Michael J. Macco, Chapter 13 Trustee

Chapter 13 is the section of the Federal Bankruptcy Code, which allows the debtor(s) to repay a portion or all of his/her debts under the supervision and protection of the Federal Bankruptcy Court. By filing a Chapter 13 petition, something referred to as the Automatic Stay goes into effect, barring creditors from contacting you directly and stopping collection and/or foreclosure proceeding, that may be pending. The debtor(s) must propose a plan that repays a portion or all of his/her debts, and said plan must be confirmed by Order of the Court to become the official repayment plan. The plan can vary in length however, it can be no less than thirty-six (36) months (three (3) years), nor can it exceed sixty (60) months (five (5) years).

Commencing thirty (30) days from the date the petition is filed, or thirty (30) days from the date the plan is filed, the debtor(s) must make regular monthly payments to the Trustee. These payments are submitted to the Trustee (Michael J. Macco) who, in turn, disburses the monies according to the guidelines set forth in the debtor(s)' confirmed plan.

The Chapter 13 Plan is an important part of your case. The plan sets forth all the requirements of the plan, monthly payment amount, duration, which creditors are to be paid inside and outside of the plan, how much said creditors will receive, and other technical matters. The plan is created by the debtor(s) and/or the debtor(s)' attorney (if represented by one).

The Chapter 13 Trustee is the official appointed by the United States Department of Justice's Office of the United States Trustee. The Chapter 13 Trustee is an independent third party, entrusted with the proper administration of a Chapter 13 Plan, as confirmed by the Court, until the completion or dismissal of a case. The Trustee is not your attorney, and the Trustee and/ or staff of the Trustee are prohibited from providing you with any legal advice.

The case number you receive upon the filing of your Chapter 13 petition is EXTREMELY IMPORTANT. The case number is your identification for your case. Always keep it in a convenient place, as you will need it when calling the Trustee's office. Also, your case number MUST be neatly written on any payment, correspondence, and/or documents being sent to the Trustee's office.

Yes, a self-employed person(s) may be eligible to file a petition for relief under Chapter 13. The person(s) involved in the business may continue to operate the business during the Chapter 13 case.

A Pro-Se Debtor(s) is a debtor(s) who chooses to file a Chapter 13 petition without being represented by a licensed attorney. By filing in this manner, you are entirely responsible for representing yourself in Court for any and all hearing related to your case. You are also responsible for the proper filing of any and all documentation vital to the survival of your case.

If you represent yourself, you must make yourself knowledgeable to the Bankruptcy Law, Bankruptcy Rules, and the Local Rules of the Eastern District of New York.

If you have received assistance from any person(s) in preparing your petition, you MUST provide the Trustee with a receipt, business card, or written information from the individual, at your §341(a) meeting of creditors.

This meeting allows for the Trustee and creditor(s) to examine the debtor(s) and assess what documentation might need to be submitted for evaluation by the Trustee. This examination is conducted under oath and will consist of the Trustee, debtor(s), debtor(s)' attorney (if applicable), as well as any creditor(s) that wish to attend.

The debtor(s) is obligated to supply the Trustee with mandatory disclosure documentation. This information must be supplied to the Trustee at least ten (10) days prior to the first scheduled §341(a) meeting.

Mandatory disclosure documentation is required by Local Bankruptcy Rule 2003-1, and consists of the following:

(a) No later than ten (10) days before the first date set for the meeting of creditors pursuant to 11 U.S.C. §341(a), each debtor shall provide the following documents to the Case Trustee:

(i) copies of signed, filed state and federal income tax returns for the two most recent tax years for debtor(s);

(ii) copies of four (4) most recent pay stubs for debtor(s);

(iii) copies of affidavit(s) of contribution and copies of four (4) most recent pay stubs for each person contributing to the proposed plan or to payment of expenses of the debtor(s)’ household;

(iv) documentation (other than tax assessments) of the current value of all real property, condominiums, cooperative apartments, vacant land, cemetery plots and/or timeshares in which debtor(s) ha(s/ve) an ownership interest (except that this information is not required in those Chapter 13 cases where the debtor(s) propose(s) to pay 100% to unsecured creditors);

(v) copies of lease(s) for all property rented out by debtor(s);

(vi) copy of affidavit of changed circumstances, setting forth the details of all debtor(s)’ prior filings, identifying specifically the reason(s) for the failure of prior case(s), and detailing debtor(s)’ current economic circumstances (only applicable to debtor(s) who previously filed a Chapter 13 petition); and

(vii) copies of canceled checks, receipts or money orders documenting payment of all mortgage installments and lease payments that have come due since the petition was filed.

(b) The original affidavit(s) of contribution and changed circumstances, required by LBR 2003-1(a)(iii) and (vi) above, must be filed with the Clerk.

(c) Debtor(s) shall also provide promptly to the Case Trustee any other documents within the scope of Fed. R. Bankr. P. 2004(b) that the Case Trustee may request from time to time in the course of this case.

The debtor(s) MUST appear at the §341(a) meeting of creditors pursuant to the Bankruptcy Code. Failure to appear can be considered grounds for the Trustee to move the Court to dismiss the case.

The debtor(s) MUST produce their Social Security card and government issued identification, such as a driver's license, military identification, or passport. The Trustee WILL NOT examine a debtor(s) that does not supply valid identification.

The Trustee and his staff can provide you with information about your case ONLY. They cannot provide legal advice and/or act as your attorney. They can provide you with information such as payments posted to your case and payments remitted to your creditor(s). The Trustee's office is here to help you in successfully completing your plan, in any way possible. Moreover, the Trustee's staff will not draft documents on your behalf.

NOTE: The Trustee's staff is available to receive calls daily from 2p.m. - 4p.m. ONLY, except all federal holidays, and the Friday after Thanksgiving.

It is imperative to inform the Trustee and the Bankruptcy Court regarding any change of address. The possibility exists that failing to inform either entity of an address change, can impede service of important documents vital to your case.

NOTE: You MUST inform the Trustee and the Court IN WRITING ONLY!!! This information cannot be accepted over the phone, for any reason whatsoever.

Not necessarily, priority debts (alimony, child support, certain taxes, etc.) and fully secured debts must be paid in full. Unsecured debts, if any, can be paid at a fixed or pro-rata (equal share of available funds) percentage according to the debtor(s)' income and expenses. Following a specific formula, and providing for Trustee commissions, if a debtor(s)' income is high enough to pay all unsecured debts in full, the debtor(s) will need to propose a 100% distribution plan. However, in a less than 100% plan, the remaining percentage of unsecured debts that are not paid through the plan are discharged upon the completion of the plan.

15. How much of a debtor(s)' income must be paid to the Trustee under the plan?

Disposable income is income received by the debtor(s), that is not reasonably necessary for the support of the debtor(s)' dependants. A review of the debtor(s)' expenses is part of the §341(a) meeting of creditors.

17. When must the debtor(s) begin making payments to the Trustee and how must they be made?

The debtor(s) must begin making payments to the Trustee within thirty (30) days after the debtor(s)' plan is filed with the Court, and said plan MUST be filed within fifteen (15) days of the case being filed. The payments must be made regularly, usually on a monthly basis. If the debtor(s) is employed, the payments can be made by either the debtor(s), or the debtor(s)' employer following the filing of a voluntary wage order.

NOTE: ALL PAYMENTS MUST BE MADE BY CERTIFIED CHECK, BANK CHECK, OR MONEY ORDER ONLY.

A voluntary wage order is NOT a garnishment. This order can be requested by the debtor(s) to have the monthly plan payment withheld directly from the debtor(s)' earnings, and forwarded directly to the Trustee's office. You must inform your employer to clearly print your name and case number on the payments. If you are interested in such an order, you are responsible for all payments to the Trustee until such time as your employer commences payments.

Generally, a Chapter 13 plan lasts for a period of thirty-six (36) to sixty (60) months. If all debts can be paid in less time, the plan duration will be shortened.

No, they do not. To be confirmed, the plan must be approved by the Court, not the creditors. However, the Court cannot confirm a plan unless secured creditors are treated in the proper manner. Unsecured creditors are allowed to file objections to the plan, and said objections will be heard before the Court at the confirmation hearing.

Objections are usually based on the failure of creditors to receive under the plan, less than they would receive under liquidation, or that the debtor(s)' expenses are unusually high.

All payments must be in guaranteed funds, such as certified checks, bank checks, or money orders. UNDER NO CIRCUMSTANCES WILL CASH OR PERSONAL CHECKS BEACCEPTED FOR PAYMENT. All payments must have your name and case number clearly printed on them, in order to deposit the payments in a accurate and timely manner. THE TRUSTEE DOES NOT ACCEPT ATTORNEY CHECKS.

A pending Chapter 7 can be converted to Chapter 13 upon the request of the debtor(s), if it has not previously been converted from Chapter 7 to Chapter 13.

Unless other arrangements are provided in your plan, you are to make all post-petition payments directly to the entity owed.

24. What will happen if I become delinquent and/or cannot make my plan payments?

You MUST make payments to the Trustee each and every month, unless otherwise ordered by the Court. If you cannot continue to make your payment, you should speak to your attorney (if applicable), to discuss your options and to prevent a Notice of Motion to Dismiss being filed by the Trustee. THIS IS A SERIOUS SITUATION. If your case gets dismissed by the Court, you NO LONGER have the protection of the Court, and creditors can resume collection or foreclosure proceedings against you.

25. What can I do if I receive a Notice of Motion to Dismiss my case from the Trustee?

If you receive a Notice of Motion from the Trustee's office you should contact your attorney (if applicable) immediately. Your case will be in jeopardy of being dismissed. By contacting your attorney (if applicable), you might be able to work out a resolution and prevent your case from being dismissed.

A Notice of Motion is a request to have a hearing before the Court on the grounds of various defaults. This method provides a set hearing date that the Motion will be heard before the Judge, provided that a written objection is filed with the Court and served on the Trustee at least three (3) day prior to the hearing date.

A Notice of Presentment is similar to a Motion, except that there is not always a court hearing. This method requests for an Order dismissing a case, be signed by the Judge in chambers without a hearing. The only way the request can be heard before the Judge in Court, is if the debtor(s) file a written objection, and serve it upon the Trustee at least three (3) days prior to the presentment date.

- Failure to make timely plan payments.
- Failure to provide documentation requested at the §341 meeting
- Failure to provide mandatory disclosure documentation
- Failure to appear at the §341 meeting
- Failure to file a complete set of schedules
- Failure to propose a plan that pays all proofs of claim; and
- Failure to propose a plan that pays creditors more than they would receive through liquidation

29. What should I do if I receive a Motion from a creditor seeking to obtain relief from the Automatic Stay?

Any questions regarding a motion by a creditor, cannot be answered by the Trustee nor his staff. You MUST contact the creditor, creditor's attorney, or your attorney (if applicable).

- the plan complies with legal requirements of Chapter 13 of the Bankruptcy Code;
- all required fees, charges, and deposits have been made;
- all priority claims will be paid in full under the terms of the plan;
- the plan was proposed in good faith;
- each unsecured creditor will receive more than they would through liquidation; and
- it appears within reason that the debtor(s) will be able to make plan payments

31. What happens if I am contacted by creditor(s) after I have filed for bankruptcy?

Under no circumstance, can any of the creditor(s) listed on your petition contact or harass you in any manner. If you are contacted by a creditor(s), you should supply them with your name and case number and refer them to your attorney (if applicable).

NOTE: You must list all creditors to whom you are indebted to in your Chapter 13 petition. You cannot list only those creditors whom you wish to pay. Failure to list all creditors is a ground for dismissal of your Chapter 13 case.

If you should happen upon this type of situation, you must file an amendment to your schedules to add these creditors.

A proof of claim is the official form filed by your creditor(s) file with the Court to indicate what type of claim they have (secured, priority, or unsecured), and how much they are owed. All creditors MUST file a proof of claim to receive payments through your case. Creditors have ninety (90) days from the first §341 meeting to file a claim. Governmental agencies (IRS, NYS, etc.) have a 180 day filing period. You may file a claim on behalf of any creditor, to insure that all creditors get paid in a timely manner.

If your plan is not confirmed by the Court, you will be informed of the reasons why. At such time, you can amend your plan to address the incorrect issues, and propose the amended plan. If you choose not to amend your plan, you can convert the case to a Chapter 7 proceeding or dismiss the case.

You MUST appear at the §341 meeting. You will also need to appear at your confirmation hearing if you are a Pro-Se debtor(s). If you are represented by an attorney, you should contact him/her to find out if your appearance is necessary. In addition, you may need to appear before the Court at other times for motions and/or adversary proceedings. You should always contact your attorney (if applicable) upon receiving any documents from the Trustee or a creditor.

If you are temporarily disabled, unemployed, etc., and you temporarily cannot make plan payments, you should contact your attorney (if applicable) IMMEDIATELY.

Yes, you can modify your plan after confirmation. Usually this occurs if your financial situation has changed for the better or worse. To go about this, you should contact your attorney (if applicable) to move the Court by Motion to Modify Plan Post-Confirmation.

The Trustee pays creditors based on the classification of their claim. Usually attorney fees are paid first, priority claims paid second (IRS or state income taxes), secured claims third (mortgage arrears or auto loans), and unsecured claims (credit cards, etc.) last. This can be modified by the terms of your plan.

The monies received by the Trustee are disbursed to your attorney for any unpaid legal fees, and all creditors accordingly. Payments to creditors who have timely filed their claims, begins AFTER the case is confirmed, approximately six (6) months after filing.

It is the right of the debtor(s) to request that their case be dismissed or converted to Chapter 7 at any time for any reason. To handle this situation properly, you should contact your attorney (if applicable) immediately.

40. Can I sell or re-finance my house or other property while in Chapter 13?

You must obtain the Trustee's written permission to sell or re-finance your house or other property.

41. What is the benefit of selling or re-financing my house or other property?

You can payoff your entire bankruptcy and receive a discharge by this method, by turning over the payoff amount to the Trustee.

42. What information must I obtain from the Trustee to proceed with a payoff?

The only way to receive a payoff amount is by written request, either mailed or faxed, to the Trustee requesting permission to sell or re-finance, and the amount necessary to complete the plan as confirmed. The Trustee will respond to your request in writing in a timely manner. The Trustee WILL NOT, under any circumstance, provide the payoff amount over the phone.

Some title companies request the debtor(s) to obtain a Court Order to approve the sale or re-finance. You must obtain this Order yourself on notice to the Trustee.

NOTE: THE TRUSTEE WILL ONLY PROVIDE ONE PAYOFF LETTER EVERY THIRTY (30) DAYS.

Once the Trustee has given you permission you can go ahead with the sale or re-financing process. However, you must contact the Trustee's office before scheduling a closing, as the closing must be scheduled at the Trustee's convenience.

The Trustee will accept payment of the payoff amount in the form of a bank check, certified check or money order. THE TRUSTEE NOW ACCEPTS WIRE TRANSFERS OF THE PAYOFF AMOUNT. No attorney escrow checks, IOLA checks, or mortgage disbursement checks are accepted by the Trustee.

Please note, that payoffs done via wire transfer will allow my office to issue the pre-petition arrears check(s) within twenty-four (24) hours. However, non-wire transactions will result in a delay in the preparation of the pre-petition arrears check(s) of seven (7) days.

You will receive a Trustee's Report of Receipts and Disbursements every six (6) months, the end of every March, and the end of every September. Please examine this report VERY CAREFULLY, comparing your payment receipts with those posted to the Trustee's system. If there is a discrepancy with your receipts and what the Trustee has posted, please contact the Trustee's office immediately.

In addition, you may request to have a report sent to you at any time. All you need to do is call or write the Trustee's office requesting one.

NOTE: DO NOT USE THE 'REMAINING BALANCE' STATED ON THE REPORT AS THIS IS NOT ALWAYS CORRECT, AS THE INTEREST AND TRUSTEE FEES MAY CHANGE. YOU SHOULD ALWAYS WRITE THE TRUSTEE TO REQUEST A CORRECT FIGURE.

Once all creditors have been paid, the Trustee will file a Certification of Completed Plan with the Bankruptcy Court. Sometime thereafter, the Court will issue an Order Discharging the Debtor(s), and serve this Order upon all parties involved in the case.

Once all creditor checks have cleared the Trustee's bank, the Trustee will file a Final Report and Account with the Court showing proof that all claims were paid pursuant to the confirmed plan. Sometime thereafter, the Court will issue a Final Decree closing your bankruptcy case. A Final Report is usually filed within 120 days of receiving the last payment.

46. What do I do with my Discharge Order and Final Decree once I receive them?

It is advised that you keep these documents in a safe place to keep from loss, theft or damage. You may need to refer to them if a creditor contacts you stating that they were not paid in your bankruptcy.

Depending upon whether the case is closed, and how long ago it was closed, you should be able to obtain these documents by requisitioning the Court's file. The only charge you will incur at the Court is for use of the photocopy machine.

If you are unable to get these documents from the Court, you may contact the Trustee's office. Depending upon whether the case is in storage or not, you may be charged a $50.00 fee to retrieve the documents from the offsite storage area. This does not include the copying of any creditor disbursement checks, which can be obtained at a $15.00 per check charge. All the aforementioned fees must be paid in advance of retrieval.

NOTE: ALL PAYMENTS FOR FEES MUST BE IN THE FORM OF A BANK CHECK, CERTIFIED CHECK, OR MONEY ORDER.

Your credit rating is based upon the opinion of the creditor you are applying for credit with. It will take time to rebuild your credit. You may contact the three (3) primary credit- reporting agencies and inform them that you have successfully completed your bankruptcy and have received a discharge. You should contact the agencies in writing, providing your name social security number, all addresses within the past five (5) years, your date of birth and signature. Also, send them a copy of your Discharge Order and Final Report as proof of successful completion of the bankruptcy.