.62 $288.38 $2,501.60 $0.00$11.6245 $300.00 $10.42 $289.58 $2,212.02 $0.00$10.4246 $300.00 $9.22 $290.78 $1,921.24 $0.00$9.2247 $300.00 $8.01 $291.99 $1,629.24 $0.00$8.0148 $300.00 $6.79 $293.21 $1,336.03 $0.00$6.7949 $300.00 $5.57 $294.43 $1,041.60 $0.00$5.5750 $300.00 $4.34 $295.66 $745.94 $0.00$4.3451 $300.00 $3.11 $296.89 $449.05 $0.00$3.1152 $300.00 $1.87 $298.13 $150.92 $0.00$1.8753 $151.54 $0.63 $150.92 $0.00 $0.00$0.63

$12,751.54 $1,551.54 $11,200.0053 $1,551.54 0


7–71



Big Mortgage Company Gotdett, I & I Part C5/10/2012

Claim: $4,500.00Int. Rate: 0.00 %

Claim + Int.: $4,500.00






Balance due: $0.00

1 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.002 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.003 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.004 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.005 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.006 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.007 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.008 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.009 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.00

10 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0011 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0012 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0013 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0014 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0015 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0016 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0017 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0018 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0019 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0020 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0021 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0022 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0023 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0024 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0025 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0026 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0027 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0028 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0029 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0030 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0031 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0032 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0033 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0034 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0035 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0036 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0037 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0038 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0039 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0040 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0041 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0042 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0043 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0044 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0045 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0046 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0047 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0048 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0049 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0050 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0051 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0052 $0.00 $0.00 $0.00 $4,500.00 $0.00$0.0053 $148.46 $0.00 $148.46 $4,351.54 $0.00$0.0054 $300.00 $0.00 $300.00 $4,051.54 $0.00$0.0055 $300.00 $0.00 $300.00 $3,751.54 $0.00$0.0056 $1,137.00 $0.00 $1,137.00 $2,614.54 $0.00$0.0057 $1,422.28 $0.00 $1,422.28 $1,192.26 $0.00$0.0058 $1,192.26 $0.00 $1,192.26 $0.00 $0.00$0.00


7–72



Big Mortgage Company Gotdett, I & I Part C5/10/2012

Claim: $4,500.00Int. Rate: 0.00 %

Claim + Int.: $4,500.00






Balance due: $0.00

$4,500.00 $0.00 $4,500.0058 $0.00 0


7–73



YourToys Financing Gotdett, I & I Part C5/10/2012

Claim: $9,000.00Int. Rate: 4.25 %

Claim + Int.: $9,952.72






Balance due: $0.00

1 $175.00 $31.88 $143.13 $8,856.88 $0.00$31.882 $175.00 $31.37 $143.63 $8,713.24 $0.00$31.373 $175.00 $30.86 $144.14 $8,569.10 $0.00$30.864 $175.00 $30.35 $144.65 $8,424.45 $0.00$30.355 $175.00 $29.84 $145.16 $8,279.29 $0.00$29.846 $175.00 $29.32 $145.68 $8,133.61 $0.00$29.327 $175.00 $28.81 $146.19 $7,987.42 $0.00$28.818 $175.00 $28.29 $146.71 $7,840.71 $0.00$28.299 $175.00 $27.77 $147.23 $7,693.48 $0.00$27.77

10 $175.00 $27.25 $147.75 $7,545.72 $0.00$27.2511 $175.00 $26.72 $148.28 $7,397.45 $0.00$26.7212 $175.00 $26.20 $148.80 $7,248.65 $0.00$26.2013 $175.00 $25.67 $149.33 $7,099.32 $0.00$25.6714 $175.00 $25.14 $149.86 $6,949.46 $0.00$25.1415 $175.00 $24.61 $150.39 $6,799.07 $0.00$24.6116 $175.00 $24.08 $150.92 $6,648.15 $0.00$24.0817 $175.00 $23.55 $151.45 $6,496.70 $0.00$23.5518 $175.00 $23.01 $151.99 $6,344.71 $0.00$23.0119 $175.00 $22.47 $152.53 $6,192.18 $0.00$22.4720 $175.00 $21.93 $153.07 $6,039.11 $0.00$21.9321 $175.00 $21.39 $153.61 $5,885.50 $0.00$21.3922 $175.00 $20.84 $154.16 $5,731.34 $0.00$20.8423 $175.00 $20.30 $154.70 $5,576.64 $0.00$20.3024 $175.00 $19.75 $155.25 $5,421.39 $0.00$19.7525 $175.00 $19.20 $155.80 $5,265.59 $0.00$19.2026 $175.00 $18.65 $156.35 $5,109.24 $0.00$18.6527 $175.00 $18.10 $156.90 $4,952.34 $0.00$18.1028 $175.00 $17.54 $157.46 $4,794.88 $0.00$17.5429 $175.00 $16.98 $158.02 $4,636.86 $0.00$16.9830 $175.00 $16.42 $158.58 $4,478.28 $0.00$16.4231 $175.00 $15.86 $159.14 $4,319.14 $0.00$15.8632 $175.00 $15.30 $159.70 $4,159.44 $0.00$15.3033 $175.00 $14.73 $160.27 $3,999.17 $0.00$14.7334 $175.00 $14.16 $160.84 $3,838.33 $0.00$14.1635 $175.00 $13.59 $161.41 $3,676.93 $0.00$13.5936 $175.00 $13.02 $161.98 $3,514.95 $0.00$13.0237 $175.00 $12.45 $162.55 $3,352.40 $0.00$12.4538 $175.00 $11.87 $163.13 $3,189.27 $0.00$11.8739 $175.00 $11.30 $163.70 $3,025.57 $0.00$11.3040 $175.00 $10.72 $164.28 $2,861.28 $0.00$10.7241 $175.00 $10.13 $164.87 $2,696.42 $0.00$10.1342 $175.00 $9.55 $165.45 $2,530.97 $0.00$9.5543 $175.00 $8.96 $166.04 $2,364.93 $0.00$8.9644 $175.00 $8.38 $166.62 $2,198.31 $0.00$8.3845 $175.00 $7.79 $167.21 $2,031.09 $0.00$7.7946 $175.00 $7.19 $167.81 $1,863.29 $0.00$7.1947 $175.00 $6.60 $168.40 $1,694.89 $0.00$6.6048 $175.00 $6.00 $169.00 $1,525.89 $0.00$6.0049 $175.00 $5.40 $169.60 $1,356.29 $0.00$5.4050 $175.00 $4.80 $170.20 $1,186.10 $0.00$4.8051 $175.00 $4.20 $170.80 $1,015.30 $0.00$4.2052 $175.00 $3.60 $171.40 $843.89 $0.00$3.6053 $175.00 $2.99 $172.01 $671.88 $0.00$2.9954 $175.00 $2.38 $172.62 $499.26 $0.00$2.3855 $175.00 $1.77 $173.23 $326.03 $0.00$1.7756 $175.00 $1.15 $173.85 $152.18 $0.00$1.1557 $152.72 $0.54 $152.18 $0.00 $0.00$0.54

$9,952.72 $952.72 $9,000.0057 $952.72 0


7–74



Second Mortgage Gotdett, I & I Part C5/10/2012

Claim: $27,500.00Int. Rate: 4.25 %

Claim + Int.: $30,320.55


Claim Paid.: $30,320.55




Balance due: $0.00

1 $550.00 $97.40 $452.60 $27,047.40 $0.00$97.402 $550.00 $95.79 $454.21 $26,593.19 $0.00$95.793 $550.00 $94.18 $455.82 $26,137.37 $0.00$94.184 $550.00 $92.57 $457.43 $25,679.94 $0.00$92.575 $550.00 $90.95 $459.05 $25,220.89 $0.00$90.956 $550.00 $89.32 $460.68 $24,760.22 $0.00$89.327 $550.00 $87.69 $462.31 $24,297.91 $0.00$87.698 $550.00 $86.06 $463.94 $23,833.96 $0.00$86.069 $550.00 $84.41 $465.59 $23,368.38 $0.00$84.41

10 $550.00 $82.76 $467.24 $22,901.14 $0.00$82.7611 $550.00 $81.11 $468.89 $22,432.25 $0.00$81.1112 $550.00 $79.45 $470.55 $21,961.69 $0.00$79.4513 $550.00 $77.78 $472.22 $21,489.48 $0.00$77.7814 $550.00 $76.11 $473.89 $21,015.58 $0.00$76.1115 $550.00 $74.43 $475.57 $20,540.01 $0.00$74.4316 $550.00 $72.75 $477.25 $20,062.76 $0.00$72.7517 $550.00 $71.06 $478.94 $19,583.82 $0.00$71.0618 $550.00 $69.36 $480.64 $19,103.18 $0.00$69.3619 $550.00 $67.66 $482.34 $18,620.83 $0.00$67.6620 $550.00 $65.95 $484.05 $18,136.78 $0.00$65.9521 $550.00 $64.23 $485.77 $17,651.02 $0.00$64.2322 $550.00 $62.51 $487.49 $17,163.53 $0.00$62.5123 $550.00 $60.79 $489.21 $16,674.32 $0.00$60.7924 $550.00 $59.05 $490.95 $16,183.37 $0.00$59.0525 $550.00 $57.32 $492.68 $15,690.69 $0.00$57.3226 $550.00 $55.57 $494.43 $15,196.26 $0.00$55.5727 $550.00 $53.82 $496.18 $14,700.08 $0.00$53.8228 $550.00 $52.06 $497.94 $14,202.14 $0.00$52.0629 $550.00 $50.30 $499.70 $13,702.44 $0.00$50.3030 $550.00 $48.53 $501.47 $13,200.97 $0.00$48.5331 $550.00 $46.75 $503.25 $12,697.72 $0.00$46.7532 $550.00 $44.97 $505.03 $12,192.70 $0.00$44.9733 $550.00 $43.18 $506.82 $11,685.88 $0.00$43.1834 $550.00 $41.39 $508.61 $11,177.27 $0.00$41.3935 $550.00 $39.59 $510.41 $10,666.85 $0.00$39.5936 $550.00 $37.78 $512.22 $10,154.63 $0.00$37.7837 $550.00 $35.96 $514.04 $9,640.59 $0.00$35.9638 $550.00 $34.14 $515.86 $9,124.74 $0.00$34.1439 $550.00 $32.32 $517.68 $8,607.06 $0.00$32.3240 $550.00 $30.48 $519.52 $8,087.54 $0.00$30.4841 $550.00 $28.64 $521.36 $7,566.18 $0.00$28.6442 $550.00 $26.80 $523.20 $7,042.98 $0.00$26.8043 $550.00 $24.94 $525.06 $6,517.92 $0.00$24.9444 $550.00 $23.08 $526.92 $5,991.01 $0.00$23.0845 $550.00 $21.22 $528.78 $5,462.22 $0.00$21.2246 $550.00 $19.35 $530.65 $4,931.57 $0.00$19.3547 $550.00 $17.47 $532.53 $4,399.04 $0.00$17.4748 $550.00 $15.58 $534.42 $3,864.62 $0.00$15.5849 $550.00 $13.69 $536.31 $3,328.30 $0.00$13.6950 $550.00 $11.79 $538.21 $2,790.09 $0.00$11.7951 $550.00 $9.88 $540.12 $2,249.97 $0.00$9.8852 $550.00 $7.97 $542.03 $1,707.94 $0.00$7.9753 $550.00 $6.05 $543.95 $1,163.99 $0.00$6.0554 $550.00 $4.12 $545.88 $618.11 $0.00$4.1255 $550.00 $2.19 $547.81 $70.30 $0.00$2.1956 $70.55 $0.25 $70.30 $0.00 $0.00$0.25

$30,320.55 $2,820.55 $27,500.0056 $2,820.55 0


7–75







(If known)





Column A

Debtor'sIncome

Column B

Spouse'sIncome


3


$ 4,950.00 $ 0.00

4


$ 0.00 $ 0.00



7


8


$ 0.00 $ 0.00





Debtor Spouse




7–76



9


$ 0.00 $ 0.00




13






$ 68,719.00

17

Application of § 1325(b)(4). Check the applicable box and proceed as directed.The amount on Line 15 is less than the amount on Line 16. Check the box for "The applicable commitment period is 3 years" atthe top of page 1 of this statement and continue with this statement.




19





$

Debtor


Spousea.

a. $b. $c.

a. $b. $c. $

$

$ $b. $


7–77





23


The amount on Line 21 is more than the amount on Line 22. Check the box for "Disposable income is determined under §1325(b)(3)" at the top of page 1 of this statement and complete the remaining parts of this statement.



24A

National Standards: food, apparel and services, housekeeping supplies, personal care, and miscellaneous.Enter in Line 24A the "Total" amount from IRS National Standards for Allowable Living Expenses for theapplicable number of persons. (This information is available at www.usdoj.gov/ust/ or from the clerk of thebankruptcy court.) The applicable number of persons is the number that would currently be allowed as exemptionson your federal income tax return, plus the number of any additional dependents whom you support. $ 1,450.00

24B


$ 240.00

25A

Local Standards: housing and utilities; non-mortgage expenses. Enter the amount of the IRS Housing andUtilities Standards; non-mortgage expenses for the applicable county and family size. (This information isavailable at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court). The applicable family size consists ofthe number that would currently be allowed as exemptions on your federal income tax return, plus the number ofany additional dependents whom you support. $ 565.00

25B


$ 0.00

26


$ 0.00


0.00


a1. Allowance per person 60 a2. Allowance per person 144

a. IRS Housing and Utilities Standards; mortgage/rent expense $ 1,904.00b. Average Monthly Payment for any debts secured by your

home, if any, as stated in Line 47 $ 2,056.21c. Net mortgage/rental expense Subtract Line b from Line a.

b1. Number of persons 4 b2. Number of persons 0

c1. Subtotal 240.00 c2. Subtotal


7–78



27A

Local Standards: transportation; vehicle operation/public transportation expense. You are entitled to anexpense allowance in this category regardless of whether you pay the expenses of operating a vehicle andregardless of whether you use public transportation.Check the number of vehicles for which you pay the operating expenses or for which the operating expenses areincluded as a contribution to your household expenses in Line 7. 0 1 2 or more.If you checked 0, enter on Line 27A the "Public Transportation" amount from IRS Local Standards:Transportation. If you checked 1 or 2 or more, enter on Line 27A the "Operating Costs" amount from IRS LocalStandards: Transportation for the applicable number of vehicles in the applicable Metropolitan Statistical Area orCensus Region. (These amounts are available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court.) $ 672.00

27B

Local Standards: transportation; additional public transportation expense. If you pay the operating expensesfor a vehicle and also use public transportation, and you contend that you are entitled to an additional deduction foryour public transportation expenses, enter on Line 27B the "Public Transportation" amount from the IRS LocalStandards: Transportation. (This amount is available at www.usdoj.gov/ust/ or from the clerk of the bankruptcycourt.) $ 0.00

28


$ 0.00

29


$ 0.00

30Other Necessary Expenses: taxes. Enter the total average monthly expense that you actually incur for all federal,state, and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, socialsecurity taxes, and Medicare taxes. Do not include real estate or sales taxes. $ 313.00

31Other Necessary Expenses: involuntary deductions for employment. Enter the total average monthlydeductions that are required for your employment, such as mandatory retirement contributions, union dues, anduniform costs. Do not include discretionary amounts, such as voluntary 401(k) contributions. $ 0.00

32Other Necessary Expenses: life insurance. Enter total average monthly premiums that you actually pay for termlife insurance for yourself. Do not include premiums for insurance on your dependents, for whole life or forany other form of insurance. $ 0.00

33Other Necessary Expenses: court-ordered payments. Enter the total monthly amount that you are required topay pursuant to the order of a court or administrative agency, such as spousal or child support payments. Do notinclude payments on past due obligations included in line 49. $ 0.00

34Other Necessary Expenses: education for employment or for a physically or mentally challenged child.Enter the total average monthly amount that you actually expend for education that is a condition of employmentand for education that is required for a physically or mentally challenged dependent child for whom no publiceducation providing similar services is available. $ 0.00

35 Other Necessary Expenses: childcare. Enter the total average monthly amount that you actually expend onchildcare - such as baby-sitting, day care, nursery and preschool. Do not include other educational payments. $ 0.00









7–79



36Other Necessary Expenses: health care. Enter the total average monthly amount that you actually expend onhealth care that is required for the health and welfare of yourself or your dependents, that is not reimbursed byinsurance or paid by a health savings account, and that is in excess of the amount entered in Line 24B. Do notinclude payments for health insurance or health savings accounts listed in Line 39. $ 0.00

37Other Necessary Expenses: telecommunication services. Enter the total average monthly amount that youactually pay for telecommunication services other than your basic home telephone and cell phone service - such aspagers, call waiting, caller id, special long distance, or internet service-to the extent necessary for your health andwelfare or that of your dependents. Do not include any amount previously deducted. $ 0.00

38 Total Expenses Allowed under IRS Standards. Enter the total of Lines 24 through 37. $ 3,240.00


39




$

40Continued contributions to the care of household or family members. Enter the total average actual monthlyexpenses that you will continue to pay for the reasonable and necessary care and support of an elderly, chronicallyill, or disabled member of your household or member of your immediate family who is unable to pay for suchexpenses. Do not include payments listed in Line 34. $ 0.00

41Protection against family violence. Enter the total average reasonably necessary monthly expenses that youactually incur to maintain the safety of your family under the Family Violence Prevention and Services Act orother applicable federal law. The nature of these expenses is required to be kept confidential by the court. $ 0.00

42Home energy costs. Enter the total average monthly amount, in excess of the allowance specified by IRS LocalStandards for Housing and Utilities that you actually expend for home energy costs. You must provide your casetrustee with documentation of your actual expenses, and you must demonstrate that the additional amountclaimed is reasonable and necessary. $ 0.00

43

Education expenses for dependent children under 18. Enter the total average monthly expenses that youactually incur, not to exceed $147.92 per child, for attendance at a private or public elementary or secondaryschool by your dependent children less than 18 years of age. You must provide your case trustee withdocumentation of your actual expenses, and you must explain why the amount claimed is reasonable andnecessary and not already accounted for in the IRS Standards. $ 0.00

44

Additional food and clothing expense. Enter the total average monthly amount by which your food and clothingexpenses exceed the combined allowances for food and clothing (apparel and services) in the IRS NationalStandards, not to exceed 5% of those combined allowances. (This information is available at www.usdoj.gov/ust/or from the clerk of the bankruptcy court.) You must demonstrate that the additional amount claimed isreasonable and necessary. $ 0.00

45Charitable contributions. Enter the amount reasonably necessary for you to expend each month on charitablecontributions in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. §170(c)(1)-(2). Do not include any amount in excess of 15% of your gross monthly income. $ 0.00

46 Total Additional Expense Deductions under § 707(b). Enter the total of Lines 39 through 45. $ 0.00


Health Insurance $ 0.00b. Disability Insurance $ 0.00c. Health Savings Account $ 0.00

a.


7–80




47




a. Big Mortgage Co


b. IRS All personal property $ 211.36 yes no

c.Neighborhood CreditUnion

2009 Ford F250 P/U (65,000miles) $ 613.18 yes no

d.Second MortgageCompany

123 Indett Ave, Happy Valley,OR 97015(Personal residence) $ 602.21 yes no

e. YourToys Financing 2 ATVs $ 166.77 yes no

Total: Add Lines $ 3,047.52

48


Name of Creditor Property Securing the Debt 1/60th of the Cure Amount

a. Big Mortgage Co

123 Indett Ave, Happy Valley, OR97015(Personal residence) $ 75.00

Total: Add Lines $ 75.00

49Payments on prepetition priority claims. Enter the total amount, divided by 60, of all priority claims, such aspriority tax, child support and alimony claims, for which you were liable at the time of your bankruptcy filing. Donot include current obligations, such as those set out in Line 33. $ 58.34

50


$ 175.00

51 Total Deductions for Debt Payment. Enter the total of Lines 47 through 50. $ 3,355.86

Subpart D: Total Deductions from Income52 Total of all deductions from income. Enter the total of Lines 38, 46, and 51. $ 6,595.86

Part V. DETERMINATION OF DISPOSABLE INCOME UNDER § 1325(b)(2)53 Total current monthly income. Enter the amount from Line 20. $ 6,700.00

54Support income. Enter the monthly average of any child support payments, foster care payments, or disabilitypayments for a dependent child, reported in Part I, that you received in accordance with applicable nonbankruptcylaw, to the extent reasonably necessary to be expended for such child. $ 500.00


b. Current multiplier for your district as determined under schedulesissued by the Executive Office for United States Trustees. (Thisinformation is available at www.usdoj.gov/ust/ or from the clerk ofthe bankruptcy court.) x 10.00


a. Projected average monthly Chapter 13 plan payment. $ 1,750.00


7–81



55Qualified retirement deductions. Enter the monthly total of (a) all amounts withheld by your employer fromwages as contributions for qualified retirement plans, as specified in § 541(b)(7) and (b) all required repayments ofloans from retirement plans, as specified in § 362(b)(19). $ 0.00

56 Total of all deductions allowed under § 707(b)(2). Enter the amount from Line 52. $ 6,595.86

57


$ 1,000.00

58 Total adjustments to determine disposable income. Add the amounts on Lines 54, 55, 56, and 57 and enter theresult. $ 8,095.86

59 Monthly Disposable Income Under § 1325(b)(2). Subtract Line 58 from Line 53 and enter the result. $ -1,395.86


60



61





Total: Add Lines

Nature of special circumstances Amount of Expensea. Business expenses $ 1,000.00b. $c. $



d. $e.

Date: Signature:

Date: Signature

$


7–82






Line 7 & 54 - Child support income (including foster care and disability)Source of Income: Child SupportConstant income of $500.00 per month.



7–83








7–84


7–85


:

Lim

its

Clie

nt N

amGotde

tt, I & I

e:Fo

rm D

ate:

8/2

2/19

(cnc

)

File

NCH

1320

12o.

:Pr

opos

ed F

iling

Dat

eA

mou

nts

As

Of:

5/11

/201

2

Sche

dule D: Secured Deb

ts60

8,57

4.00

$

Cred

itor:

Acct:

Claim Amou

ntDescription

Collateral V

alue

Secured Amou

ntUnsecured

Deb

tBig Mortgage Co

275

$

,000

.00

First M

ortgage

$

271,50

0.00

271,50

0.00

$

‐$

Second

Mortgage

150

$

,000

.00

Second

Mortgage

$

271,50

0.00

150,00

0.00

$

150,00

0.00

$

Ex‐W

ife Gotde

tt13

2$

,400

.00

Judgmen

t lien

$

271,50

0.00

132,40

0.00

$

132,40

0.00

$

IRS

11$

,200

.00

Person

al prope

rty

$

19,200

.00

11,200

.00

$

‐$

YourTo

ys Financing

9$ ,000

.00

ATV

's$

6,00

0.00

9,00

0.00

$

3,00

0.00

$

Neighbo

rhoo

d30

$

,974

.00

2009

Ford F250

$

23,500

.00

30,974

.00

$

7,47

4.00

$

‐$

$

‐

‐$

‐$

‐$

$

‐

‐$

‐$

‐$

$

‐

‐$

‐$

Sche

dule E: Priority Deb

t3,50

0.00

$

Sche

dule F: U

nsecured

75,000

.00

$

Eligibility Ana

lysis

Claim Sum

mary

Deb

tTo

tal Secured

:60

5,07

4.00

$

Secured:

1,08

1,40

0.00

$

Total U

ndersecured:

292,87

4.00

$

Unsecured

:36

0,47

5.00

$

Total U

nsecured

:78

,500

.00

$

Total A

gainst Secured

Lim

it:60

5,07

4.00

$

Remaining/(Over) Lim

it:47

6,32

6.00

$

Secured Deb

t Lim

it Status:

Eligible

Total A

gainst Unsecured

Lim

it:37

1,37

4.00

$


it:(10,89

9.00

)$

Unsecured

Deb

t Lim

it Status:

Overlim

it

Exh

ibit

C-3

Pag

e1

of1

7–86


:

Lim

its

Clie

nt N

amGotde

tt, I & I

e:Fo

rm D

ate:

8/2

2/19

(cnc

)

File

NCH

1320

12o.

:Pr

opos

ed F

iling

Dat

eA

mou

nts

As

Of:

5/11

/201

2

Sche

dule D: Secured Deb

ts60

8,57

4.00

$

Cred

itor:

Acct:

Claim Amou

ntDescription

Collateral V

alue

Secured Amou

ntUnsecured

Deb

tBig Mortgage Co

275

$

,000

.00

First M

ortgage

$

302,50

0.00

275,00

0.00

$

‐$

Second

Mortgage

150

$

,000

.00

Second

Mortgage

$

302,50

0.00

150,00

0.00

$

122,50

0.00

$

Ex‐W

ife Gotde

tt13

2$

,400

.00

Judgmen

t lien

$

302,50

0.00

132,40

0.00

$

132,40

0.00

$

IRS

11$

,200

.00

Person

al prope

rty

$

19,200

.00

11,200

.00

$

‐$

GE Capital

9$ ,000

.00

ATV

's$

6,00

0.00

9,00

0.00

$

3,00

0.00

$

Neighbo

rhoo

d30

$

,974

.00

2009

Ford F250

$

23,500

.00

30,974

.00

$

7,47

4.00

$

‐$

$

‐

‐$

‐$

‐$

$

‐

‐$

‐$

‐$

$

‐

‐$

‐$

Sche

dule E: Priority Deb

t3,50

0.00

$

Sche

dule F: U

nsecured

75,000

.00

$

Eligibility Ana

lysis

Claim Sum

mary

Deb

tTo

tal Secured

:60

8,57

4.00

$

Secured:

1,08

1,40

0.00

$

Total U

ndersecured:

265,37

4.00

$

Unsecured

:36

0,47

5.00

$

Total U

nsecured

:78

,500

.00

$

Total A

gainst Secured

Lim

it:60

8,57

4.00

$


it:47

2,82

6.00

$

Secured Deb

t Lim

it Status:

Eligible

Total A

gainst Unsecured

Lim

it:34

3,87

4.00

$


it:16

,601

.00

$

Unsecured

Deb

t Lim

it Status:

Eligible

Exh

ibit

C-4

Pag

e1

of1

7–87


7–88


8–i

Chapter 8

11 u.S.C. ChAPTEr 13—ADJuSTMEnT OF DEBTS OF An inDiViDuAL

WiTh rEGuLAr inCOME

8–ii

Chapter 8—11 u.S.C. Chapter 13—Adjustment of Debts of an individual with regular income

8–1


Page 288 TITLE 11—BANKRUPTCY § 1301

CHAPTER 13—ADJUSTMENT OF DEBTS OF AN INDIVIDUAL WITH REGULAR INCOME

SUBCHAPTER I—OFFICERS, ADMINISTRATION,

AND THE ESTATE

Sec.

1301. Stay of action against codebtor.

1302. Trustee.

1303. Rights and powers of debtor.

1304. Debtor engaged in business.

1305. Filing and allowance of postpetition claims.

1306. Property of the estate.

1307. Conversion or dismissal.

1308. Filing of prepetition tax returns.

SUBCHAPTER II—THE PLAN

1321. Filing of plan.

1322. Contents of plan.

1323. Modification of plan before confirmation.

1324. Confirmation hearing.

1325. Confirmation of plan.

1326. Payments.

1327. Effect of confirmation.

1328. Discharge.

1329. Modification of plan after confirmation.

1330. Revocation of an order of confirmation.

AMENDMENTS

2005—Pub. L. 109–8, title VII, § 716(b)(2), Apr. 20, 2005,

119 Stat. 130, added item 1308.

SUBCHAPTER I—OFFICERS,

ADMINISTRATION, AND THE ESTATE

§ 1301. Stay of action against codebtor

(a) Except as provided in subsections (b) and

(c) of this section, after the order for relief

under this chapter, a creditor may not act, or

commence or continue any civil action, to col-

lect all or any part of a consumer debt of the

debtor from any individual that is liable on such

debt with the debtor, or that secured such debt,

unless—

(1) such individual became liable on or se-

cured such debt in the ordinary course of such

individual’s business; or (2) the case is closed, dismissed, or converted

to a case under chapter 7 or 11 of this title.

(b) A creditor may present a negotiable instru-

ment, and may give notice of dishonor of such

an instrument. (c) On request of a party in interest and after

notice and a hearing, the court shall grant relief

from the stay provided by subsection (a) of this

section with respect to a creditor, to the extent

that— (1) as between the debtor and the individual

protected under subsection (a) of this section,

such individual received the consideration for

the claim held by such creditor; (2) the plan filed by the debtor proposes not

to pay such claim; or (3) such creditor’s interest would be irrep-

arably harmed by continuation of such stay.

(d) Twenty days after the filing of a request

under subsection (c)(2) of this section for relief

from the stay provided by subsection (a) of this

section, such stay is terminated with respect to

the party in interest making such request, un-

less the debtor or any individual that is liable

on such debt with the debtor files and serves

upon such party in interest a written objection

to the taking of the proposed action.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2645; Pub. L.

98–353, title III, §§ 313, 524, July 10, 1984, 98 Stat.

355, 388.)

HISTORICAL AND REVISION NOTES

LEGISLATIVE STATEMENTS

Section 1301 of the House amendment is identical

with the provision contained in section 1301 of the

House bill and adopted by the Senate amendment. Sec-

tion 1301(c)(1) indicates that a basis for lifting the stay

is that the debtor did not receive consideration for the

claim by the creditor, or in other words, the debtor is

really the ‘‘codebtor.’’ As with other sections in title

11, the standard of receiving consideration is a general

rule, but where two co-debtors have agreed to share li-

abilities in a different manner than profits it is the in-

dividual who does not ultimately bear the liability that

is protected by the stay under section 1301.

SENATE REPORT NO. 95–989

Subsection (a) automatically stays the holder of a

claim based on a consumer debt of the chapter 13 debt-

or from acting or proceeding in any way, except as au-

thorized pursuant to subsections (b) and (c), against an

individual or the property of an individual liable with

the chapter 13 debtor, unless such codebtor became lia-

ble in the ordinary course of his business, or unless the

case is closed, dismissed, or converted to another chap-

ter. Under the terms of the agreement with the codebtor

who is not in bankruptcy, the creditor has a right to

collect all payments to the extent they are not made

by the debtor at the time they are due. To the extent

to which a chapter 13 plan does not propose to pay a

creditor his claims, the creditor may obtain relief from

the court from the automatic stay and collect such

claims from the codebtor. Conversely, a codebtor ob-

tains the benefit of any payments made to the creditor

under the plan. If a debtor defaults on scheduled pay-

ments under the plan, then the codebtor would be liable

for the remaining deficiency; otherwise, payments not

made under the plan may never be made by the co-

debtor. The obligation of the codebtor to make the

creditor whole at the time payments are due remains.

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The automatic stay under this section pertains only

to the collection of a consumer debt, defined by section

101(7) of this title to mean a debt incurred by an indi-

vidual primarily for a personal, family, or household

purpose. Therefore, not all debts owed by a chapter 13

debtor will be subject to the stay of the codebtor, par-

ticularly those business debts incurred by an individual

with regular income, as defined by section 101(24) of

this title, engaged in business, that is permitted by vir-

tue of section 109(b) and section 1304 to obtain chapter

13 relief. Subsection (b) excepts the giving of notice of dis-

honor of a negotiable instrument from the reach of the

codebtor stay. Under subsection (c), if the codebtor has property out

of which the creditor’s claim can be satisfied, the court

can grant relief from the stay absent the transfer of a

security interest in that property by the codebtor to

the creditor. Correspondingly, if there is reasonable

cause to believe that property is about to be disposed

of by the codebtor which could be used to satisfy his

obligation to the creditor, the court should lift the stay

to allow the creditor to perfect his rights against such

property. Likewise, if property is subject to rapid de-

preciation or decrease in value the stay should be lifted

to allow the creditor to protect his rights to reach such

property. Otherwise, the creditor’s interest would be ir-

reparably harmed by such stay. Property which could

be used to satisfy the claim could be disposed of or en-

cumbered and placed beyond the reach of the creditor.

The creditor should be allowed to protect his rights to

reach property which could satisfy his claim and pre-

vent its erosion in value, disposal, or encumbrance.

HOUSE REPORT NO. 95–595

This section is new. It is designed to protect a debtor

operating under a chapter 13 individual repayment plan

case by insulating him from indirect pressures from his

creditors exerted through friends or relatives that may

have cosigned an obligation of the debtor. The protec-

tion is limited, however, to ensure that the creditor in-

volved does not lose the benefit of the bargain he made

for a cosigner. He is entitled to full compensation, in-

cluding any interest, fees, and costs provided for by the

agreement under which the debtor obtained his loan.

The creditor is simply required to share with other

creditors to the extent that the debtor will repay him

under the chapter 13 plan. The creditor is delayed, but

his substantive rights are not affected. Subsection (a) is the operative subsection. It stays

action by a creditor after an order for relief under

chapter 13. The creditor may not act, or commence or

continue any civil action, to collect all or any part of

a consumer debt of the debtor from any individual that

is liable on such debt with the debtor, or that has se-

cured the debt, unless the individual became liable or

secured the debt in the ordinary course of his business,

or the case is closed, dismissed, or converted to chapter

7 or 11. Subsection (b) permits the creditor, notwithstanding

the stay, to present a negotiable instrument and to

give notice of dishonor of the instrument, in order to

preserve his substantive rights against the codebtor as

required by applicable nonbankruptcy law. Subsection (c) requires the court to grant relief from

the stay in certain circumstances. The court must

grant relief to the extent that the debtor does not pro-

pose to pay, under the plan, the amount owed to the

creditor. The court must also grant relief to the extent

that the debtor was really the codebtor in the trans-

action, that is, to the extent that the nondebtor party

actually received the consideration for the claim held

by the creditor. Finally, the court must grant relief to

the extent that the creditor’s interest would be irrep-

arably harmed by the stay, for example, where the co-

debtor filed bankruptcy himself, or threatened to leave

the locale, or lost his job.

AMENDMENTS

1984—Subsec. (c)(3). Pub. L. 98–353, § 524, inserted

‘‘continuation of’’ after ‘‘by’’.

Subsec. (d). Pub. L. 98–353, § 313, added subsec. (d).

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98–353 effective with respect

to cases filed 90 days after July 10, 1984, see section

552(a) of Pub. L. 98–353, set out as a note under section

101 of this title.

§ 1302. Trustee

(a) If the United States trustee appoints an in-

dividual under section 586(b) of title 28 to serve

as standing trustee in cases under this chapter

and if such individual qualifies under section 322

of this title, then such individual shall serve as

trustee in the case. Otherwise, the United States

trustee shall appoint one disinterested person to

serve as trustee in the case or the United States

trustee may serve as a trustee in the case. (b) The trustee shall—

(1) perform the duties specified in sections

704(a)(2), 704(a)(3), 704(a)(4), 704(a)(5), 704(a)(6),

704(a)(7), and 704(a)(9) of this title; (2) appear and be heard at any hearing that

concerns— (A) the value of property subject to a lien; (B) confirmation of a plan; or (C) modification of the plan after con-

firmation;

(3) dispose of, under regulations issued by

the Director of the Administrative Office of

the United States Courts, moneys received or

to be received in a case under chapter XIII of

the Bankruptcy Act; (4) advise, other than on legal matters, and

assist the debtor in performance under the

plan; (5) ensure that the debtor commences mak-

ing timely payments under section 1326 of this

title; and (6) if with respect to the debtor there is a

claim for a domestic support obligation, pro-

vide the applicable notice specified in sub-

section (d).

(c) If the debtor is engaged in business, then in

addition to the duties specified in subsection (b)

of this section, the trustee shall perform the du-

ties specified in sections 1106(a)(3) and 1106(a)(4)

of this title. (d)(1) In a case described in subsection (b)(6) to

which subsection (b)(6) applies, the trustee

shall— (A)(i) provide written notice to the holder of

the claim described in subsection (b)(6) of such

claim and of the right of such holder to use

the services of the State child support enforce-

ment agency established under sections 464

and 466 of the Social Security Act for the

State in which such holder resides, for assist-

ance in collecting child support during and

after the case under this title; and (ii) include in the notice provided under

clause (i) the address and telephone number of

such State child support enforcement agency; (B)(i) provide written notice to such State

child support enforcement agency of such

claim; and (ii) include in the notice provided under

clause (i) the name, address, and telephone

number of such holder; and (C) at such time as the debtor is granted a

discharge under section 1328, provide written

8–3



notice to such holder and to such State child

support enforcement agency of— (i) the granting of the discharge; (ii) the last recent known address of the

debtor; (iii) the last recent known name and ad-

dress of the debtor’s employer; and (iv) the name of each creditor that holds a

claim that— (I) is not discharged under paragraph (2)

or (4) of section 523(a); or (II) was reaffirmed by the debtor under

section 524(c).

(2)(A) The holder of a claim described in sub-

section (b)(6) or the State child support enforce-

ment agency of the State in which such holder

resides may request from a creditor described in

paragraph (1)(C)(iv) the last known address of

the debtor.

(B) Notwithstanding any other provision of

law, a creditor that makes a disclosure of a last

known address of a debtor in connection with a

request made under subparagraph (A) shall not

be liable by reason of making that disclosure.



356, 388; Pub. L. 99–554, title II, §§ 228, 283(w), Oct.

27, 1986, 100 Stat. 3103, 3118; Pub. L. 103–394, title

V, § 501(d)(37), Oct. 22, 1994, 108 Stat. 4147; Pub. L.

109–8, title II, § 219(d), Apr. 20, 2005, 119 Stat. 58;

Pub. L. 111–327, § 2(a)(39), Dec. 22, 2010, 124 Stat.

3561.)



Section 1302 of the House amendment adopts a provi-

sion contained in the Senate amendment instead of the

position taken in the House bill. Sections 1302(d) and

(e) are modeled on the standing trustee system con-

tained in the House bill with the court assuming super-

visory functions in districts not under the pilot pro-

gram.


The principal administrator in a chapter 13 case is

the chapter 13 trustee. Experience under chapter XIII of

the Bankruptcy Act [chapter 13 of former title 11] has

shown that the more efficient and effective wage earner

programs have been conducted by standing chapter XIII

trustees who exercise a broad range of responsibilities

in both the design and the effectuation of debtor plans.

Subsection (a) provides administrative flexibility by

permitting the bankruptcy judge to appoint an individ-

ual from the panel of trustees established pursuant to

28 U.S.C. § 604(f) and qualified under section 322 of title

11, either to serve as a standing trustee in all chapter

13 cases filed in the district or a portion thereof, or to

serve in a single case.

Subsection (b)(1) makes it clear that the chapter 13

trustee is no mere disbursing agent of the monies paid

to him by the debtor under the plan [section 1322(a)(1)],

by imposing upon him certain relevant duties of a liq-

uidation trustee prescribed by section 704 of this title.

Subsection (b)(2) requires the chapter 13 trustee to

appear before and be heard by the bankruptcy court

whenever the value of property secured by a lien or the

confirmation or modification of a plan after confirma-

tion as provided by sections 1323–1325 is considered by

the court.

Subsection (b)(3) requires the chapter 13 trustee to

advise and counsel the debtor while under chapter 13,

except on matters more appropriately left to the attor-

ney for the debtor. The chapter 13 trustee must also as-

sist the debtor in performance under the plan by at-

tempting to tailor the requirements of the plan to the

changing needs and circumstances of the debtor during

the extension period.

Subsection (c) imposes on the trustee in a chapter 13

case filed by a debtor engaged in business the inves-

tigative and reporting duties normally required of a

chapter 11 debtor or trustee as prescribed by section

1106(a)(3) and (4).


Subsection (d) gives the trustee an additional duty if

the debtor is engaged in business, as defined in section

1304. The trustee must perform the duties specified in

sections 1106(a)(3) and 1106(a)(4), relating to investiga-

tion of the debtor.

REFERENCES IN TEXT

Chapter XIII of the Bankruptcy Act, referred to in

subsec. (b)(3), is chapter XIII of act July 1, 1898, ch. 541,

as added June 22, 1938, ch. 575, § 1, 52 Stat. 930, which

was classified to chapter 13 (§ 1001 et seq.) of former

Title 11.

Sections 464 and 466 of the Social Security Act, re-

ferred to in subsec. (d)(1)(A)(i), are classified to sections

664 and 666, respectively, of Title 42, The Public Health

and Welfare.

AMENDMENTS

2010—Subsec. (b)(1). Pub. L. 111–327 substituted

‘‘704(a)(2), 704(a)(3), 704(a)(4), 704(a)(5), 704(a)(6), 704(a)(7),

and 704(a)(9)’’ for ‘‘704(2), 704(3), 704(4), 704(5), 704(6),

704(7), and 704(9)’’.

2005—Subsec. (b)(6). Pub. L. 109–8, § 219(d)(1), added

par. (6).

Subsec. (d). Pub. L. 109–8, § 219(d)(2), added subsec. (d).

1994—Subsec. (b)(3). Pub. L. 103–394 struck out ‘‘and’’

at end.

1986—Subsec. (a). Pub. L. 99–554, § 228(1), amended sub-

sec. (a) generally. Prior to amendment, subsec. (a) read

as follows: ‘‘If the court has appointed an individual

under subsection (d) of this section to serve as standing

trustee in cases under this chapter and if such individ-

ual qualifies under section 322 of this title, then such

individual shall serve as trustee in the case. Otherwise,

the court shall appoint a person to serve as trustee in

the case.’’

Subsec. (d). Pub. L. 99–554, § 228(2), struck out subsec.

(d) which read as follows: ‘‘If the number of cases under

this chapter commenced in a particular judicial dis-

trict so warrant, the court may appoint one or more in-

dividuals to serve as standing trustee for such district

in cases under this chapter.’’

Subsec. (e). Pub. L. 99–554, § 283(w), which directed the

amendment of par. (1) by substituting ‘‘set for such in-

dividual’’ for ‘‘fix’’ could not be executed in view of the

repeal of subsec. (e) by section 228(2) of Pub. L. 99–554.

See 1984 Amendment note below.

Pub. L. 99–554, § 228(2), struck out subsec. (e) which

read as follows:

‘‘(1) A court that has appointed an individual under

subsection (d) of this section to serve as standing trust-

ee in cases under this chapter shall set for such individ-

ual—

‘‘(A) a maximum annual compensation, not to ex-

ceed the lowest annual rate of basic pay in effect for

grade GS–16 of the General Schedule prescribed under

section 5332 of title 5; and

‘‘(B) a percentage fee, not to exceed ten percent,

based on such maximum annual compensation and

the actual, necessary expenses incurred by such indi-

vidual as standing trustee.

‘‘(2) Such individual shall collect such percentage fee

from all payments under plans in the cases under this

chapter for which such individual serves as standing

trustee. Such individual shall pay annually to the

Treasury—

‘‘(A) any amount by which the actual compensation

received by such individual exceeds five percent of all

such payments made under plans in cases under this

8–4



chapter for which such individual serves as standing

trustee; and

‘‘(B) any amount by which the percentage fee fixed

under paragraph (1)(B) of this subsection for all such

cases exceeds—

‘‘(i) such individual’s actual compensation for

such cases, as adjusted under subparagraph (A) of

this paragraph; plus

‘‘(ii) the actual, necessary expenses incurred by

such individual as standing trustee in such cases.’’

1984—Subsec. (b)(1). Pub. L. 98–353, § 314(1), substituted

‘‘704(7), and 704(9) of this title’’ for ‘‘and 704(8) of this

title’’.

Subsec. (b)(2). Pub. L. 98–353, § 314(2), struck out

‘‘and’’ at the end.

Subsec. (b)(3) to (5). Pub. L. 98–353, § 525(a), added par.

(3) and redesignated former pars. (3) and (4) as (4) and

(5), respectively.

Pub. L. 98–353, § 314(3), (4), substituted ‘‘; and’’ for the

period at end of par. (3) and added par. (4).

Subsec. (e)(1). Pub. L. 98–353, § 525(b)(1), which di-

rected the amendment of par. (4) by substituting ‘‘set

for such individual’’ for ‘‘fix’’ was executed to par. (1)

as the probable intent of Congress.

Subsec. (e)(1)(A). Pub. L. 98–353, § 525(b)(2), struck out

‘‘for such individual’’ after ‘‘a maximum annual com-

pensation’’.

Subsec. (e)(2)(A). Pub. L. 98–353, § 525(b)(3), substituted

‘‘received by’’ for ‘‘of’’, and ‘‘of all such payments

made’’ for ‘‘upon all payments’’.


Amendment by Pub. L. 109–8 effective 180 days after

Apr. 20, 2005, and not applicable with respect to cases

commenced under this title before such effective date,

except as otherwise provided, see section 1501 of Pub. L.

109–8, set out as a note under section 101 of this title.


Amendment by Pub. L. 103–394 effective Oct. 22, 1994,

and not applicable with respect to cases commenced

under this title before Oct. 22, 1994, see section 702 of

Pub. L. 103–394, set out as a note under section 101 of

this title.


Effective date and applicability of amendment by sec-

tion 228 of Pub. L. 99–554 dependent upon the judicial

district involved, see section 302(d), (e) of Pub. L.

99–554, set out as a note under section 581 of Title 28,

Judiciary and Judicial Procedure.

Amendment by section 283 of Pub. L. 99–554 effective

30 days after Oct. 27, 1986, see section 302(a) of Pub. L.

99–554.





101 of this title.

§ 1303. Rights and powers of debtor

Subject to any limitations on a trustee under

this chapter, the debtor shall have, exclusive of

the trustee, the rights and powers of a trustee

under sections 363(b), 363(d), 363(e), 363(f), and

363(l), of this title.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2646.)



Section 1303 of the House amendment specifies rights

and powers that the debtor has exclusive of the trust-

ees. The section does not imply that the debtor does

not also possess other powers concurrently with the

trustee. For example, although section 1323 is not spec-

ified in section 1303, certainly it is intended that the

debtor has the power to sue and be sued.


A chapter 13 debtor is vested with the identical rights

and powers, and is subject to the same limitations in

regard to their exercise, as those given a liquidation

trustee by virtue of section 363(b), (d), (e), (f), and (h)

of title 11, relating to the sale, use or lease of property.

§ 1304. Debtor engaged in business

(a) A debtor that is self-employed and incurs

trade credit in the production of income from

such employment is engaged in business.

(b) Unless the court orders otherwise, a debtor

engaged in business may operate the business of

the debtor and, subject to any limitations on a

trustee under sections 363(c) and 364 of this title

and to such limitations or conditions as the

court prescribes, shall have, exclusive of the

trustee, the rights and powers of the trustee

under such sections.

(c) A debtor engaged in business shall perform

the duties of the trustee specified in section

704(a)(8) of this title.


98–353, title III, §§ 311(b)(2), 526, July 10, 1984, 98

Stat. 355, 389; Pub. L. 111–327, § 2(a)(40), Dec. 22,

2010, 124 Stat. 3562.)



Section 1304(b) of the House amendment adopts the

approach taken in the comparable section of the Sen-

ate amendment as preferable to the position taken in

the House bill.


Increased access to the simpler, speedier, and less ex-

pensive debtor relief provisions of chapter 13 is accom-

plished by permitting debtors engaged in business to

proceed under chapter 13, provided their income is suf-

ficiently stable and regular to permit compliance with

a chapter 13 plan [section 101(24)] and that the debtor

(or the debtor and spouse) do not owe liquidated, non-

contingent unsecured debts of $50,000, or liquidated,

noncontingent secured debts of $200,000 (§ 109(d)).

Section 1304(a) states that a self-employed individual

who incurs trade credit in the production of income is

a debtor engaged in business.

Subsection (b) empowers a chapter 13 debtor engaged

in business to operate his business, subject to the

rights, powers and limitations that pertain to a trustee

under sections 363(c) and 364 of title 11, and subject to

such further limitations and conditions as the court

may prescribe.

Subsection (c) requires a chapter 13 debtor engaged in

business to file with the court certain financial state-

ments relating to the operation of the business.

AMENDMENTS

2010—Subsec. (c). Pub. L. 111–327 substituted

‘‘704(a)(8)’’ for ‘‘704(8)’’.

1984—Subsec. (b). Pub. L. 98–353, § 526, struck out the

comma after ‘‘of the debtor’’.

Subsec. (c). Pub. L. 98–353, § 311(b)(2), substituted

‘‘section 704(8)’’ for ‘‘section 704(7)’’.





101 of this title.

8–5



§ 1305. Filing and allowance of postpetition claims

(a) A proof of claim may be filed by any entity

that holds a claim against the debtor—

(1) for taxes that become payable to a gov-

ernmental unit while the case is pending; or

(2) that is a consumer debt, that arises after

the date of the order for relief under this chap-

ter, and that is for property or services nec-

essary for the debtor’s performance under the

plan.

(b) Except as provided in subsection (c) of this

section, a claim filed under subsection (a) of this

section shall be allowed or disallowed under sec-

tion 502 of this title, but shall be determined as

of the date such claim arises, and shall be al-

lowed under section 502(a), 502(b), or 502(c) of

this title, or disallowed under section 502(d) or

502(e) of this title, the same as if such claim had

arisen before the date of the filing of the peti-

tion.

(c) A claim filed under subsection (a)(2) of this

section shall be disallowed if the holder of such

claim knew or should have known that prior ap-

proval by the trustee of the debtor’s incurring

the obligation was practicable and was not ob-

tained.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2647.)



Section 1305(a)(2) of the House amendment modifies

similar provisions contained in the House and Senate

bills by restricting application of the paragraph to a

consumer debt. Debts of the debtor that are not con-

sumer debts should not be subjected to section 1305(c)

or section 1328(d) of the House amendment.

Section 1305(b) of the House amendment represents a

technical modification of similar provisions contained

in the House bill and Senate amendment.

The House amendment deletes section 1305(d) of the

Senate amendment as unnecessary. Section 502(b)(1) is

sufficient to disallow any claim to the extent the claim

represents the usurious interest or any other charge

forbidden by applicable law. It is anticipated that the

Rules of Bankruptcy Procedure may require a creditor

filing a proof of claim in a case under chapter 13 to in-

clude an affirmative statement as contemplated by sec-

tion 1305(d) of the Senate amendment.


Section 1305, exclusively applicable in chapter 13

cases, supplements the provisions of sections 501–511 of

title 11, dealing with the filing and allowance of claims.

Sections 501–511 apply in chapter 13 cases by virtue of

section 103(a) of this title. Section 1305(a) provides for

the filing of a proof of claim for taxes and other obliga-

tions incurred after the filing of the chapter 13 case.

Subsection (b) prescribes that section 502 of title 11

governs the allowance of section 1305(a) claims, except

that its standards shall be applied as of the date of al-

lowance of the claim, rather than the date of filing of

the petition. Subsection (c) requires the disallowance

of a postpetition claim for property or services nec-

essary for the debtor’s performance under the plan, if

the holder of the claim knew or should have known

that prior approval by the trustee of the debtor’s incur-

ring of the obligation was practicable and was not ob-

tained.


Subsection (a) permits the filing of a proof of a claim

against the debtor that is for taxes that become pay-

able to a governmental unit while the case is pending,

or that arises after the date of the filing of the petition

for property or services that are necessary for the debt-

or’s performance under the plan, such as auto repairs in

order that the debtor will be able to get to work, or

medical bills. The effect of the latter provision, in

paragraph (2), is to treat postpetition credit extended

to a chapter 13 debtor the same as a prepetition claim

for purposes of allowance, distribution, and so on.

§ 1306. Property of the estate

(a) Property of the estate includes, in addition

to the property specified in section 541 of this

title—

(1) all property of the kind specified in such

section that the debtor acquires after the com-

mencement of the case but before the case is

closed, dismissed, or converted to a case under

chapter 7, 11, or 12 of this title, whichever oc-

curs first; and

(2) earnings from services performed by the

debtor after the commencement of the case

but before the case is closed, dismissed, or

converted to a case under chapter 7, 11, or 12

of this title, whichever occurs first.

(b) Except as provided in a confirmed plan or

order confirming a plan, the debtor shall remain

in possession of all property of the estate.


99–554, title II, § 257(u), Oct. 27, 1986, 100 Stat.

3116.)



Section 1306(a)(2) adopts a provision contained in the

Senate amendment in preference to a similar provision

contained in the House bill.


Section 541 is expressly made applicable to chapter 13

cases by section 103(a). Section 1306 broadens the defini-

tion of property of the estate for chapter 13 purposes to

include all property acquired and all earnings from

services performed by the debtor after the commence-

ment of the case.

Subsection (b) nullifies the effect of section 521(3),

otherwise applicable, by providing that a chapter 13

debtor need not surrender possession of property of the

estate, unless required by the plan or order of con-

firmation.

AMENDMENTS

1986—Subsec. (a). Pub. L. 99–554 inserted reference to

chapter 12 in pars. (1) and (2).



Oct. 27, 1986, but not applicable to cases commenced

under this title before that date, see section 302(a),

(c)(1) of Pub. L. 99–554, set out as a note under section

581 of Title 28, Judiciary and Judicial Procedure.

§ 1307. Conversion or dismissal

(a) The debtor may convert a case under this

chapter to a case under chapter 7 of this title at

any time. Any waiver of the right to convert

under this subsection is unenforceable.

(b) On request of the debtor at any time, if the

case has not been converted under section 706,

1112, or 1208 of this title, the court shall dismiss

a case under this chapter. Any waiver of the

right to dismiss under this subsection is unen-

forceable.

8–6



(c) Except as provided in subsection (f) of this

section, on request of a party in interest or the

United States trustee and after notice and a

hearing, the court may convert a case under this

chapter to a case under chapter 7 of this title, or

may dismiss a case under this chapter, which-

ever is in the best interests of creditors and the

estate, for cause, including— (1) unreasonable delay by the debtor that is

prejudicial to creditors; (2) nonpayment of any fees and charges re-

quired under chapter 123 of title 28; (3) failure to file a plan timely under section

1321 of this title; (4) failure to commence making timely pay-

ments under section 1326 of this title; (5) denial of confirmation of a plan under

section 1325 of this title and denial of a re-

quest made for additional time for filing an-

other plan or a modification of a plan; (6) material default by the debtor with re-

spect to a term of a confirmed plan; (7) revocation of the order of confirmation

under section 1330 of this title, and denial of

confirmation of a modified plan under section

1329 of this title; (8) termination of a confirmed plan by rea-

son of the occurrence of a condition specified

in the plan other than completion of payments

under the plan; (9) only on request of the United States

trustee, failure of the debtor to file, within fif-

teen days, or such additional time as the court

may allow, after the filing of the petition com-

mencing such case, the information required

by paragraph (1) of section 521(a); (10) only on request of the United States

trustee, failure to timely file the information

required by paragraph (2) of section 521(a); or (11) failure of the debtor to pay any domestic

support obligation that first becomes payable

after the date of the filing of the petition.

(d) Except as provided in subsection (f) of this

section, at any time before the confirmation of

a plan under section 1325 of this title, on request

of a party in interest or the United States trust-

ee and after notice and a hearing, the court may

convert a case under this chapter to a case

under chapter 11 or 12 of this title. (e) Upon the failure of the debtor to file a tax

return under section 1308, on request of a party

in interest or the United States trustee and

after notice and a hearing, the court shall dis-

miss a case or convert a case under this chapter

to a case under chapter 7 of this title, whichever

is in the best interest of the creditors and the

estate. (f) The court may not convert a case under

this chapter to a case under chapter 7, 11, or 12

of this title if the debtor is a farmer, unless the

debtor requests such conversion.

(g) Notwithstanding any other provision of

this section, a case may not be converted to a

case under another chapter of this title unless

the debtor may be a debtor under such chapter.



356, 389; Pub. L. 99–554, title II, §§ 229, 257(v), Oct.

27, 1986, 100 Stat. 3103, 3116; Pub. L. 109–8, title II,

§ 213(7), title VII, § 716(c), Apr. 20, 2005, 119 Stat.

53, 130; Pub. L. 111–327, § 2(a)(41), Dec. 22, 2010, 124

Stat. 3562.)



Section 1307(a) is derived from the Senate amend-

ment in preference to a comparable provision contained

in the House bill.


Subsections (a) and (b) confirm, without qualifica-

tion, the rights of a chapter 13 debtor to convert the

case to a liquidating bankruptcy case under chapter 7

of title 11, at any time, or to have the chapter 13 case

dismissed. Waiver of any such right is unenforceable.

Subsection (c) specifies various conditions for the exer-

cise of the power of the court to convert a chapter 13

case to one under chapter 7 or to dismiss the case. Sub-

section (d) deals with the conversion of a chapter 13

case to one under chapter 11. Subsection (e) prohibits

conversion of the chapter 13 case filed by a farmer to

chapter 7 or 11 except at the request of the debtor. No

case is to be converted from chapter 13 to any other

chapter, unless the debtor is an eligible debtor under

the new chapter.


Subsection (f) reinforces section 109 by prohibiting

conversion to a chapter under which the debtor is not

eligible to proceed.

AMENDMENTS

2010—Subsec. (c). Pub. L. 111–327, § 2(a)(41)(A)(i), sub-

stituted ‘‘subsection (f)’’ for ‘‘subsection (e)’’ in intro-

ductory provisions.

Subsec. (c)(9), (10). Pub. L. 111–327, § 2(a)(41)(A)(ii),

(iii), substituted ‘‘521(a)’’ for ‘‘521’’.

Subsec. (d). Pub. L. 111–327, § 2(a)(41)(B), substituted

‘‘subsection (f)’’ for ‘‘subsection (e)’’.

2005—Subsec. (c)(11). Pub. L. 109–8, § 213(7), added par.

(11).

Subsecs. (e) to (g). Pub. L. 109–8, § 716(c), added subsec.

(e) and redesignated former subsecs. (e) and (f) as (f)

and (g), respectively.

1986—Subsec. (b). Pub. L. 99–554, § 257(v)(1), inserted

reference to section 1208 of this title.

Subsec. (c). Pub. L. 99–554, § 229(1)(A), inserted ‘‘or the

United States trustee’’ after ‘‘party in interest’’ in pro-

visions preceding par. (1).

Subsec. (c)(9), (10). Pub. L. 99–554, § 229(1)(B)–(D),

added pars. (9) and (10).

Subsec. (d). Pub. L. 99–554, § 257(v)(2), inserted ref-

erence to chapter 12.

Pub. L. 99–554, § 229(2), inserted ‘‘or the United States

trustee’’ after ‘‘party in interest’’.

Subsec. (e). Pub. L. 99–554, § 257(v)(3), inserted ref-

erence to chapter 12.

1984—Subsec. (b). Pub. L. 98–353, § 527(a), inserted a

comma after ‘‘time’’.

Subsec. (c)(4). Pub. L. 98–353, § 315(2), added par. (4).

Former par. (4) redesignated (5).

Subsec. (c)(5). Pub. L. 98–353, §§ 315(1), 527(b)(1), redes-

ignated former par. (4) as (5) and inserted ‘‘a request

made for’’ before ‘‘additional’’. Former par. (5) redesig-

nated (6).

Subsec. (c)(6). Pub. L. 98–353, § 315(1), redesignated

former par. (5) as (6). Former par. (6) redesignated (7).


ignated former par. (6) as (7) and substituted ‘‘or’’ for

‘‘and’’. Former par. (7) redesignated (8).


ignated former par. (7) as (8) and inserted ‘‘other than

completion of payments under the plan’’ after ‘‘in the

plan’’.




8–7











Judiciary and Judicial Procedure. Amendment by section 257 of Pub. L. 99–554 effective

30 days after Oct. 27, 1986, but not applicable to cases

commenced under this title before that date, see sec-

tion 302(a), (c)(1) of Pub. L. 99–554.





101 of this title.

§ 1308. Filing of prepetition tax returns

(a) Not later than the day before the date on

which the meeting of the creditors is first sched-

uled to be held under section 341(a), if the debtor

was required to file a tax return under applica-

ble nonbankruptcy law, the debtor shall file

with appropriate tax authorities all tax returns

for all taxable periods ending during the 4-year

period ending on the date of the filing of the pe-

tition. (b)(1) Subject to paragraph (2), if the tax re-

turns required by subsection (a) have not been

filed by the date on which the meeting of credi-

tors is first scheduled to be held under section

341(a), the trustee may hold open that meeting

for a reasonable period of time to allow the

debtor an additional period of time to file any

unfiled returns, but such additional period of

time shall not extend beyond— (A) for any return that is past due as of the

date of the filing of the petition, the date that

is 120 days after the date of that meeting; or (B) for any return that is not past due as of

the date of the filing of the petition, the later

of— (i) the date that is 120 days after the date

of that meeting; or (ii) the date on which the return is due

under the last automatic extension of time

for filing that return to which the debtor is

entitled, and for which request is timely

made, in accordance with applicable non-

bankruptcy law.

(2) After notice and a hearing, and order en-

tered before the tolling of any applicable filing

period determined under paragraph (1), if the

debtor demonstrates by a preponderance of the

evidence that the failure to file a return as re-

quired under paragraph (1) is attributable to cir-

cumstances beyond the control of the debtor,

the court may extend the filing period estab-

lished by the trustee under paragraph (1) for— (A) a period of not more than 30 days for re-

turns described in paragraph (1)(A); and (B) a period not to extend after the applica-

ble extended due date for a return described in

paragraph (1)(B).

(c) For purposes of this section, the term ‘‘re-

turn’’ includes a return prepared pursuant to

subsection (a) or (b) of section 6020 of the Inter-

nal Revenue Code of 1986, or a similar State or

local law, or a written stipulation to a judgment

or a final order entered by a nonbankruptcy tri-

bunal.

(Added Pub. L. 109–8, title VII, § 716(b)(1), Apr. 20,

2005, 119 Stat. 129; amended Pub. L. 111–327,

§ 2(a)(42), Dec. 22, 2010, 124 Stat. 3562.)

REFERENCES IN TEXT

Section 6020 of the Internal Revenue Code of 1986, re-

ferred to in subsec. (c), is classified to section 6020 of

Title 26, Internal Revenue Code.

AMENDMENTS

2010—Subsec. (b)(2). Pub. L. 111–327, § 2(a)(42)(C), sub-

stituted ‘‘paragraph (1)’’ for ‘‘this subsection’’ wherever

appearing in introductory provisions.

Subsec. (b)(2)(A). Pub. L. 111–327, § 2(a)(42)(A), sub-

stituted ‘‘paragraph (1)(A)’’ for ‘‘paragraph (1)’’.

Subsec. (b)(2)(B). Pub. L. 111–327, § 2(a)(42)(B), sub-

stituted ‘‘paragraph (1)(B)’’ for ‘‘paragraph (2)’’.

EFFECTIVE DATE

Section effective 180 days after Apr. 20, 2005, and not

applicable with respect to cases commenced under this

title before such effective date, except as otherwise

provided, see section 1501 of Pub. L. 109–8, set out as an

Effective Date of 2005 Amendment note under section

101 of this title.

SUBCHAPTER II—THE PLAN

§ 1321. Filing of plan

The debtor shall file a plan.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2648.)



Chapter 13 contemplates the filing of a plan only by

the debtor.

§ 1322. Contents of plan

(a) The plan—

(1) shall provide for the submission of all or

such portion of future earnings or other future

income of the debtor to the supervision and

control of the trustee as is necessary for the

execution of the plan;

(2) shall provide for the full payment, in de-

ferred cash payments, of all claims entitled to

priority under section 507 of this title, unless

the holder of a particular claim agrees to a

different treatment of such claim;

(3) if the plan classifies claims, shall provide

the same treatment for each claim within a

particular class; and

(4) notwithstanding any other provision of

this section, may provide for less than full

payment of all amounts owed for a claim enti-

tled to priority under section 507(a)(1)(B) only

if the plan provides that all of the debtor’s

projected disposable income for a 5-year period

beginning on the date that the first payment

is due under the plan will be applied to make

payments under the plan.

(b) Subject to subsections (a) and (c) of this

section, the plan may—

(1) designate a class or classes of unsecured

claims, as provided in section 1122 of this title,

but may not discriminate unfairly against any

class so designated; however, such plan may

treat claims for a consumer debt of the debtor

8–8



if an individual is liable on such consumer

debt with the debtor differently than other un-

secured claims; (2) modify the rights of holders of secured

claims, other than a claim secured only by a

security interest in real property that is the

debtor’s principal residence, or of holders of

unsecured claims, or leave unaffected the

rights of holders of any class of claims; (3) provide for the curing or waiving of any

default; (4) provide for payments on any unsecured

claim to be made concurrently with payments

on any secured claim or any other unsecured

claim; (5) notwithstanding paragraph (2) of this

subsection, provide for the curing of any de-

fault within a reasonable time and mainte-

nance of payments while the case is pending

on any unsecured claim or secured claim on

which the last payment is due after the date

on which the final payment under the plan is

due; (6) provide for the payment of all or any part

of any claim allowed under section 1305 of this

title; (7) subject to section 365 of this title, provide

for the assumption, rejection, or assignment

of any executory contract or unexpired lease

of the debtor not previously rejected under

such section; (8) provide for the payment of all or part of

a claim against the debtor from property of

the estate or property of the debtor; (9) provide for the vesting of property of the

estate, on confirmation of the plan or at a

later time, in the debtor or in any other en-

tity; (10) provide for the payment of interest ac-

cruing after the date of the filing of the peti-

tion on unsecured claims that are non-

dischargeable under section 1328(a), except

that such interest may be paid only to the ex-

tent that the debtor has disposable income

available to pay such interest after making

provision for full payment of all allowed

claims; and (11) include any other appropriate provision

not inconsistent with this title.

(c) Notwithstanding subsection (b)(2) and ap-

plicable nonbankruptcy law— (1) a default with respect to, or that gave

rise to, a lien on the debtor’s principal resi-

dence may be cured under paragraph (3) or (5)

of subsection (b) until such residence is sold at

a foreclosure sale that is conducted in accord-

ance with applicable nonbankruptcy law; and (2) in a case in which the last payment on

the original payment schedule for a claim se-

cured only by a security interest in real prop-

erty that is the debtor’s principal residence is

due before the date on which the final pay-

ment under the plan is due, the plan may pro-

vide for the payment of the claim as modified

pursuant to section 1325(a)(5) of this title.

(d)(1) If the current monthly income of the

debtor and the debtor’s spouse combined, when

multiplied by 12, is not less than— (A) in the case of a debtor in a household of

1 person, the median family income of the ap-

plicable State for 1 earner;

(B) in the case of a debtor in a household of

2, 3, or 4 individuals, the highest median fam-

ily income of the applicable State for a family

of the same number or fewer individuals; or

(C) in the case of a debtor in a household ex-

ceeding 4 individuals, the highest median fam-


of 4 or fewer individuals, plus $525 per month

for each individual in excess of 4,

the plan may not provide for payments over a

period that is longer than 5 years.

(2) If the current monthly income of the debt-

or and the debtor’s spouse combined, when mul-

tiplied by 12, is less than—

(A) in the case of a debtor in a household of


plicable State for 1 earner;

(B) in the case of a debtor in a household of



of the same number or fewer individuals; or

(C) in the case of a debtor in a household ex-




for each individual in excess of 4,

the plan may not provide for payments over a

period that is longer than 3 years, unless the

court, for cause, approves a longer period, but

the court may not approve a period that is

longer than 5 years.

(e) Notwithstanding subsection (b)(2) of this

section and sections 506(b) and 1325(a)(5) of this

title, if it is proposed in a plan to cure a default,

the amount necessary to cure the default, shall

be determined in accordance with the underly-

ing agreement and applicable nonbankruptcy

law.

(f) A plan may not materially alter the terms

of a loan described in section 362(b)(19) and any

amounts required to repay such loan shall not

constitute ‘‘disposable income’’ under section

1325.



356, 389; Pub. L. 103–394, title III, §§ 301, 305(c),

Oct. 22, 1994, 108 Stat. 4131, 4134; Pub. L. 109–8,

title II, §§ 213(8), (9), 224(d), title III, § 318(1), Apr.

20, 2005, 119 Stat. 53, 65, 93; Pub. L. 111–327,

§ 2(a)(43), Dec. 22, 2010, 124 Stat. 3562.)

ADJUSTMENT OF DOLLAR AMOUNTS

For adjustment of certain dollar amounts

specified in this section, that is not reflected in

text, see Adjustment of Dollar Amounts note

below.



Section 1322(b)(2) of the House amendment represents

a compromise agreement between similar provisions in

the House bill and Senate amendment. Under the House

amendment, the plan may modify the rights of holders

of secured claims other than a claim secured by a secu-

rity interest in real property that is the debtor’s prin-

cipal residence. It is intended that a claim secured by

the debtor’s principal residence may be treated with

under section 1322(b)(5) of the House amendment.

Section 1322(c) adopts a 5-year period derived from

the House bill in preference to a 4-year period con-

8–9



tained in the Senate amendment. A conforming change

is made in section 1329(c) adopting the provision in the

House bill in preference to a comparable provision in

the Senate amendment.

Tax payments in wage earner plans: The House bill

provided that a wage earner plan had to provide that

all priority claims would be paid in full. The Senate

amendment contained a special rule in section 1325(c)

requiring that Federal tax claims must be paid in cash,

but that such tax claims can be paid in deferred cash

installments under the general rules applicable to the

payment of debts in a wage earner plan, unless the In-

ternal Revenue Service negotiates with the debtor for

some different medium or time for payment of the tax

liability.

The House bill adopts the substance of the Senate

amendment rule under section 1322(a)(2) of the House

amendment. A wage earner plan must provide for full

payment in deferred cash payments, of all priority

claims, unless the holder of a particular claim agrees

with a different treatment of such claim.


Chapter 13 is designed to serve as a flexible vehicle

for the repayment of part or all of the allowed claims

of the debtor. Section 1322 emphasizes that purpose by

fixing a minimum of mandatory plan provisions.

Subsection (a) requires that the plan submit what-

ever portion of the future income of the debtor is nec-

essary to implement the plan to the control of the

trustee, mandates payment in full of all section 507 pri-

ority claims, and requires identical treatment for all

claims of a particular class.

Subsection (b) permits a chapter 13 plan to (1) divide

unsecured claims not entitled to priority under section

507 into classes in the manner authorized for chapter 11

claims; (2) modify the rights of holders of secured and

unsecured claims, except claims wholly secured by real

estate mortgages; (3) cure or waive any default; (4) pro-

pose payments on unsecured claims concurrently with

payments on any secured claim or any other class of

unsecured claims; (5) provide for curing any default on

any secured or unsecured claim on which the final pay-

ment is due after the proposed final payment under the

plan; (6) provide for payment of any allowed post-

petition claim; (7) assume or reject any previously

unrejected executory contract or unexpired lease of the

debtor; (8) propose the payment of all or any part of

any claim from property of the estate or of the debtor;

(9) provide for the vesting of property of the estate; and

(10) include any other provision not inconsistent with

other provisions of title 11.

Subsection (c) limits the payment period under the

plan to 3 years, except that a 4–year payment period

may be permitted by the court.

AMENDMENTS

2010—Subsec. (a). Pub. L. 111–327, § 2(a)(43)(A), struck

out ‘‘shall’’ after ‘‘plan’’ in introductory provisions.

Subsec. (a)(1) to (3). Pub. L. 111–327, § 2(a)(43)(B)–(D),

inserted ‘‘shall’’ before ‘‘provide’’.

Subsec. (a)(4). Pub. L. 111–327, § 2(a)(43)(E), struck out

‘‘a plan’’ before ‘‘may provide’’.

2005—Subsec. (a)(4). Pub. L. 109–8, § 213(8), added par.

(4).

Subsec. (b)(10), (11). Pub. L. 109–8, § 213(9), added par.

(10) and redesignated former par. (10) as (11).

Subsec. (d). Pub. L. 109–8, § 318(1), amended subsec. (d)

generally. Prior to amendment, subsec. (d) read as fol-

lows: ‘‘The plan may not provide for payments over a

period that is longer than three years, unless the court,

for cause, approves a longer period, but the court may

not approve a period that is longer than five years.’’

Subsec. (f). Pub. L. 109–8, § 224(d), added subsec. (f).

1994—Subsecs. (c), (d). Pub. L. 103–394, § 301, added sub-

sec. (c) and redesignated former subsec. (c) as (d).

Subsec. (e). Pub. L. 103–394, § 305(c), added subsec. (e).

1984—Subsec. (a)(2). Pub. L. 98–353, § 528(a), inserted a

comma after ‘‘payments’’.

Subsec. (b)(1). Pub. L. 98–353, § 316, inserted

‘‘; however, such plan may treat claims for a consumer

debt of the debtor if an individual is liable on such con-

sumer debt with the debtor differently than other unse-

cured claims’’. Subsec. (b)(2). Pub. L. 98–353, § 528(b)(1), inserted ‘‘, or

leave unaffected the rights of the holders of any class

of claims’’. Subsec. (b)(4). Pub. L. 98–353, § 528(b)(2), inserted

‘‘other’’ after ‘‘claim or any’’. Subsec. (b)(7). Pub. L. 98–353, § 528(b)(3), inserted ‘‘sub-

ject to section 365 of this title,’’ before ‘‘provide’’, sub-

stituted ‘‘, rejection, or assignment’’ for ‘‘or rejec-

tion’’, and substituted ‘‘under such section’’ for ‘‘under

section 365 of this title’’. Subsec. (b)(8). Pub. L. 98–353, § 528(b)(4), struck out

‘‘any’’ before ‘‘part of a claim’’.









Oct. 22, 1994, and not applicable with respect to cases

commenced under this title before Oct. 22, 1994, and

amendment by section 305(c) of Pub. L. 103–394 effective

Oct. 22, 1994, and applicable only to agreements entered

into after Oct. 22, 1994, see section 702 of Pub. L. 103–394,

set out as a note under section 101 of this title.





101 of this title.


The dollar amounts specified in this section were ad-

justed by notices of the Judicial Conference of the

United States pursuant to section 104 of this title as

follows: By notice dated Feb. 19, 2010, 75 F.R. 8747, effective

Apr. 1, 2010, in subsec. (d)(1)(C), (2)(C), dollar amount

‘‘575’’ was adjusted to ‘‘625’’. See notice of the Judicial

Conference of the United States set out as a note under

section 104 of this title. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective

Apr. 1, 2007, in subsec. (d), dollar amount ‘‘525’’ was ad-

justed to ‘‘575’’ each time it appeared.

§ 1323. Modification of plan before confirmation

(a) The debtor may modify the plan at any

time before confirmation, but may not modify

the plan so that the plan as modified fails to

meet the requirements of section 1322 of this

title. (b) After the debtor files a modification under

this section, the plan as modified becomes the

plan. (c) Any holder of a secured claim that has ac-

cepted or rejected the plan is deemed to have ac-

cepted or rejected, as the case may be, the plan

as modified, unless the modification provides for

a change in the rights of such holder from what

such rights were under the plan before modifica-

tion, and such holder changes such holder’s pre-

vious acceptance or rejection.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2649.)



The debtor is permitted to modify the plan before

confirmation without court approval so long as the

8–10



modified plan, which becomes the plan on filing, com-

plies with the requirements of section 1322.

The original acceptance or rejection of a plan by the

holder of a secured claim remains binding unless the

modified plan changes the rights of the holder and the

holder withdraws or alters its earlier acceptance or re-

jection.

§ 1324. Confirmation hearing

(a) Except as provided in subsection (b) and

after notice, the court shall hold a hearing on

confirmation of the plan. A party in interest

may object to confirmation of the plan.

(b) The hearing on confirmation of the plan

may be held not earlier than 20 days and not

later than 45 days after the date of the meeting

of creditors under section 341(a), unless the

court determines that it would be in the best in-

terests of the creditors and the estate to hold

such hearing at an earlier date and there is no

objection to such earlier date.


98–353, title III, § 529, July 10, 1984, 98 Stat. 389;

Pub. L. 99–554, title II, § 283(x), Oct. 27, 1986, 100

Stat. 3118; Pub. L. 109–8, title III, § 317, Apr. 20,

2005, 119 Stat. 92.)



Any party in interest may object to the confirmation

of a plan, as distinguished from merely rejecting a

plan. An objection to confirmation is predicated on

failure of the plan or the procedures employed prior to

confirmation to conform with the requirements of

chapter 13. The bankruptcy judge is required to provide

notice and an opportunity for hearing any such objec-

tion to confirmation.

AMENDMENTS

2005—Pub. L. 109–8 designated existing provisions as

subsec. (a), substituted ‘‘Except as provided in sub-

section (b) and after’’ for ‘‘After’’, and added subsec.

(b).

1986—Pub. L. 99–554 struck out ‘‘the’’ after ‘‘object

to’’.

1984—Pub. L. 98–353 struck out ‘‘the’’ before ‘‘con-

firmation of the plan’’.









Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out

as a note under section 581 of Title 28, Judiciary and

Judicial Procedure.





101 of this title.

§ 1325. Confirmation of plan

(a) Except as provided in subsection (b), the

court shall confirm a plan if—

(1) The plan complies with the provisions of

this chapter and with the other applicable pro-

visions of this title;

(2) any fee, charge, or amount required under

chapter 123 of title 28, or by the plan, to be

paid before confirmation, has been paid; (3) the plan has been proposed in good faith

and not by any means forbidden by law; (4) the value, as of the effective date of the

plan, of property to be distributed under the

plan on account of each allowed unsecured

claim is not less than the amount that would

be paid on such claim if the estate of the debt-

or were liquidated under chapter 7 of this title

on such date; (5) with respect to each allowed secured

claim provided for by the plan— (A) the holder of such claim has accepted

the plan; (B)(i) the plan provides that—

(I) the holder of such claim retain the

lien securing such claim until the earlier

of— (aa) the payment of the underlying

debt determined under nonbankruptcy

law; or (bb) discharge under section 1328; and

(II) if the case under this chapter is dis-

missed or converted without completion of

the plan, such lien shall also be retained

by such holder to the extent recognized by

applicable nonbankruptcy law;

(ii) the value, as of the effective date of

the plan, of property to be distributed under

the plan on account of such claim is not less

than the allowed amount of such claim; and (iii) if—

(I) property to be distributed pursuant to

this subsection is in the form of periodic

payments, such payments shall be in equal

monthly amounts; and (II) the holder of the claim is secured by

personal property, the amount of such pay-

ments shall not be less than an amount

sufficient to provide to the holder of such

claim adequate protection during the pe-

riod of the plan; or

(C) the debtor surrenders the property se-

curing such claim to such holder;

(6) the debtor will be able to make all pay-

ments under the plan and to comply with the

plan; (7) the action of the debtor in filing the peti-

tion was in good faith; (8) the debtor has paid all amounts that are

required to be paid under a domestic support

obligation and that first become payable after

the date of the filing of the petition if the

debtor is required by a judicial or administra-

tive order, or by statute, to pay such domestic

support obligation; and (9) the debtor has filed all applicable Fed-

eral, State, and local tax returns as required

by section 1308.

For purposes of paragraph (5), section 506 shall

not apply to a claim described in that paragraph

if the creditor has a purchase money security in-

terest securing the debt that is the subject of

the claim, the debt was incurred within the 910-

day period preceding the date of the filing of the

petition, and the collateral for that debt con-

sists of a motor vehicle (as defined in section

8–11



30102 of title 49) acquired for the personal use of

the debtor, or if collateral for that debt consists

of any other thing of value, if the debt was in-

curred during the 1-year period preceding that

filing. (b)(1) If the trustee or the holder of an allowed

unsecured claim objects to the confirmation of

the plan, then the court may not approve the

plan unless, as of the effective date of the plan— (A) the value of the property to be distrib-

uted under the plan on account of such claim

is not less than the amount of such claim; or (B) the plan provides that all of the debtor’s

projected disposable income to be received in

the applicable commitment period beginning

on the date that the first payment is due

under the plan will be applied to make pay-

ments to unsecured creditors under the plan.

(2) For purposes of this subsection, the term

‘‘disposable income’’ means current monthly in-

come received by the debtor (other than child

support payments, foster care payments, or dis-

ability payments for a dependent child made in

accordance with applicable nonbankruptcy law

to the extent reasonably necessary to be ex-

pended for such child) less amounts reasonably

necessary to be expended— (A)(i) for the maintenance or support of the

debtor or a dependent of the debtor, or for a

domestic support obligation, that first be-

comes payable after the date the petition is

filed; and (ii) for charitable contributions (that meet

the definition of ‘‘charitable contribution’’

under section 548(d)(3)) to a qualified religious

or charitable entity or organization (as de-

fined in section 548(d)(4)) in an amount not to

exceed 15 percent of gross income of the debtor

for the year in which the contributions are

made; and (B) if the debtor is engaged in business, for

the payment of expenditures necessary for the

continuation, preservation, and operation of

such business.

(3) Amounts reasonably necessary to be ex-

pended under paragraph (2), other than subpara-

graph (A)(ii) of paragraph (2), shall be deter-

mined in accordance with subparagraphs (A) and

(B) of section 707(b)(2), if the debtor has current

monthly income, when multiplied by 12, greater

than— (A) in the case of a debtor in a household of


plicable State for 1 earner; (B) in the case of a debtor in a household of



of the same number or fewer individuals; or (C) in the case of a debtor in a household ex-




for each individual in excess of 4.

(4) For purposes of this subsection, the ‘‘appli-

cable commitment period’’— (A) subject to subparagraph (B), shall be—

(i) 3 years; or (ii) not less than 5 years, if the current

monthly income of the debtor and the debt-

or’s spouse combined, when multiplied by 12,

is not less than—

(I) in the case of a debtor in a household

of 1 person, the median family income of

the applicable State for 1 earner;

(II) in the case of a debtor in a household

of 2, 3, or 4 individuals, the highest median

family income of the applicable State for a

family of the same number or fewer indi-

viduals; or

(III) in the case of a debtor in a house-

hold exceeding 4 individuals, the highest

median family income of the applicable

State for a family of 4 or fewer individuals,

plus $525 per month for each individual in

excess of 4; and

(B) may be less than 3 or 5 years, whichever

is applicable under subparagraph (A), but only

if the plan provides for payment in full of all

allowed unsecured claims over a shorter pe-

riod.

(c) After confirmation of a plan, the court may

order any entity from whom the debtor receives

income to pay all or any part of such income to

the trustee.



356, 389; Pub. L. 99–554, title II, § 283(y), Oct. 27,

1986, 100 Stat. 3118; Pub. L. 105–183, § 4(a), June

19, 1998, 112 Stat. 518; Pub. L. 109–8, title I,

§ 102(g), (h), title II, § 213(10), title III, §§ 306(a),

(b), 309(c)(1), 318(2), (3), title VII, § 716(a), Apr. 20,

2005, 119 Stat. 33, 53, 80, 83, 93, 129; Pub. L.

109–439, § 2, Dec. 20, 2006, 120 Stat. 3285; Pub. L.

111–327, § 2(a)(44), Dec. 22, 2010, 124 Stat. 3562.)





below.



Section 1325(a)(5)(B) of the House amendment modi-

fies the House bill and Senate amendment to signifi-

cantly protect secured creditors in chapter 13. Unless

the secured creditor accepts the plan, the plan must

provide that the secured creditor retain the lien secur-

ing the creditor’s allowed secured claim in addition to

receiving value, as of the effective date of the plan of

property to be distributed under the plan on account of

the claim not less than the allowed amount of the

claim. To this extent, a secured creditor in a case under

chapter 13 is treated identically with a recourse credi-

tor under section 1111(b)(1) of the House amendment ex-

cept that the secured creditor in a case under chapter

13 may receive any property of a value as of the effec-

tive date of the plan equal to the allowed amount of the

creditor’s secured claim rather than being restricted to

receiving deferred cash payments. Of course, the se-

cured creditors’ lien only secures the value of the col-

lateral and to the extent property is distributed of a

present value equal to the allowed amount of the credi-

tor’s secured claim the creditor’s lien will have been

satisfied in full. Thus the lien created under section

1325(a)(5)(B)(i) is effective only to secure deferred pay-

ments to the extent of the amount of the allowed se-

cured claim. To the extent the deferred payments ex-

ceed the value of the allowed amount of the secured

claim and the debtor subsequently defaults, the lien

will not secure unaccrued interest represented in such

deferred payments.

8–12




The bankruptcy court must confirm a plan if (1) the

plan satisfies the provisions of chapter 13 and other ap-

plicable provisions of title 11; (2) it is proposed in good

faith; (3) it is in the best interests of creditors, and de-

fined by subsection (a)(4) of Section 1325; (4) it has been

accepted by the holder of each allowed secured claim

provided for the plan or where the holder of any such

secured claim is to receive value under the plan not

less than the amount of the allowed secured claim, or

where the debtor surrenders to the holder the collateral

securing any such allowed secured claim; (5) the plan is

feasible; and (6) the requisite fees and charges have

been paid.

Subsection (b) authorizes the court to order an en-

tity, as defined by Section 101(15), to pay any income of

the debtor to the trustee. Any governmental unit is an

entity subject to such an order.

AMENDMENTS

2010—Subsec. (a). Pub. L. 111–327, § 2(a)(44)(A), in-

serted ‘‘period’’ after ‘‘910-day’’ in concluding provi-

sions.

Subsec. (b)(2)(A)(ii). Pub. L. 111–327, § 2(a)(44)(B), in-

serted closing parenthesis after ‘‘548(d)(3)’’.

2006—Subsec. (b)(3). Pub. L. 109–439 inserted ‘‘, other

than subparagraph (A)(ii) of paragraph (2),’’ after

‘‘under paragraph (2)’’ in introductory provisions.

2005—Subsec. (a). Pub. L. 109–8, § 306(b), inserted con-

cluding provisions at end ‘‘For purposes of paragraph

(5), section 506 shall not apply to a claim described in

that paragraph if the creditor has a purchase money se-

curity interest securing the debt that is the subject of

the claim, the debt was incurred within the 910-day pre-

ceding the date of the filing of the petition, and the col-

lateral for that debt consists of a motor vehicle (as de-

fined in section 30102 of title 49) acquired for the per-

sonal use of the debtor, or if collateral for that debt

consists of any other thing of value, if the debt was in-

curred during the 1-year period preceding that filing.’’

Subsec. (a)(5)(B)(i). Pub. L. 109–8, § 306(a), amended cl.

(i) generally. Prior to amendment, cl. (i) read as fol-

lows: ‘‘the plan provides that the holder of such claim

retain the lien securing such claim; and’’.

Subsec. (a)(5)(B)(iii). Pub. L. 109–8, § 309(c)(1), added

cl. (iii).

Subsec. (a)(7). Pub. L. 109–8, § 102(g), added par. (7).

Subsec. (a)(8). Pub. L. 109–8, § 213(10), added par. (8).

Subsec. (a)(9). Pub. L. 109–8, § 716(a), added par. (9).

Subsec. (b)(1)(B). Pub. L. 109–8, § 318(2), substituted

‘‘applicable commitment period’’ for ‘‘three-year pe-

riod’’.

Pub. L. 109–8, § 102(h)(1), inserted ‘‘to unsecured credi-

tors’’ after ‘‘to make payments’’.

Subsec. (b)(2), (3). Pub. L. 109–8, § 102(h)(2), added pars.

(2) and (3) and struck out former par. (2) which read as

follows: ‘‘For purposes of this subsection, ‘disposable

income’ means income which is received by the debtor

and which is not reasonably necessary to be expended—

‘‘(A) for the maintenance or support of the debtor

or a dependent of the debtor, including charitable

contributions (that meet the definition of ‘charitable

contribution’ under section 548(d)(3)) to a qualified

religious or charitable entity or organization (as that

term is defined in section 548(d)(4)) in an amount not

to exceed 15 percent of the gross income of the debtor

for the year in which the contributions are made; and

‘‘(B) if the debtor is engaged in business, for the

payment of expenditures necessary for the continu-

ation, preservation, and operation of such business.’’

Subsec. (b)(4). Pub. L. 109–8, § 318(3), added par. (4).

1998—Subsec. (b)(2)(A). Pub. L. 105–183 inserted before

semicolon ‘‘, including charitable contributions (that

meet the definition of ‘charitable contribution’ under

section 548(d)(3)) to a qualified religious or charitable

entity or organization (as that term is defined in sec-

tion 548(d)(4)) in an amount not to exceed 15 percent of

the gross income of the debtor for the year in which the

contributions are made’’.

1986—Subsec. (b)(2)(A). Pub. L. 99–554 substituted

‘‘; and’’ for ‘‘; or’’.

1984—Subsec. (a). Pub. L. 98–353, § 317(1), substituted

‘‘Except as provided in subsection (b), the’’ for ‘‘The’’.

Subsec. (a)(1). Pub. L. 98–353, § 530, inserted ‘‘the’’ be-

fore ‘‘other’’.

Subsecs. (b), (c). Pub. L. 98–353, § 317(2), (3), added sub-

sec. (b) and redesignated former subsec. (b) as (c).








Amendment by Pub. L. 105–183 applicable to any case

brought under an applicable provision of this title that

is pending or commenced on or after June 19, 1998, see

section 5 of Pub. L. 105–183, set out as a note under sec-

tion 544 of this title.



Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out

as a note under section 581 of Title 28, Judiciary and

Judicial Procedure.





101 of this title.





follows:

By notice dated Feb. 19, 2010, 75 F.R. 8747, effective

Apr. 1, 2010, in subsec. (b)(3), (4), dollar amount ‘‘575’’

was adjusted to ‘‘625’’. See notice of the Judicial Con-

ference of the United States set out as a note under

section 104 of this title.


Apr. 1, 2007, in subsec. (b), dollar amount ‘‘525’’ was ad-

justed to ‘‘575’’ each time it appeared.

§ 1326. Payments

(a)(1) Unless the court orders otherwise, the

debtor shall commence making payments not

later than 30 days after the date of the filing of

the plan or the order for relief, whichever is ear-

lier, in the amount—

(A) proposed by the plan to the trustee;

(B) scheduled in a lease of personal property

directly to the lessor for that portion of the

obligation that becomes due after the order

for relief, reducing the payments under sub-

paragraph (A) by the amount so paid and pro-

viding the trustee with evidence of such pay-

ment, including the amount and date of pay-

ment; and

(C) that provides adequate protection di-

rectly to a creditor holding an allowed claim

secured by personal property to the extent the

claim is attributable to the purchase of such

property by the debtor for that portion of the

obligation that becomes due after the order

for relief, reducing the payments under sub-

paragraph (A) by the amount so paid and pro-

viding the trustee with evidence of such pay-

ment, including the amount and date of pay-

ment.

8–13



(2) A payment made under paragraph (1)(A)

shall be retained by the trustee until confirma-

tion or denial of confirmation. If a plan is con-

firmed, the trustee shall distribute any such

payment in accordance with the plan as soon as

is practicable. If a plan is not confirmed, the

trustee shall return any such payments not pre-

viously paid and not yet due and owing to credi-

tors pursuant to paragraph (3) to the debtor,

after deducting any unpaid claim allowed under

section 503(b). (3) Subject to section 363, the court may, upon

notice and a hearing, modify, increase, or reduce

the payments required under this subsection

pending confirmation of a plan. (4) Not later than 60 days after the date of fil-

ing of a case under this chapter, a debtor retain-

ing possession of personal property subject to a

lease or securing a claim attributable in whole

or in part to the purchase price of such property

shall provide the lessor or secured creditor rea-

sonable evidence of the maintenance of any re-

quired insurance coverage with respect to the

use or ownership of such property and continue

to do so for so long as the debtor retains posses-

sion of such property. (b) Before or at the time of each payment to

creditors under the plan, there shall be paid— (1) any unpaid claim of the kind specified in

section 507(a)(2) of this title; (2) if a standing trustee appointed under sec-

tion 586(b) of title 28 is serving in the case, the

percentage fee fixed for such standing trustee

under section 586(e)(1)(B) of title 28; and (3) if a chapter 7 trustee has been allowed

compensation due to the conversion or dismis-

sal of the debtor’s prior case pursuant to sec-

tion 707(b), and some portion of that com-

pensation remains unpaid in a case converted

to this chapter or in the case dismissed under

section 707(b) and refiled under this chapter,

the amount of any such unpaid compensation,

which shall be paid monthly— (A) by prorating such amount over the re-

maining duration of the plan; and (B) by monthly payments not to exceed

the greater of— (i) $25; or (ii) the amount payable to unsecured

nonpriority creditors, as provided by the

plan, multiplied by 5 percent, and the re-

sult divided by the number of months in

the plan.

(c) Except as otherwise provided in the plan or

in the order confirming the plan, the trustee

shall make payments to creditors under the

plan. (d) Notwithstanding any other provision of

this title— (1) compensation referred to in subsection

(b)(3) is payable and may be collected by the

trustee under that paragraph, even if such

amount has been discharged in a prior case

under this title; and (2) such compensation is payable in a case

under this chapter only to the extent per-

mitted by subsection (b)(3).


98–353, title III, §§ 318(a), 531, July 10, 1984, 98

Stat. 357, 389; Pub. L. 99–554, title II, §§ 230, 283(z),

Oct. 27, 1986, 100 Stat. 3103, 3118; Pub. L. 103–394, title III, § 307, Oct. 22, 1994, 108 Stat. 4135; Pub. L. 109–8, title III, § 309(c)(2), title XII, § 1224, title XV, § 1502(a)(10), Apr. 20, 2005, 119 Stat. 83, 199, 217.)





below.



Section 1326(a)(2) of the House amendment adopts a

comparable provision contained in the House bill pro-

viding for standing trustees.


Section 1326 supplements the priorities provisions of

section 507. Subsection (a) requires accrued costs of ad-

ministration and filing fees, as well as fees due the

chapter 13 trustee, to be disbursed before payments to

creditors under the plan. Subsection (b) makes it clear

that the chapter 13 trustee is normally to make dis-

tribution to creditors of the payments made under the

plan by the debtor.


Subsection (a) requires that before or at the time of

each payment any outstanding administrative expenses

[and] any percentage fee due for a private standing

chapter 13 trustee be paid in full.

AMENDMENTS

2005—Subsec. (a). Pub. L. 109–8, § 309(c)(2), amended

subsec. (a) generally. Prior to amendment subsec. (a)

read as follows: ‘‘(a)(1) Unless the court orders otherwise, the debtor

shall commence making the payments proposed by a

plan within 30 days after the plan is filed. ‘‘(2) A payment made under this subsection shall be

retained by the trustee until confirmation or denial of

confirmation of a plan. If a plan is confirmed, the trust-

ee shall distribute any such payment in accordance

with the plan as soon as practicable. If a plan is not

confirmed, the trustee shall return any such payment

to the debtor, after deducting any unpaid claim allowed

under section 503(b) of this title.’’ Subsec. (b)(1). Pub. L. 109–8, § 1502(a)(10), substituted

‘‘507(a)(2)’’ for ‘‘507(a)(1)’’. Subsec. (b)(3). Pub. L. 109–8, § 1224(1), added par. (3). Subsec. (d). Pub. L. 109–8, § 1224(2), added subsec. (d). 1994—Subsec. (a)(2). Pub. L. 103–394 inserted ‘‘as soon

as practicable’’ before period at end of second sentence. 1986—Subsec. (a)(2). Pub. L. 99–554, § 283(z), substituted

‘‘payment’’ for ‘‘payments’’ in last sentence. Subsec. (b). Pub. L. 99–554, § 230, amended subsec. (b)

generally, substituting ‘‘586(b) of title 28’’ for ‘‘1302(d)

of this title’’ and ‘‘586(e)(1)(B) of title 28’’ for ‘‘1302(e) of

this title’’ in par. (2). 1984—Subsec. (a). Pub. L. 98–353, § 318(a)(2), added sub-

sec. (a). Former subsec. (a) redesignated (b). Subsec. (b). Pub. L. 98–353, § 318(a)(1), redesignated

subsec. (a) as (b). Former subsec. (b) redesignated (c). Subsec. (b)(2). Pub. L. 98–353, § 531, inserted ‘‘of this

title’’ after ‘‘1302(d)’’. Subsec. (c). Pub. L. 98–353, § 318(a)(1), redesignated

former subsec. (b) as (c).










8–14





this title.






Judiciary and Judicial Procedure.


30 days after Oct. 27, 1986, see section 302(a) of Pub. L.

99–554.





101 of this title.





follows:


Apr. 1, 2010, in subsec. (b)(3)(B), dollar amount ‘‘25’’ was

adjusted to ‘‘25’’. See notice of the Judicial Conference

of the United States set out as a note under section 104

of this title.


Apr. 1, 2007, in subsec. (b)(3), dollar amount ‘‘25’’ was

adjusted to ‘‘25’’.

§ 1327. Effect of confirmation

(a) The provisions of a confirmed plan bind the

debtor and each creditor, whether or not the

claim of such creditor is provided for by the

plan, and whether or not such creditor has ob-

jected to, has accepted, or has rejected the plan.

(b) Except as otherwise provided in the plan or

the order confirming the plan, the confirmation

of a plan vests all of the property of the estate

in the debtor.

(c) Except as otherwise provided in the plan or

in the order confirming the plan, the property

vesting in the debtor under subsection (b) of this

section is free and clear of any claim or interest

of any creditor provided for by the plan.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2650.)



Subsection (a) binds the debtor and each creditor to

the provisions of a confirmed plan, whether or not the

claim of the creditor is provided for by the plan and

whether or not the creditor has accepted, rejected, or

objected to the plan. Unless the plan itself or the order

confirming the plan otherwise provides, confirmation is

deemed to vest all property of the estate in the debtor,

free and clear of any claim or interest of any creditor

provided for by the plan.

§ 1328. Discharge

(a) Subject to subsection (d), as soon as prac-

ticable after completion by the debtor of all

payments under the plan, and in the case of a

debtor who is required by a judicial or adminis-

trative order, or by statute, to pay a domestic

support obligation, after such debtor certifies

that all amounts payable under such order or

such statute that are due on or before the date

of the certification (including amounts due be-

fore the petition was filed, but only to the ex-

tent provided for by the plan) have been paid,

unless the court approves a written waiver of

discharge executed by the debtor after the order

for relief under this chapter, the court shall

grant the debtor a discharge of all debts pro-

vided for by the plan or disallowed under section

502 of this title, except any debt— (1) provided for under section 1322(b)(5); (2) of the kind specified in section

507(a)(8)(C) or in paragraph (1)(B), (1)(C), (2),

(3), (4), (5), (8), or (9) of section 523(a); (3) for restitution, or a criminal fine, in-

cluded in a sentence on the debtor’s conviction

of a crime; or

(4) for restitution, or damages, awarded in a

civil action against the debtor as a result of

willful or malicious injury by the debtor that

caused personal injury to an individual or the

death of an individual.

(b) Subject to subsection (d), at any time after

the confirmation of the plan and after notice

and a hearing, the court may grant a discharge

to a debtor that has not completed payments

under the plan only if—

(1) the debtor’s failure to complete such pay-

ments is due to circumstances for which the

debtor should not justly be held accountable;

(2) the value, as of the effective date of the

plan, of property actually distributed under

the plan on account of each allowed unsecured

claim is not less than the amount that would

have been paid on such claim if the estate of

the debtor had been liquidated under chapter 7

of this title on such date; and

(3) modification of the plan under section

1329 of this title is not practicable.

(c) A discharge granted under subsection (b) of

this section discharges the debtor from all unse-

cured debts provided for by the plan or dis-

allowed under section 502 of this title, except

any debt—

(1) provided for under section 1322(b)(5) of

this title; or

(2) of a kind specified in section 523(a) of this

title.

(d) Notwithstanding any other provision of

this section, a discharge granted under this sec-

tion does not discharge the debtor from any debt

based on an allowed claim filed under section

1305(a)(2) of this title if prior approval by the

trustee of the debtor’s incurring such debt was

practicable and was not obtained.

(e) On request of a party in interest before one

year after a discharge under this section is

granted, and after notice and a hearing, the

court may revoke such discharge only if—

(1) such discharge was obtained by the debt-

or through fraud; and

(2) the requesting party did not know of such

fraud until after such discharge was granted.

(f) Notwithstanding subsections (a) and (b),

the court shall not grant a discharge of all debts

provided for in the plan or disallowed under sec-

tion 502, if the debtor has received a discharge—

(1) in a case filed under chapter 7, 11, or 12 of

this title during the 4-year period preceding

the date of the order for relief under this chap-

ter, or

8–15



(2) in a case filed under chapter 13 of this

title during the 2-year period preceding the

date of such order.

(g)(1) The court shall not grant a discharge

under this section to a debtor unless after filing

a petition the debtor has completed an instruc-

tional course concerning personal financial

management described in section 111. (2) Paragraph (1) shall not apply with respect

to a debtor who is a person described in section

109(h)(4) or who resides in a district for which

the United States trustee (or the bankruptcy ad-

ministrator, if any) determines that the ap-

proved instructional courses are not adequate to

service the additional individuals who would

otherwise be required to complete such instruc-

tional course by reason of the requirements of

paragraph (1). (3) The United States trustee (or the bank-

ruptcy administrator, if any) who makes a de-

termination described in paragraph (2) shall re-

view such determination not later than 1 year

after the date of such determination, and not

less frequently than annually thereafter. (h) The court may not grant a discharge under

this chapter unless the court after notice and a

hearing held not more than 10 days before the

date of the entry of the order granting the dis-

charge finds that there is no reasonable cause to

believe that— (1) section 522(q)(1) may be applicable to the

debtor; and (2) there is pending any proceeding in which

the debtor may be found guilty of a felony of

the kind described in section 522(q)(1)(A) or

liable for a debt of the kind described in sec-

tion 522(q)(1)(B).


98–353, title III, § 532, July 10, 1984, 98 Stat. 389;

Pub. L. 101–508, title III, § 3007(b)(1), Nov. 5, 1990,

104 Stat. 1388–28; Pub. L. 101–581, §§ 2(b), 3, Nov.

15, 1990, 104 Stat. 2865; Pub. L. 101–647, title

XXXI, §§ 3102(b), 3103, Nov. 29, 1990, 104 Stat. 4916;

Pub. L. 103–394, title III, § 302, title V, § 501(d)(38),

Oct. 22, 1994, 108 Stat. 4132, 4147; Pub. L. 109–8,

title I, § 106(c), title II, § 213(11), title III, §§ 312(2),

314(b), 330(d), title VII, § 707, Apr. 20, 2005, 119

Stat. 38, 53, 87, 88, 102, 126.)



Section 1328(a) adopts a provision contained in the

Senate amendment permitting the court to approve a

waiver of discharge by the debtor. It is anticipated that

such a waiver must be in writing executed after the

order for relief in a case under chapter 13.


The court is to enter a discharge, unless waived, as

soon as practicable after completion of payments under

the plan. The debtor is to be discharged of all debts pro-

vided for by the plan or disallowed under section 502,

except a debt provided for under the plan the last pay-

ment on which was not due until after the completion

of the plan, or a debt incurred for willful and malicious

conversion of or injury to the property or person of an-

other.

Subsection (b) is the successor to Bankruptcy Act

Section 661 [section 1061 of former title 11]. This sub-

section permits the bankruptcy judge to grant the

debtor a discharge at any time after confirmation of a

plan, if the court determines, after notice and hearing,

that the failure to complete payments under the plan

is due to circumstances for which the debtor should not

justly be held accountable, the distributions made to

each creditor under the plan equal in value the amount

that would have been paid to the creditor had the es-

tate been liquidated under chapter 7 of title 11 at the

date of the hearing under this subsection, and that

modification of the plan is impracticable. The dis-

charge granted under subsection (b) relieves the debtor

from all unsecured debts provided for by the plan or

disallowed under section 502, except nondischargeable

debts described in section 523(a) of title 11 or debts of

the type covered by section 1322(b)(5). Subsection (d) excepts from any chapter 13 discharge

a debt based on an allowed section 1305(a)(2) post-

petition claim, if prior trustee approval of the incur-

ring of the debt was practicable but was not obtained. A chapter 13 discharge obtained through fraud and

before the moving party gained knowledge of the fraud

may be revoked by the court under subsection (e), after

notice and hearing, at the request of any party in inter-

est made within 1 year after the discharge was granted.

AMENDMENTS

2005—Subsec. (a). Pub. L. 109–8, § 330(d)(1), substituted

‘‘Subject to subsection (d), as’’ for ‘‘As’’ in introduc-

tory provisions. Pub. L. 109–8, § 314(b), added pars. (1) to (4) and struck

out former pars. (1) to (3) which read as follows: ‘‘(1) provided for under section 1322(b)(5) of this title; ‘‘(2) of the kind specified in paragraph (5), (8), or (9)

of section 523(a) of this title; or ‘‘(3) for restitution, or a criminal fine, included in a

sentence on the debtor’s conviction of a crime.’’ Pub. L. 109–8, § 213(11), inserted ‘‘, and in the case of

a debtor who is required by a judicial or administrative

order, or by statute, to pay a domestic support obliga-

tion, after such debtor certifies that all amounts pay-

able under such order or such statute that are due on

or before the date of the certification (including

amounts due before the petition was filed, but only to

the extent provided for by the plan) have been paid’’

after ‘‘completion by the debtor of all payments under

the plan’’ in introductory provisions.

Subsec. (a)(2). Pub. L. 109–8, § 707, substituted ‘‘sec-

tion 507(a)(8)(C) or in paragraph (1)(B), (1)(C),’’ for

‘‘paragraph’’.

Subsec. (b). Pub. L. 109–8, § 330(d)(2), substituted

‘‘Subject to subsection (d), at’’ for ‘‘At’’ in introduc-

tory provisions.

Subsec. (f). Pub. L. 109–8, § 312(2), added subsec. (f).

Subsec. (g). Pub. L. 109–8, § 106(c), added subsec. (g).

Subsec. (h). Pub. L. 109–8, § 330(d)(3), added subsec. (h).

1994—Subsec. (a)(2). Pub. L. 103–394, § 501(d)(38)(A),

substituted ‘‘(5), (8), or (9)’’ for ‘‘(5) or (8)’’.

Subsec. (a)(3). Pub. L. 103–394, § 501(d)(38)(B), struck

out last par. (3). See 1990 Amendment note below.

Pub. L. 103–394, § 302, inserted ‘‘, or a criminal fine,’’

after ‘‘restitution’’.

1990—Subsec. (a)(1). Pub. L. 101–581, § 3(1), and Pub. L.

101–647, § 3103(1), made identical amendments striking

‘‘or’’ at end.

Subsec. (a)(2). Pub. L. 101–581, § 3(2), and Pub. L.

101–647, § 3103(2), made identical amendments substitut-

ing ‘‘; or’’ for period at end.

Pub. L. 101–581, § 2(b), and Pub. L. 101–647, § 3102(b),

which directed identical insertions of ‘‘or 523(a)(9)’’

after ‘‘523(a)(5)’’, could not be executed because of prior

amendment by Pub. L. 101–508. See below.

Pub. L. 101–508 substituted ‘‘paragraph (5) or (8) of

section 523(a)’’ for ‘‘section 523(a)(5)’’.

Subsec. (a)(3). Pub. L. 101–581, § 3(3), and Pub. L.

101–647, § 3103(3), made identical amendments adding

par. (3).

1984—Subsec. (e)(1). Pub. L. 98–353, § 532(1), inserted

‘‘by the debtor’’ after ‘‘obtained’’.

Subsec. (e)(2). Pub. L. 98–353, § 532(2), substituted ‘‘the

requesting party did not know of such fraud until’’ for

‘‘knowledge of such fraud came to the requesting

party’’.

8–16




Amendments by Pub. L. 109–8 effective 180 days after

Apr. 20, 2005, with amendments by sections 106(c),

213(11), 312(2), 314(b), and 707 of Pub. L. 109–8 not appli-

cable with respect to cases commenced under this title

before such effective date, except as otherwise pro-

vided, and amendment by section 330(d) of Pub. L. 109–8

applicable with respect to cases commenced under this

title on or after Apr. 20, 2005, see section 1501 of Pub. L.







this title.

EFFECTIVE DATE OF 1990 AMENDMENTS

Amendment by Pub. L. 101–647 effective Nov. 29, 1990,

but not applicable with respect to cases commenced

under this title before Nov. 29, 1990, see section 3104 of


this title.

Amendment by Pub. L. 101–581 effective Nov. 15, 1990,

but not applicable with respect to cases commenced

under this title before Nov. 15, 1990, see section 4 of


this title.

Section 3007(b)(2) of Pub. L. 101–508 provided that:

‘‘The amendment made by paragraph (1) [amending this

section] shall not apply to any case under the provi-

sions of title 11, United States Code, commenced before

the date of the enactment of this Act [Nov. 5, 1990].’’





101 of this title.

§ 1329. Modification of plan after confirmation

(a) At any time after confirmation of the plan

but before the completion of payments under

such plan, the plan may be modified, upon re-

quest of the debtor, the trustee, or the holder of

an allowed unsecured claim, to—

(1) increase or reduce the amount of pay-

ments on claims of a particular class provided

for by the plan;

(2) extend or reduce the time for such pay-

ments;

(3) alter the amount of the distribution to a

creditor whose claim is provided for by the

plan to the extent necessary to take account

of any payment of such claim other than

under the plan; or

(4) reduce amounts to be paid under the plan

by the actual amount expended by the debtor

to purchase health insurance for the debtor

(and for any dependent of the debtor if such

dependent does not otherwise have health in-

surance coverage) if the debtor documents the

cost of such insurance and demonstrates

that—

(A) such expenses are reasonable and nec-

essary;

(B)(i) if the debtor previously paid for

health insurance, the amount is not materi-

ally larger than the cost the debtor pre-

viously paid or the cost necessary to main-

tain the lapsed policy; or

(ii) if the debtor did not have health insur-

ance, the amount is not materially larger

than the reasonable cost that would be in-

curred by a debtor who purchases health in-

surance, who has similar income, expenses,

age, and health status, and who lives in the

same geographical location with the same

number of dependents who do not otherwise

have health insurance coverage; and

(C) the amount is not otherwise allowed

for purposes of determining disposable in-

come under section 1325(b) of this title;

and upon request of any party in interest, files

proof that a health insurance policy was pur-

chased.

(b)(1) Sections 1322(a), 1322(b), and 1323(c) of

this title and the requirements of section 1325(a)

of this title apply to any modification under

subsection (a) of this section.

(2) The plan as modified becomes the plan un-

less, after notice and a hearing, such modifica-

tion is disapproved.

(c) A plan modified under this section may not

provide for payments over a period that expires

after the applicable commitment period under

section 1325(b)(1)(B) after the time that the first

payment under the original confirmed plan was

due, unless the court, for cause, approves a

longer period, but the court may not approve a

period that expires after five years after such

time.



357, 389; Pub. L. 109–8, title I, § 102(i), title III,

§ 318(4), Apr. 20, 2005, 119 Stat. 34, 94.)



At any time prior to the completion of payments

under a confirmed plan, the plan may be modified, after

notice and hearing, to change the amount of payments

to creditors or a particular class of creditors and to ex-

tend or reduce the payment period. A modified plan

may not contain any provision which could not be in-

cluded in an original plan as prescribed by section 1322.

A modified plan may not call for payments to be made

beyond four years as measured from the date of the

commencement of payments under the original plan.

AMENDMENTS

2005—Subsec. (a)(4). Pub. L. 109–8, § 102(i), added par.

(4).

Subsec. (c). Pub. L. 109–8, § 318(4), substituted ‘‘the ap-

plicable commitment period under section

1325(b)(1)(B)’’ for ‘‘three years’’.

1984—Subsec. (a). Pub. L. 98–353, §§ 319, 533(1), (2), in-

serted ‘‘of the plan’’ after ‘‘confirmation’’, substituted

‘‘such plan’’ for ‘‘a plan’’, and inserted provisions re-

specting requests by the debtor, the trustee, or the

holder of an allowed unsecured claim for modification.

Subsec. (a)(3). Pub. L. 98–353, § 533(3), substituted

‘‘plan to’’ for ‘‘plan, to’’.











101 of this title.

8–17



§ 1330. Revocation of an order of confirmation

(a) On request of a party in interest at any

time within 180 days after the date of the entry

of an order of confirmation under section 1325 of

this title, and after notice and a hearing, the

court may revoke such order if such order was

procured by fraud.

(b) If the court revokes an order of confirma-

tion under subsection (a) of this section, the

court shall dispose of the case under section 1307

of this title, unless, within the time fixed by the

court, the debtor proposes and the court con-

firms a modification of the plan under section

1329 of this title.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2651.)



Section 1331 of the House bill and Senate amendment

is deleted in the House amendment.

Special tax provision: Section 1331 of title 11 of the

House bill and the comparable provisions in sections

1322 and 1327(d) of the Senate amendment, pertaining to

assessment and collection of taxes in wage earner

plans, are deleted, and the governing rule is placed in

section 505(c) of the House amendment. The provisions

of both bills allowing assessment and collection of

taxes after confirmation of the wage-earner plan are

modified to allow assessment and collection after the

court fixes the fact and amount of a tax liability, in-

cluding administrative period taxes, regardless of

whether this occurs before or after confirmation of the

plan. The provision of the House bill limiting the col-

lection of taxes to those assessed before one year after

the filing of the petition is eliminated, thereby leaving

the period of limitations on assessment of these non-

dischargeable tax liabilities the usual period provided

by the Internal Revenue Code [Title 26].


The court may revoke an order of confirmation pro-

cured by fraud, after notice and hearing, on application

of a party in interest filed within 180 days after the

entry of the order. Thereafter, unless a modified plan is

confirmed, the court is to convert or dismiss the chap-

ter 13 case as provided in section 1307.

8–18
