Office of The
Chapter 13 Standing Trustee
David G. Peake, Trustee
9660 Hillcroft, Suite 430 Telephone (713) 283-5400
Houston, Texas 77096 Fax (713) 852-9084
Dear Chapter 13 Filer:
Chapter 13 Bankruptcy is designed to allow individuals or small businesses to repay their creditors as much as possible while retaining all or most of their property. This method of debt repayment has gained widespread acceptance as many creditors receive payment in full or at least partial payment of funds owed to them. Before Chapter 13 was an option, relief through bankruptcy for individuals oftentimes meant liquidation of assets and quite often creditors were never repaid. A plus for Chapter 13 filers, some creditors are more willing to extend credit once a Plan is successfully completed. Creditors are realizing that a completed Chapter 13 Plan means that the filer has demonstrated that he or she can meet payment obligations as required in Chapter 13. Successfully working through a Chapter 13 Plan, which may last as long as 60 months, takes a great deal of effort on your part. You are to be commended for making the commitment to repay your creditors. The Trustee’s office is here to administer your case, to receive your monthly payments and pay your creditors, and to handle our case fairly for your benefit as well as the benefit of your creditors. Please remember that it is not the Trustee’s responsibility to collect your payments. It is your responsibility to be sure your payments are received by the Trustee’s office as required.
Included in this packet is a document entitled " What should you know about the Chapter 13 Case" which is designed to answer many of the questions that may come up during the life of your Plan. You will also find a Quick Reference Guide and pre-addressed envelopes for mailing your monthly payments to the Trustee. If you require additional envelopes, please notify our office and they will be mailed to you. I encourage you to read these documents and refer to them throughout your Chapter 13 Plan.
David G. Peake
Chapter 13 Trustee
Quick Reference Guide
MAIL PAYMENTS TO:
DAVID G. PEAKE, TRUSTEE
P.O. BOX 2158
MEMPHIS, TENNESSEE 38101-2158
· DO NOT SEND CASH OR PERSONAL CHECKS. DO SEND CERTIFIED FUNDS, MONEY ORDER OR CASHIERS CHECKS.
· ALWAYS WRITE YOUR CASE NUMBER OR SOCIAL SECURITY NUMBER ON YOUR PAYMENT AND CORRESPONDENCE.
· PRINT YOUR NAME AND ADDRESS LEGIBLY ON YOUR PAYMENTS.
· SEND CORRESPONDENCE OR ANY OVERNIGHT OR EXPRESS MAIL TO:
DAVID G. PEAKE, TRUSTEE
9660 HILLCROFT, SUITE 430
HOUSTON, TEXAS 77096
· PHONE NUMBER:(713) 283-5400FAX NUMBER:(713) 852-9084
· OFFICE HOURS:MONDAY through FRIDAY9:00 A.M. – 4:00 P.M.
· PHONE CALLS ARE ACCEPTED BETWEEN 1:00 P.M. and 4:00 P.M.
YOUR CHAPTER 13 CASE
· YOUR BANKRUPTCY ATTORNEY’S RESPONSIBILITIES:
Under the rules of the Bankruptcy Court, your attorney must continue to appear and represent you for the life of your Chapter 13 Plan or until the Bankruptcy judge permits your attorney to withdraw as your attorney. If you initiate a change of attorney, please notify the Trustee’s office of the new attorney’s name and address. If you ever have a legal question regarding your Plan, a creditor, your rights or your options, call your attorney. The Trustee’s Office cannot give legal advice. If you call our office with a legal question, we will refer you to your attorney. Be sure you have discussed legal fees with your attorney and fully understand what his initial fees cover. Be sure you know if additional fees would be charged and if additional legal services should be required down the road. Keep in mind that the Bankruptcy Judge will review all legal fees. If you receive harassing phone calls from a creditor, inform the creditor that you have filed Chapter 13, give the creditor your case number, and refer the creditor to your attorney. Do not discuss the debt with the creditor. Threatening letters from a creditor should be forwarded to your attorney for handling. If your payments to the Trustee are to be made through payroll deductions, your attorney will prepare a Wage Order, which will be forwarded to your employer. If you change jobs or there is a change in your pay, contact your attorney who will amend your Wage Order if necessary. Wage Orders are discussed further under PLAN PAYMENTS TO THE TRUSTEE’S OFFICE.
· YOUR CASE NUMBER:
When your Chapter 13 Petition was filed, the Court assigned a case number. This number is very important. ALWAYS write this number on all your payments and correspondence and have the number handy when you called the Trustee’s Office.
· PLAN PAYMENTS TO THE TRUSTEE’S OFFICE:
All Chapter 13 filers are required to make monthly payments to the Trustee’s Office beginning 30 days after the filing date. Failure to make adequate and timely payments may result in your case being dismissed (see MOTION TO DISMISS). We strongly urge that payments be made through payroll deductions as history has indicated that cases with Wage Orders in place have a better chance of completing. With this method of payment, your attorney prepares a Wage Order, which tells your employer how much to deduct from your paycheck, and where to send the deducted funds. Sometimes, several pay periods go by before the employer actually begins deducting and sending payments to the Trustee. Remember that you are responsible for payments to the Trustee’s office and you need to make direct payments until your employer begins sending the payments to the Trustee. All Plan payments should be payable to DAVID G. PEAKE, TRUSTEE and mailed to:
David G. Peake, Trustee
P.O. Box 2158
Memphis, Tennessee 38101-2158
Be sure to include your CASE NUMBER, NAME and ADDRESS directly on your payment. Please write or print legibly. This information is necessary to insure that your payment is credited to YOUR account.
We do not accept direct deposits or wired funds.
It is an excellent idea to keep copies of all payments to the Trustee. If there should ever be a discrepancy in your payment history, you would need to provide certain information to the Trustee’s Office to prove that payments were made. If a problem should arise, we would need to know the date of the missing payment, the amount of the payment and the money order or cashiers check number. Without this information we could not search our records. If after receiving this information we still could not locate the payment, we would ask you to put a trace on the payment. You would need to locate the place of business where you purchased the money order or cashiers check and ask them to trace the payment. A trace would prove where the money was deposited, like checking the endorsement on a cancelled check.
· CALLS TO THE TRUSTEE:
Calls are expected Monday through Friday between the hours of 1:00 and 4:00 p.m. Please do not think that you need to speak with the Trustee. Our staff is familiar with the policies and guidelines in Chapter 13 and is well qualified to discuss your problems or questions. Remember that the Trustee and the Trustee’s staff cannot give legal advice. Please direct all legal questions to your attorney.
Our telephone system includes voice mail, which enables callers to leave a message if the staff member being called is not available. We encourage you to leave a message; your call will be returned. Be sure to speak slowly, pronounce your name clearly and leave your phone number. Between 1:00 and 4:p.m., we experience a large number of incoming phone calls and sometimes your call cannot be returned right away. Our goal is to return all calls the same day but sometimes this is impossible. On extremely busy days, it may be the following day before your call is returned.
If you call our office to ask general questions about your case, enter the proper extension when prompted by our phone system. If you call our office regarding a notice of dismissal, stay on the line until the Operator answers and then ask to speak to the Dismissal Clerk. You will be asked for your case number.
· CORRESPONDENCE TO THE TRUSTEE’S OFFICE:
When sending correspondence to the Trustee’s Office, be sure to include your case number, name, address, phone number and mail to:
David G. Peake, Trustee
9660 Hillcroft, Suite 430
Houston, Texas 77096
Please note that this address is not the same address for payments. Allow five to ten working days for a response. Time permitting, we may place a phone call to you rather than send a letter.
· CHANGE OF ADDRESS:
It is very important that we know your current address while your Chapter 13 Plan is active. We mail all notice, correspondence, checks, etc. to the address listed on your Bankruptcy Petition. If your address changes, it is very important that you notify your attorney, the Bankruptcy Court, and the Trustee’s Office in writing immediately.
· CHANGE OF EMPLOYMENT:
If you have a change in employment, notify your attorney, the Bankruptcy court and the Trustee’s Office immediately. This includes the name and address of a new employer and a change in the amount of your pay.
· TRUSTEE’S FEES:
Your attorney should have explained the Trustee’s fees as allowed by Court. This fee may fluctuate during the life of your Plan but will not be more than 10%.
· MEETING OF CREDITORS AND CONFIRMATION HEARING:
The Meeting of Creditors also referred to as the 341(a) Meeting, is an opportunity for you, your attorney and the Trustee to sit down together and briefly discuss your case. Any creditors who wish to attend will be given the opportunity to ask questions. Chapter 13 filers are required to attend, both husband and wife if you have filed jointly. Failure to attend can result in your case being noticed for dismissal. Your attorney or his or her designated representative must also attend. The Trustee’s Office will notify all parties of the date, time and location of the Meeting of Creditors as well as the date, time and location of the Confirmation Hearing.
The Confirmation Hearing is an actual hearing before the Bankruptcy Judge where the Trustee makes a recommendation regarding the feasibility of your Plan. If the Trustee recommends confirmation, he is stating that your Plan works, your budget is reasonable and you are paying all your projected disposal income into the Plan. If this Trustee does not recommend confirmation he is stating that your Plan is not feasible and/or your budget is not reasonable. Your attorney will advise you if it is necessary for you to attend the confirmation hearing.
· MOTION TO DISMISS:
If your case gets dismissed, you will no longer be protected under Chapter 13 Bankruptcy law. Dismissal reactivates all unpaid or disputed debts, all interest, finance charges, all late charges not allowed by the Court, and all debts of creditors who did not file their claims. In addition, you will be forced to deal with those creditors on their terms, not yours or the Court’s. There are many reasons why your case could be dismissed by the Trustee’s Office. The most common reason is failure to make timely and adequate payments to the Trustee. Other reasons include failure to file a Chapter 13 Plan, failure to file tax returns and failure to appear at the Meeting of the Creditors. Keep in mind that we do not warn you that your payments are delinquent. We are not a collection agency, it is your responsibility to be aware of your payment status and to meet the requirements of Chapter 13 Bankruptcy law. If you are not meeting these requirements, we will send you and your attorney a Motion to Dismiss that states the reason your case is up for dismissal. If you receive a Motion to Dismiss, you should contact your attorney or our office immediately and make every attempt to cure the problem. If the problem is not handled, your case will be dismissed on the hearing date stated in the Motion to Dismiss.
· Voluntary Dismissal:
Federal Bankruptcy law allows you to request that your Chapter 13 Plan be dismissed at any time. No one can force you to remain under Chapter 13 if you do not wish to continue. If you desire to stop your case, contact your attorney. We urge you to give careful consideration to such a decision.
· Six Month Activity Report
As long as your Plan is active, twice a year the Trustee’s Office will send you a report showing the last six months activity. You will see history of your payments to the Trustee, and payments made by the Trustee’s office to your creditors. Also shown are the balances owed to each of your creditors. We suggest that you keep all of these reports so you will have a complete history. This information may be useful when filing your annual tax return.
· DIRECT PAYMENTS TO CREDITORS:
Direct payments by you to your creditors are expressly prohibited unless otherwise stated in your Chapter 13 Plan. As well as possibly being illegal, payments made by you to creditors who are to be paid through your Plan would result in these creditors being overpaid with your money.
· NOTICE OF INTENT TO PAY CLAIMS:
Near the Bar Date (See BAR DATE/LATE FILED CLAIMS) or approximately 120 days after the date of the Meeting of Creditors, we will send you a Notice of Intent to Pay Claims. Based on the information submitted in your Chapter 13 Plan and the claims filed by your creditors, this notice reflects the amounts we intend to pay. Please review this notice and notify your attorney if you do not agree with the information. We will pay the amounts listed unless we receive an objection from your attorney. NOTE: If the amount on the claim from a creditor is different than the amount listed in your Chapter 13 Plan, we go by the creditor’s claim unless your attorney objects.
· BAR DATE/LATE FILED CLAIMS:
Creditors are allowed 90 days from the date of the Meeting of Creditors to file a claim. The 90th day after the Meeting of Creditors is referred to as the Bar Date. If a claim is filed after the Bar Date, we will notify you and your attorney of the late filed claim. If your attorney does not object within 20 days, we will pay according to the creditor’s claim.
· SCHEDULE OF PAYMENTS TO CREDITORS:
The Trustee’s office routinely disburses to creditors. There are basically three types of claims: secured, priority and unsecured. All claims are paid on a pro-rata basis according to the dollar amount of the claim. For example, if the claim for your vehicle is equal to half of the total secured claims to be paid by the Trustee, the payment from the Trustee towards the vehicle will be equal to half of the funds to be disbursed per month to your secured creditors (after the trustee fees have been deducted).
· PLAN LENGTH:
The length of your Plan per the Confirmation Order is a close approximation. Over the life of your Plan there are several factors that affect Plan length. Sometimes a claim filed by a creditor reflects a higher dollar amount than what was stated in the Plan. This could mean that it would take more than 60 months to pay all the creditors. (Bankruptcy law dictates that no Chapter 13 Plan shall go over 60 months in length). When this happens, we notify the attorney that the Plan is deficient, the attorney in turn contacts the Chapter 13 filer to discuss filing a Modification (see MODIFICATIONS). Another factor affecting Plan length is creditors not filing claims, which could result in your Plan being completed earlier than originally anticipated. NOTE: If you wish to pay off your case in less than 36 months, you must pay all unsecured creditors in full.
A Modification is an adjustment to a confirmed case that must be approved by the Bankruptcy Judge. Once your case is confirmed, situations may arise making it necessary to adjust your Plan, such as: (1) interruption of income, (2) claims from your creditors coming in for higher dollar amounts that anticipated causing your Plan to be deficient, (3) increasing your monthly payments due to an increase in pay. Your attorney can advise you regarding these and other matters. Remember that the Bankruptcy Judge must approve Modifications.
· BUSINESS CASES:
Chapter 13 filers who are in business for themselves must comply with the same requirements as individual not self-employed. Self-employed filers may send payments to the Trustee with money orders, cashiers checks or business checks. Business case filers may be required to supply additional information to the Trustee before a recommendation regarding confirmation is made. Additional information that is needed will be requested in writing by the Trustee’s Office.
· INSURANCE SETTLEMENT CHECKS:
If your vehicle is totaled and an insurance settlement check is to be issued, contact the Trustee’s office. The settlement check must be sent to the Trustee’s office that will in turn pay the lien holder. Most of the time, we need to talk directly to the insurance company before they issue the check. This only applies to insurance claims on vehicles being paid through you Chapter 13 Plan. All insurance settlement checks that are mailed to the Trustee’s office need to be sent to the CORRESPONDENCE ADDRESS (see QUICK REFERENCE GUIDE).
The Orientation for all Chapter 13 filers is an opportunity for you to ask questions regarding the Chapter 13 process and the procedures followed by the Trustee’s office. Information is also provided on money management and household finances. We strongly recommend that you attend the Orientation before your first meeting of creditors.
· VEHICLE TITLES:
When the secured portion of the claim for your vehicle is paid in full, the lien holder will usually forward the title to you. If the title should be forwarded to the Trustee’s office, it would immediately be mailed on to you. If you know the secured claim has been paid in full and you want to know when to expect your title, call the lien holder, we have no control over the timelines of their procedures.
· TERMINATION OF PAYROLL DEDUCTIONS:
Once it has been determined that we have received all the payments necessary to pay off your case, we will notify your employer in writing and ask him to stop deducting funds from your paycheck.
· CREDIT RATING:
The Trustee has no control over your credit rating. Each credit bureau looks at your past and present credit practices and rates you according to their standards. It is common for Chapter 13 Bankruptcy to stay on your record for seven to ten years.
· ANNUAL INCOME TAX RETURNS:
The Trustee’s office is not in a position to advise you on how to file your income tax return or the amount of interest paid. You may want to refer to your Six Month Activity Report to see how much was paid to your creditors. Upon request, we will send you a copy of any payments made to your creditors form October 1st through December 31st. Unfortunately, the expenses incurred with your Chapter 13 Plan are not deductible for Federal Income Tax purposes.
Currently, the Special Procedures Section of the Internal Revenue Service must process all federal tax returns. This often results in delays of tax refunds being issued. We urge you to file your annual tax return as soon as possible if you are looking for a refund. Also keep in mind that the IRS may apply a refund to taxes owed to previous tax years. NOTE: Applying for a Rapid Refund is prohibited.
The IRS usually sends annual tax refund checks to our offices. We review the status of payments to the Trustee for the particular case, and if current, we forward the check to the appropriate Chapter 13 filer. If the case is dismissed, we return the refund to the IRS per their instructions.
· DISCHARGE OR COMPLETION OF YOUR CASE:
When all allowable claims on your case have been paid in full, the Trustee’s office will notify you or your employer that payments to our office should cease. You or your employer should continue making payments to the Trustee until you receive this notification. We will do a final audit of your case to be sure all matters are in order, then we will issue a Final Report and Accounting which will be mailed to you, your attorney, the Bankruptcy Court and your creditors. The Final Report lists all your creditors and the amounts they were paid. Then you will receive a Notice of Discharge, which contains the same information as the Final Report, followed by a Final Decree, which is the last document you will receive. If you paid in more funds than were necessary to pay off your creditors, the overpayment will be mailed to you after the final audit of your case. Your discharge serves as an injunction against any disallowed creditors or creditors who did not file claims, prohibiting them from taking unauthorized action against you after completion of your case. Claims for some tax matters and student loans are the exception. These claims are not discharged and you are still responsible for these debts even though your case is discharged. It may take six weeks after the issuance of the Final Report for you to receive the Final Decree from the Bankruptcy. We recommend that you retain your Final Report, Notice of Discharge and Final Decree as copies may be requested from you if you apply for future credit.
· LETTERS OF RECOMMENDATION:
If you have successfully completed your Plan and would like a letter of recommendation for use when applying for credit, contact the Trustee’s office. Keep in mind that the better the payment history, the more favorable the letter.