TRUSTEES MOTIONS TO DISMISS MOTIONS TO DISMISS ARE FILED FOR ARREARS, - - PDF document

TRUSTEE’S MOTIONS TO DISMISS MOTIONS TO DISMISS ARE FILED FOR ARREARS, AND FAILURE TO PROVIDE REQUIRED INFORMATION. MOTIONS TO DISMISS FOR SIXTEEN DAY REVIEW ARE REQUESTED FROM THE PROVIDING OFFICERS. MOTIONS TO DISMISS ARE FILED FOR DELINQUENCY OF TWO MONTHS IN ARREARS, AND COULD BE FILED IF THERE IS NO DELINQUENCY BUT A PAYMENT HAS NOT BEEN RECEIVED FOR SIXTY DAYS. A MOTION TO DISMISS WILL NOT BE FILED FOR ARREARS IF THE CASE HAS AN INTERLOCUTORY ORDER OR AGREED ORDER; IT MAY BE FILED FOR ANY OTHER REASON. TWENTY –ONE DAY NOTICE IS GIVEN ON ALL MOTIONS TO DISMISS SO THAT A RESPONSE CAN BE FILED. THE IRS MAY REQUEST A MOTION TO DISMISS BE FILED. CREDITORS FILE THERE OWN MOTION TO DISMISS WITH THE CLERK. SOME MOTIONS TO DISMISS WILL BE FILED WITH PREJUDICE, IF THERE HAS BEEN PRIOR CASES FILED, OR MULITPLE MOTIONS TO DISMISS HAVE BEEN FILED. NOTICE OF INTENT FIRST PAYMENTS BY THE DEBTOR THAT ARE NOT MADE THE DAY THE PAYMENT IS DUE WILL HAVE A NOTICE OF INTENT TO CERTIFY FOR DISMISSAL PURSUANT TO GENERAL ORDER 2009‐03(SECTION 3,b,c&d‐1) FILED THE DAY AFTER THE PAYMENT IS DUE. AN E‐MAIL WILL BE SENT TO THE ATTORNEY TO NOTIFY THEM OF THE NOTICE OF INTENT BEING FILED. DEBTORS HAVE 7 DAYS TO MAKE THE PAYMENT. ON THE DAY AFTER THE 7TH DAY AN ORDER DISMISSING WILL BE FILED. INTERLCOUTORY ORDER / AGREED ORDERS INTERLOCUTORY ORDERS CAN BE AN OPTION WHEN THE DEBTOR CANNOT BE CURRENT BY COURT. THE ARREARS WILL BE DIVIDED BY SIX MONTHS PROVIDED THERE ARE SIX MONTHS LEFT ON THE

• BANKRUPTCY. IF THERE IS NOT SIX MONTHS LEFT ON THE CASE, THE ARREARS WILL BE DIVIDED BY THE

NUMBER OF MONTHS THERE ARE LEFT. IF THERE IS NOT ENOUGH MONTHS LEFT ON THE CASE AN INTERLOCUTORY ORDER WOULD NOT BE AN OPTION. AN AGREED ORDER COULD BE AN OPTION THAT WOULD GIVE THE DEBTOR A CERTAIN DATE TO BE CURRENT. AGEED ORDERS CAN BE FOR FIFTEEN DAYS OR SOMETIME TO BE CURRENT THE DAY BEFORE THE NEXT COURT. A REQUEST OF AN INTERLOCUTORY ORDER OR AN AGREED ORDER WILL BE FORWARED TO MARC. THE REQUEST CAN BE THE MORNING OF COURT AND NEED TO BE AT LEAST THIRTY MINUTES BEFORE

• COURT. REQUESTS NEED TO BE SENT TO attyinfo@ch13‐12westtex.org. THE ORDERS WILL BE SENT THE

DAY OF COURT, AS SOON AS COURT IS OVER. THE ORDER WILL NOT BE SENT TO YOUR OFFICE BEFORE COURT.

THE ORDER WILL BE E‐MAILED TO THE ATTORNEY FOR ARRPOVAL. PLEASE LET US KNOW IF THERE NEEDS TO BE ANY CHANGES MADE SO THAT A REVISED ORDER CAN BE SENT FOR APPROVAL AND SO THAT THE ORDER CAN BE FILED WITH THE CLERK AS SOON AS POSSIBLE. EVERY FRIDAY THE CASES THAT ARE UNDER AN INTERLOCUTORY ORDER WITH A PAYMENT DUE ARE CHECKED FOR COMPLIANCE WITH THE INTERLCOUTORY ORDER. IF THE DEBTOR HAS NOT COMPLIED WITH THE INTERLOCUTORY ORDER AN E‐MAIL WILL BE SENT TO THE ATTORNEY. THE NEXT FRIDAY THE CASE WILL BE REVIEWED. IF THERE HAS NOT BEEN A PAYMENT OR CORRESPONDENCE FROM THE DEBTOR OR THE ATTORNEY AN ORDER DISMISSING WILL BE FILED. AGREED ORDERS WILL BE CHECKED THE DAY AFTER THE DAY DUE. IF THE DEBTOR HAS NOT COMPLIED WITH THE AGREED ORDER AN ORDER DISMISSING WILL BE FILED.

NOTICE OF CLAIM FILED AND NOT FILED The NOCF‐NF is generated to inform you of the claims that we do and do not have at the 90 day bar date. It is filed immediately after the 90 day bar date has past. This report is meant to help aide in the preparation of the TRCC. The Trustee can not object to claims for problems bigger than duplicate claims filed. Anything bigger, the debtor is expected to object on their own immediately after receiving the NOCF‐NF. I would urge you to review it carefully since it does state several things that need to be addressed such as: claims that do not belong to the Debtor, duplicate claims and claims that have not been filed that the debtor attorney should file in order to start receiving payments. The NOCF‐NF form states which records may have an issue that needs to be addressed. These problems will range from bad addresses to claims where the payment amount or value may need to be modified. If a claim is filed prior to the TRCC that was not provided for in the plan, you may email the TRCC Department with your request for treatment of that claim. Remember that you have only 30 days from the bar date to file claims for those creditors who did not file claims. NOTICE OF ADDITIONAL OR AMENDED CLAIMS FILED The NAACF is a notice that lets you know a claim has been filed after the 90 day bar date and after the NOCF‐NF was filed. Claims may be filed after the TRCC has been done and that may be cause for a plan modification to be filed by the debtor. The NAACF is created any time a new or amended claim is filed before or after the TRCC is complete. This notice is very important to review and treat any situations immediately. For example, many times I see amended deficiency claims filed that are not addressed until the case is about to close even though the notice was sent out years before. It is much more efficient to treat it while the case is new in order to get the debtor completed as quickly as possible and to avoid unnecessary emails and phone calls because of a situation from so long ago.

TRUSTEE’S RECOMMENDATION OF CLAIMS & MODIFICATION’S

Post Confirmation Department Walter O’Cheskey, Chapter 13 Trustee Northern District of Texas September 1, 2010

Table of Contents

Page Introduction 1 180 Day Matrix Review & Letter 1 210 Day Claims Register Audit 1 Trustee’s Recommendation of Claims (TRCC) 2 TRCC Issues 3-4 TRCC orders 4 TRCC updates 5 Modifications 6 Modification Issues 7

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Introduction

The Trustee and his staff thank you for attending today’s workshop. We hope you find the information helpful and informative. We are available Monday through Friday from 8:00 am to 5:00 pm to answer any questions. We look forward to working with you.

180 Day Matrix Review & Letter

The 180 Day Matrix Audit  Done after the 180 day bar date has passed  A matrix is printed from PACER and compared to addresses listed in the Trustee’s system.  A Notice Only claim is added for unlisted addresses.  Ensures the Trustee’s Recommendation of Claims (TRCC) and Order will be correctly noticed. The 180 day Notice Letter  Sent to the debtor and debtor attorneys  Notification that the 180 day bar date has passed.  Reminder that the TRCC will be generated in 30 days and issues with claims should be addressed as soon as possible.

210 Day Claims Register Audit

The 210 Day Claims Register audit  Done just prior to the TRCC being prepared.  A claims register is printed from PACER and compared to posted proof of claims.  Ensures the Trustee has correctly posted each filed claim in the system.

• Check account numbers, claim amounts, and classifications.

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Trustee’s Recommendation of Claims (TRCC)

 Prepared approximately 210 days after the case is filed.  Review case to see if a modification or agreed order has been entered.

• Claim records are checked to make sure they are set up per the

modification or agreed order’s so that they appear on the TRCC correctly.  Review plan for special wording contained in section IV or section M.

• Typical to find wording concerning:
• The payment of attorney fees

 ex. Pay AAPD payments until attorney fees are paid.

• Authorization to extend the plan term and the terms of secured

and priority creditors so as not to increase the plan payments.

• Authorization to pay 100% to the unsecured creditors.

 Review order for special wording that was added at confirmation.

• Typical to find wording concerning:
• Agreed orders with creditors.
• Debtor step payments and base changes.
• Acknowledgement of nonexempt and Hardacre figures
• Authorization to pay 100% to the unsecured creditors.

 Review case for:

• Filed claims that were not provided for in the confirmed plan.
• Claims provided a certain classification and filed differently
• ex. provided unsecured and filed secured
• Duplicate filed claims.
• Records provided where no claim has been filed.

 Generate the scheduled creditors.

• Putting necessary items in the modification section.
• Generate a plan calc and review to verify that:
• All claims will pay out as projected.
• The case is feasible with the confirmed base.
• The payment covers the permo (monthly payments to creditors).

 The Trustee does not allow prorata plans.

• Any Hardacre or Chapter 7 amounts are covered.

 Filed TRCC with the court.

• Set at least 30 days from the date it is filed.
• Monitor case for responses or objections.

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TRCC Issues

 The case may not be feasible for a number of reasons:

• Filed secured or priority claims not provided on the confirmed plan.
• Claims filed higher than scheduled.
• Claims provided a certain classification and filed differently
• ex. provided unsecured and filed secured
• Special wording for attorney fees in section IV or M making it a long

time period to fees out in effect causing the debtors plan payments to increase in order to pay the higher monthly permos.

• Addition of post petition debt.
• ex. mortgage arrears, income taxes, property taxes.

 Adjustments are always made to make the plan work.

• Additional wording listed in section IV or section M can be helpful.
• ex. If the plan is not a 60 month plan and there is wording

authorizing the extension of plan terms and the terms of the secured and priority creditors, often times the debtors plan payment will not have to increase as the term will simply be extended to make the plan feasible or enough to allow the plan payment to cover the permos. If no such wording is listed then the payment is increased to make the plan work.  For secured claims not treated on the debtor’s confirmed plan.

• Value determined based on the amount listed secured or the value

listed on the proof of claim.

• At times the schedules are reviewed for valuations of real property.
• Unless it is for property taxes for the current year (same year as case

was filed) all additional claims are treated through the plan.

• Interest is paid on all secured claims paid through the plan.
• Typically 8% interest is used.
• Exceptions to this included:

 Secured IRS claims which are paid 4% interest.  Property Taxes which are paid 12% interest per statue.  Post Petition mortgage arrears claims; paid at same interest rate as pre-petition arrears or rate on proof of claim if less than 8% interest.

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 For scheduled records where no claim has been filed:

• If scheduled secured, no payments will be made unless a POC is filed.
• It might be a good idea to file a claim on behalf of the creditor.
• If scheduled priority, the claim will be shown in Section I of the TRCC

and be disallowed.

• Please pay close attention to these claims on the TRCC.
• If you do not want the scheduled priority debt to be disallowed:

 File a response to the TRCC.  File a claim on behalf of the creditor.  File a motion and order to allow the late filed claim.

TRCC orders

 Submitted 30 days after the TRCC was filed if:

• No objections / responses have been filed.
• Reviewed case to verify that:
• Additional claims have not been filed.
• Objections to claims have not been filed.
• Motions to lift stay have been entered.

 If an objection/response is filed.

• Case will be set on the court docket.
• Order will be submitted after court and include any changes or

agreements made.  Once the TRCC order has been entered by the court:

• TRCC is removed from court docket.
• The order is noticed out to all parties listed on the matrix and a

certificate of services is filed with the clerk.

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TRCC updates

 TRCC is updated the month after it was set for court.

• Changes are made to claim records, payments, base, etc.
• The case is reviewed for any changes including:
• Lift stays.
• Claims that were previously unfiled.
• Late filed claims.
• Amended claims.

 Debtor receipts are verified.  The percent to unsecured creditors is updated.  Principal and interest reallocation programs are run.  Verify claims are paying correctly for the month after TRCC update.  Letters are sent to creditors breaking down principal and interest calculations.  Holds are removed on unsecured creditors.

• Removed at trcc update if case is 100% or if there is a net Chapter 7

amount of $500 or more.

• If holds are not removed during the TRCC update, they are removed in

the 3rd month after the TRCC has been updated.

• Keep this in mind when filing a modification as it is possible that

disbursements have already been sent to unsecured creditors.

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Modifications

 Can be filed by the debtor attorney or Trustee.  To avoid possible objections, send a modification, in PDF format, to be reviewed before filing.

• Send modification to attyinfo@ch13-12westtex.org
• Our office will check it.
• Make any necessary corrections.
• Email it back to the attorney to be filed.

 Modifications must be accompanied by:

• Filed copies of current Schedules I & J
• 3 most recent paystubs.

 Review changes being made.

• ex. Are they raising or lowering the debtor’s payment?
• ex. Are they adding or surrendering claims?

 Modified base is calculated and with the proposed changes:

• The plan is checked to see if it pays out all the claims.
• The payment is checked to see if it covers the permos.
• The percent paid to unsecured creditors is checked.
• It cannot be less than what has already been paid.
• The Chapter 7 amounts are verified to ensure that they are covered.

 After court the Trustee’s office will submit the modification orders.

• The debtor attorney is responsible for the noticing of the order and

filing of a certificate of service.

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Modification Issues  Typical errors in the first section or the history of the case include:

• Not stating the correct month the debtors are in.
• Knowing how much has been paid in prior to the month of filing the

modification.

• Figuring the amount owed through the month prior to filing the

modification.

• Most of the time these numbers were pulled from our website

and reflect the current numbers.

• Remember you must take into account:

 If a payment has already been made for the month

• Keep in mind the debtors are usually on wage

withholding and include payments that will be made.

 If a payment has already come due for the month.  The Trustee typically adds any money paid ahead or that

will be paid ahead to the base amount.