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Chapter 13 Payments

Local Rule Number: 
Rule 3070-1
3000 Series

(A)       Commencement of Payments.

(1)        Deadline to Commence.  Payments to the chapter 13 trustee pursuant to the proposed plan, as may be amended, shall commence not later than 30 days after filing the petition.  If the case was converted to a chapter 13 case, payments shall commence not later than 30 days after entry of the conversion order.  Payments shall be made directly to the trustee in the manner prescribed by the trustee.

(2)        Scope of Payments.

(a)        Payments of personal property leases governed by 11 U.S.C. §1326(a)(1)(B), shall only be made directly by the debtor to the lessor if the debtor’s plan so provides or if no plan provision addresses payment of the debtor’s lease obligation.  If the plan provides for payment of the lease obligation by the trustee, the debtor shall make the pre-confirmation lease payments to the chapter 13 trustee in accordance with the filed chapter 13 plan.

(b)       Pre-confirmation adequate protection payments governed by 11 U.S.C. §1326(a)(1)(C), shall only be made directly by the debtor to the secured creditor if the debtor’s plan so provides or if no plan provision addresses payment of the secured claim.  If the plan provides for payment of the secured claim by the trustee, the debtor shall make the pre-confirmation payments to the chapter 13 trustee in accordance with the filed chapter 13 plan.

(3)        Pre-confirmation Payments to be Held by Trustee.  Unless otherwise ordered by the court, to facilitate the administration of chapter 13 cases, all pre-confirmation payments shall be held by the chapter 13 trustee pending confirmation, conversion or dismissal of the case and where applicable, Local Rules 1017-2(F) and 1019-1(E) shall apply.

☞2016 Amendment: Citation to Local Rule 1019-1 amended to reflect adoption of Interim Local Rule 1019-1 by Administrative Order 2016-02.

(B)       Post Confirmation Payment Changes or Charges.

(1)        Applicability of Bankruptcy Rule 3002.1 to Additional Types of Claims Related to Real Property.  The provisions of Bankruptcy Rule 3002.1 shall also apply to claims that are:

(a)        secured by a security interest on real property of the debtor other than the debtor’s principal residence (including without limitation claims of condominium associations and homeowner’s associations); and

(b)       for which the plan provides that either the trustee or the debtor will make contractual installment payments and which payments are subject to change.

[Comment: Bankruptcy Rule 3002.1 by its terms requires the filing of payment change and certain other notices relating only to security interests in the debtor’s primary residence, and only where the plan provides that either the trustee or the debtor will make contractual installment payments. The local rule extends that filing requirement from claims secured by primary residences to claims secured by any real properties. However, the trustee does not care to receive, and the secured creditor must not file, notices of payment change where the plan payments to that creditor are not through the trustee or are not going to change under the loan documents.]

(2)            If the plan’s treatment of a claim secured by a security interest in real property is not covered by subsection (B)(1) of this rule, filing of notices of payment change is prohibited.

(3)             With respect to claims in connection with which creditors are directed not to file notices of payment change under subsection (B)(2) of this rule, the holder of the claim may send notices of payment change and escrow notices directly to the debtor without violating the automatic stay.

(4)             Upon motion by the debtor, the court will consider awarding sanctions against a creditor that files a notice of payment change not required under Bankruptcy Rule 3002.1 and that is expressly deemed unnecessary under this rule.

(5)        Modifications to Official Bankruptcy Form “Notice of Mortgage Payment Change” Required.  When a notice of payment change is filed addressing a claim covered under subdivision (B)(1) of this Rule, the Official Bankruptcy Form “Notice of Mortgage Payment Change” shall be modified accordingly to reflect the actual type of claim for which the notice is being filed.

[Comment: In this district, payments on mortgages and other voluntary liens on real property are often cured and maintained under Section 1322(b)(5) by payments through the trustee under the plan. Bankruptcy Rule 3002.1 by its terms requires the filing of payment change and certain other notices only to security interests in the debtor’s primary residence, and only where the plan payments are for cure and maintenance under Section 1322(b)(5). The local rule now extends that filing requirement from claims secured by primary residences to claims secured by any real properties, and from cure-and-maintenance treatment under Section 1322(b)(5) to all treatment of such claims where the payments through the trustee are subject to change. However, the trustee does not care to receive, and the secured creditor must not file, notices of payment change where the plan payments to that creditor are not through the trustee or are not going to change under the loan documents.]

☞ 2016 Amendment: Local Rule 3070-1 has been amended to reflect adoption of Interim Local Rule 3070-1 by AO 2016-06.

(C)       Dismissal of Case for Failure to Timely Remit Payments.

(1)        Dismissal at the Meeting of Creditors.  If, at the meeting of creditors, the debtor is not current in plan payments under the plan as originally filed, the chapter 13 trustee is authorized by the court to docket in the case a virtual paperless entry titled “Trustee’s Request for Entry of Order Dismissing Case” and the case may be dismissed without further notice or hearing.  Dismissal shall be with prejudice to the debtor filing any bankruptcy case for a period of 180 days from entry of the order of dismissal, or the expiration of any prejudice period set in any previous order still in effect, whichever is later.

(2)        Dismissal Subsequent to Confirmation.

(a)        Notice of Delinquency.  The trustee may, upon the debtor’s failure to timely make any payment, serve a notice of delinquency upon the debtor and the debtor’s attorney, along with a copy of this rule.

(b)       Deadline to Cure Delinquency.  The debtor shall have 45 days from the date of the notice of delinquency to make all payments due under the plan, including any payments that become due within the 45-day period.  If applicable, the debtor may, within 14 days of the notice of delinquency, file a motion to modify the confirmed plan.

(c)        Failure to Cure.  If the debtor is not current in plan payments on the 45th day after the date of the notice of delinquency, the trustee shall file and serve a report of noncompliance and the case shall be dismissed without further notice or hearing, with prejudice to the debtors filing any bankruptcy proceeding for a period of 180 days from entry of the order of dismissal, or the expiration of any prejudice period set in any previous order still in effect, whichever is later.

(D)       Wage Deduction Orders – Deadline for Submission of Local Form.  A debtor who is not self-employed must submit a proposed Local Form “Agreed Order to Employer to Deduct and Remit and for Related Matters” to the court prior to the meeting of creditors.  The proposed order must be signed by the debtor and debtor’s attorney.  If the proposed order is submitted to the court in electronic format, the order must contain the actual imaged signature of the debtor.  The attorney for the debtor, or clerk of court, if the debtor is pro se, shall serve the order on the employer.  If a wage deduction order has not been entered the court will conduct an evidentiary hearing to determine feasibility at the confirmation hearing.  The court will not confirm a case without a wage deduction order in place, absent extenuating circumstances.

(E)        Determination of Final Cure Payment.

(1)       Applicability of Bankruptcy Rule 3002.1.  The provisions of Bankruptcy Rule 3002.1 shall also apply to any chapter 13 case where the debtor’s plan provided for the curing of defaults on a claim secured by a security interest on real property other than the debtor’s principal residence.

(2)       Local Form Order Required.  A proposed order confirming a claim secured by a security interest in real property is current, submitted by a party to the court under Bankruptcy Rule 3002.1 or this local rule, shall substantially conform to this court’s Local Form “Order Determining Debtor has Cured Default and Paid All Required Postpetition Amounts”.

☞ 2015 Amendment: Amends rule to clarify when a notice of payment change should and should not be filed. Conforms text of local rule to provisions in dismissal order regarding with prejudice duration. Incorporates, as applicable, interim provisions adopted under Administrative Order 12-04 and 11-03.