Chapter 13 Clients
What You Need to Know

Here you will find information regarding the following:

  • Bankruptcy Filing and Creditors Notified
  • Financial Management Course Information
  • Creditors Meeting and the Trustee Information
  • Chapter 13 Payments
  • Mortgage and Homeowner Association Dues
  • Taxes and Child Support / Alimony
  • Automobiles
  • Employment and Other Income Changes
  • Information for Chapter 13 Clients

Bankruptcy Filing and Creditors Notified

When will my bankruptcy be filed with the Court?

Your bankruptcy will most likely be filed either the day you sign the bankruptcy petition or the next day unless there is a mutually agreeable reason to hold your bankruptcy filing.

When will my creditors be notified of my bankruptcy filing?

Creditors will be notified by mail of your bankruptcy filing within 5 days of the date you filed. They will be provided your case number, the date your bankruptcy was filed, your attorney’s address and phone number, the Trustee’s address and phone number as well as the bankruptcy court’s information. This is why it is important to include the correct address for your creditors when you are filling out your bankruptcy workbook our office provided when you signed the contract.

One of the benefits of filing bankruptcy is that it stops creditor harassment. Should you receive a call or inquiry from a creditor, let them know you have filed bankruptcy, give them your case number, tell them you filed in the Western District of North Carolina (Charlotte clients) or the Middle District of North Carolina (Greensboro clients), let them know who your Duncan law attorney is and instruct them to contact our office if they have any further questions. You can also direct your creditors to our website for additional information specifically for your creditors.

What should I do if a creditor continues to contact me?

If a creditor continues to call you AFTER you have provided them your case information, please give them the information again BUT take the person’s name and the date and time they called. If a creditor continues to call, and you document these calls thoroughly, our office may be able to file for sanction against the creditor.

In the rare circumstance that a creditor continues to call, obtain the name of the person that calls and the date and time they called. You should then contact our office and we will also contact the creditor to remind them to stop contacting you.

You may receive statements, bills or invoices from your creditors the first month after your bankruptcy is filed. This is not unusual since they must update their system to reflect your bankruptcy. If you continue to receive statements, bills or invoices from your creditors, please contact them and remind them you have filed bankruptcy and give them our telephone number to call for any further information. Be sure to document the name of the person you spoke to and the date and time you spoke with them.

Again, it is extremely rare, but if a creditor continues to contact you after your bankruptcy filing, there are legal actions we may take against that creditor. However, we must be able to show documentation as to when and how the creditor was provided your bankruptcy information. As a result, be sure to keep documentation of the dates, times and person(s) you spoke with for that creditor. Without this information, we will not be able to take legal action against the creditor.

Financial Management Course Information:

When do I need to take the Financial Management course?

As you know, you must take a financial management course and file the certification with the bankruptcy court to receive a discharge in your bankruptcy. We recommend you take the financial management course as soon as you receive your case number but before your creditors meeting. If you are married, each person must take the course separately, and you and your spouse will receive two different control numbers. Most of our clients take the course online at Hummingbird Credit Counseling and Education, Inc. This is important. If you have any questions regarding when to take the financial management course, please contact our office. If you have questions regarding the actual course on the Hummingbird Credit Counseling website, please contact Hummingbird at the phone number listed on their website.

What should I do after completing the Financial Management course?

Prior to your creditors meeting, bring the control number(s) or affidavit(s) to our office along with a money order or certified check made payable to Duncan Law, PLLC. The fee is $8 if single and $16 if married. Your signature on the affidavit may be witnessed by one of the notary publics at our office. You should contact our office one week after you have provided us the control number(s) or affidavit(s) to be sure the certification has been successfully filed with the Court. It is your responsibility to make sure the financial management certification has been filed with the Court. If you have taken the course but simply failed to have your certification filed with the Court prior to your expected discharge date, the Court will close your case and you will not receive a discharge of your debts.

What if I forget to take the financial management course or forget to have it filed with the bankruptcy court before my case is closed?

If the bankruptcy court were to close your case without a discharge because you failed to take the financial management course, you will be required to file a motion with the bankruptcy court to reopen your case. The court’s current cost to reopen the case is $260 for a Chapter 7 bankruptcy. There will also be substantial additional attorney fees to file the motion and obtain the order from the bankruptcy court. Once the case is reopened, you are required to take the financial management course and bring the control number or affidavit along with the fee to our office. Our office does not want you to incur any additional cost or inconvenience from not taking and filing the financial management certification. That is why it is extremely important that you complete and file the financial management certification in a timely man

Creditors Meeting and the Trustee Information

What is the date of my creditors meeting?

Your creditors meeting will occur approximately 30 to 45 days after your bankruptcy is filed. You will receive a notice in the mail from the Court within twenty (20) days of the filing of your bankruptcy regarding the date and time of your creditors meeting. If you do not receive a notice, please contact our office.

Who is the Chapter 13 Trustee?

The Chapter 13 Trustee is appointed by the federal government to disperse your monthly Chapter 13 bankruptcy payments to your creditors. If you do not make your monthly payment to the Trustee, he will not pay your creditors. For example, if you do not pay the Trustee each month, he will not pay the mortgage company for what you are behind on your house payments or the finance company for your car payments.

What happens at the creditors meeting?

You will be sworn-in by a court official at the beginning of the creditors meeting. You will also be required to sign the Debtor(s) Certification and Affidavit. Terry will have a copy of this agreement for you at the creditors meeting.

The Trustee or your creditors may ask you questions regarding your bankruptcy schedules. The actual time you are in front of the Trustee is relatively short. Do not be concerned if there are no questions for you … that is good news. Check out this video and blog post about what to expect at the creditors’ meeting.

What types of questions will the Trustee ask me at the creditors meeting?

We will have discussed these at your bankruptcy signing appointment, but here is a list of possible questions. There may be others we discussed that pertain specifically to your bankruptcy case.

Did you review your bankruptcy schedules before signing your bankruptcy in Duncan Law’s office?

Do you need to make any changes for events that have occurred since you filed your bankruptcy? If there are changes, you should contact our office in advance of your creditors meeting so we can make the appropriate changes.

How did you determine the value of your house?

How did you determine the value of your car?

Do you have documentation that your 401/retirement plan is ERISA qualified? As we discussed, this can be obtained from your employer or online if the administrator of your retirement plan has a website. You should request this information after your bankruptcy signing appointment in my office, since it may take a week or so to obtain the information. Basically, ERISA qualified plans have been reviewed by the Internal Revenue Service and have been determined to meet the requirements that would allow your plan to be fully protected in bankruptcy. Be sure to bring this information with you to the creditors meeting.

Do you have support for the 401/retirement plan balance listed on your bankruptcy? You should have used your most recent statement plus any additional amounts withheld since the statement date.

Have you filed your taxes for the past four (4) years? If you have not filed your taxes, or if the Internal Revenue Service or the state department of revenue has not received your taxes, the Trustee may file an objection to the approval of your bankruptcy which could lead to the dismissal of your case.

Will all of my creditors be at the creditors meeting?

Often, the Internal Revenue Service is the only creditor at the meeting. If a creditor does appear, it is usually to ensure they continue to receive domestic support (child support, alimony) or because they believe they may have been defrauded.

CHARLOTTE OFFICE CLIENTS:

Where do I go for my creditors meeting, where do I park, etc.?

Charlotte Area:

Where: If you live in Mecklenburg, Union, Anson, Cabarrus, Stanly or Gaston County, Warren L. Tadlock will be your Chapter 13 Bankruptcy Trustee. Your creditors meeting will be held in Charlotte at 402 West Trade Street, directly across the street from the Charles Jonas Federal Building. You should find this building BEFORE the day of the creditors meeting.

Parking: You may park on the street with metered parking or in one of the parking lots around the area. If you park on the street, we suggest you put in enough change for 2 hours, approximately $2. If the meter expires, you will receive a $25 parking ticket. The parking lots cost between $4 and $9 for all day parking. Be sure and bring plenty of one dollar bills to pay at the parking lots, because many do not give change.

Shelby Area:

Where: If you live in Cleveland or Lincoln County, Steven Tate will be your Chapter 13 Trustee. Your creditors meeting will be held in Shelby at the courthouse. You should arrive at least an hour earlier than your meeting since the security lines are usually extremely long. The address is Cleveland County Courthouse, 100 Justice Place, Shelby. You should find the courthouse BEFORE the day of the creditors meeting.

Parking: Parking is available around the courthouse.

Wilkesboro Area:

Where: If you live Catawba or Iredell County, Steven Tate will be your Chapter 13 Trustee. Your creditors meeting will be held in Wilkesboro at the courthouse. The address is Johnson J. Hayes Federal Building, 207 W. Main St., Wilkesboro. (See map) Be sure you go to Wilkesboro, not the adjoining city of North Wilkesboro. You should find the courthouse BEFORE the day of the creditors meeting.

Parking: Parking is available around the courthouse.

GREENSBORO AREA CLIENTS:

Greensboro Creditor’s Meeting

Where: First Floor Creditors Meeting Room, 101 South Edgeworth Street, Greensboro, NC

Parking:

  • No Parking Available At Site
  • Street-level public parking lot at corner of South Eugene and Washington Streets (2 blocks from building)
  • Public parking garages (all 4-6 blocks from building)
    • 109 E. Market Street
    • 211 S. Greene Street
    • 220 N. Greene Street
    • 215 N. Church Street

Directions:

  • Interstate #40/#85 to Elm-Eugene exit, north into Greensboro business district, left onto Washington Street, right onto Edgeworth Street;building is on SE corner of Edgeworth and Market Streets
  • Interstate #40 to Freeman-Mill exit, north into Greensboro (becomes Edgeworth Street in the business district); building is on SE corner of Edgeworth and Market Streets

Winston-Salem Creditor’s Meeting

Where: First Floor Creditors Meeting Room, 226 South Liberty Street, Winston-Salem NC

Parking:

  • Limited Free Parking Available At Site
  • Public parking garage at “Triad Park” [4 blocks from building]

Directions:

  • Traveling west on Interstate “Business #40″ to Main Street exit, turn right onto Main Street, turn left onto 1st Street, turn left onto Liberty Street, turn right at light (Cemetery Street), street dead-ends at “Bankruptcy Court Building”
  • Traveling east on Interstate “Business #40″ to Salem College/Old Salem/Downtown exit (5D), turn right onto Liberty Street, turn right at light (Cemetery Street), street dead-ends at “Bankruptcy Court Building”

Durham Creditor’s Meeting

Where: Venable Center, Dibrell Building – Suite 280, 302 East Pettigrew Street, Durham, NC

Parking:

  • There is very limited parking available at the Venable Center.
  • There are approximately 25 free, 1-hour parking spaces available on E. Pettigrew St. between S. Roxboro St. and Corcoran St.
  • There is a public parking deck close by. To reach the parking deck from Venable Center:
  • Head Northwest on E. Pettigrew St.
  • Travel through 2 stoplights, then turn RIGHT on Corcoran St.
  • Make an immediate RIGHT on Ramseur St./Downtown Loop.
  • The parking deck will be on your LEFT immediately after crossing S. Mangum St. (which is the very next stoplight). The entrance to the parking deck is on Ramseur St.

Do I need to bring anything to my creditors meeting?

Unless specific instructions were given to you, you will only need:

  1. your photo identification, and
  2. social security card

What else do I need to know about my creditors meeting?

On the day of your creditors meeting, you will meet your Duncan Law attorney at the Trustee’s office or the courthouse as directed. You will receive a letter from our office reminding you what time to arrive at the Trustee’s office or courthouse. You will arrive at the time on the letter from our office, not the time on the creditors meeting notice. As a result, you will be asked to arrive 30 minutes to 1 hour prior to your scheduled creditors meeting. Please do not be late, since Terry, Damon or Melissa will not be able to speak with you once the creditors meeting begins.

You must bring your driver’s license and social security card to your creditors’ meeting. This is to validate your identity. If you do not bring these items, your case could be dismissed.

There are NO excuses for missing your creditors meeting unless you are hospitalized or it is your death! If you miss the creditors meeting, the Trustee has the right to dismiss your case.

Chapter 13 Payments – Charlotte Office Clients

Where do I send my Chapter 13 payments?

We have estimated your Chapter 13 plan payments and you were given that amount at your signing appointment. Your first payment is to be paid to your Chapter 13 Trustee by certified check or money order and mailed within 10 calendar days of the date you signed your bankruptcy petition in my office.

If your Trustee is Mr. Tadlock, his address for all payments is as follows, and you should confirm this address at www.13network.com/chahome.htm lockbox address for debtor payments:

Warren L. Tadlock, Chapter 13 Trustee
PO Box 792
Memphis, TN 38101-0792

If your Trustee is Mr. Tate, his address for all payments is as follows, and you should confirm this address at www.13network.com/stahome.htm lockbox address for debtor payments:

Steven G. Tate, Chapter 13 Trustee
PO Box 613136
Memphis, TN 38101-3136

Your second payment to Mr. Tadlock or Mr. Tate is due on the day of your meeting of creditors which occurs approximately 30 days after your signing appointment with Terry. The payment should be made by certified check or money order and payable to your Trustee.

Where do I send payments in the future?

Unless otherwise directed by the Trustee, all future payments will be made to Mr. Tadlock or Mr. Tate and mailed to the address listed above. You cannot hand deliver your payment to the Trustee’s office. Remember, all payments must be made by certified check or money order. On the certified checks or money orders be sure to have your name and case number somewhere on the certified check or money order. No cash, personal checks or electronic checks will be accepted by the Trustee. In almost all cases, the Trustee will mail labels along with other instructions to you prior to your meeting of creditors.

Can my Chapter 13 payments change?

The Trustee may change your payments at the creditors meeting or at any time in the future if your creditors file a claim stating that you owe more than what was included in your original bankruptcy filing, you incur additional legal fees or there is a change in your monthly mortgage payments. For example, if you thought you were behind $5,000 on your house payments but the mortgage company indicates it is $8,000, your Chapter 13 payments will need to increase to pay the mortgage company back in full.

Where do I get additional mailing labels?

If you need additional mailing labels for the Trustee, simply include a note with your payment requesting additional labels or send a request to the Trustee’s correspondence address which is accessible on their website. You may choose either Mr. Tadlock or Mr. Tate depending on your assigned trustee.

When are my Chapter 13 bankruptcy payments due to the Trustee?

Your payments are technically due to the Trustee on the 1st day of each month but no later than the 15th day of each month. You should give adequate time for the post office to deliver your payment. Should you send the payment via overnight mail, you must use the United States Postal Service. It is the only service that will deliver overnight to a Post Office box.

What if I miss a payment to the Trustee?

If you miss a payment to the Trustee, he has the legal right to garnish your wages, dismiss or modify your plan payments.

If he garnishes your wages, he will send a court order to you and your employer instructing your employer to deduct your Chapter 13 payment from your wages. It is your responsibility to ensure your employer is taking the correct amount of money from your check. Your employer will usually spread the wage garnishment equally over each pay period of the month. Of course, this depends on how your employer has their payroll setup.

Example if Chapter 13 Bankruptcy Payment is $300/month:

Payroll Frequency Number of Pay Periods Per Year Amount Deducted from Each Check How Did Employer Determine Amount
Weekly 52 $69.23 $300 payment x 12 months/52 weeks=$69.23
Every two weeks 26 $138.46 $300 payment x 12 months/26 pay periods=$138.46
Twice each month 24 $150.00 $300 payment/2 pay periods=$150
Monthly 12 $300.00 $300 payment/1=$300

If the Trustee is unable to garnish your wages because you are self-employed, unemployed or changed jobs without providing information to our office, the Trustee will file a motion with the court to dismiss or modify your case. You will be required to appear at a hearing, usually held in our office, to explain to the Trustee why you failed to make your Chapter 13 bankruptcy plan payments. The Chapter 13 bankruptcy Trustee will have the right to:

Dismiss your case

Increase your Chapter 13 payments to “make-up” what you have fallen behind and any claims greater than what was originally in your bankruptcy

Again, the approach will depend on your specific situation.

It is your responsibility to make your Chapter 13 payments to the Trustee. We strongly recommend you obtain a file folder specifically for Chapter 13 Trustee payment receipts. If there is ever a discrepancy between your records and the Trustee’s, you must be able to quickly and easily provide your receipts. You are required to prove that you made the payments.

Why would the Trustee increase my payments after I’ve been in bankruptcy for a year or more?

Your payments are usually increased when you have failed to make payments to the Trustee, the mortgage company increases your house payments due to a change in your interest rate or escrow and/or you have additional claims filed in your bankruptcy. Additional claims may be for taxes you have failed to pay to the city, county, state or Internal Revenue Service after filing your bankruptcy.

In addition, the Trustee will pay attorney fees for items outlined in the Disclosure to Debtor(s) of Attorneys Fee and approved by the Court. This schedule was part of the bankruptcy contract and also included in your bankruptcy filed with the Court.

How can I find out what the Trustee is paying each month or how much I owe on my bankruptcy?

If you want to see what the Trustee is paying each month or obtain an estimate of what is owed in your bankruptcy, you should register with the National Data Center’s website. You will be able to obtain a login and password that will allow you to access your account. Should you need an “official” payoff, you must obtain that through our office. Do not contact the Trustee’s office; they will simply redirect you to our office. It may take 10 days to receive an official, unaudited payoff. An official, unaudited payoff is usually needed only when you are trying to pay off your bankruptcy or you are looking to refinance your home and payoff the bankruptcy.

If I have someone who wants to pay off my bankruptcy, what should I do?

You should not make large payments to the Trustee without first contacting our office. If you have a family or friend that wants to pay off your bankruptcy, we will need to get an official, unaudited payoff. In addition, the person paying off your bankruptcy will need to send an affidavit with the funds. We can provide the affidavit to you.

Should I contact the Trustee’s office if I have a question or need to inform someone of a change in my circumstances?

You should almost never contact the Trustee’s office directly or send letters to the Trustee without first speaking with our office. In almost every case, the Trustee will redirect the communication to our office. We are here to help you navigate the bankruptcy process. In most cases we can answer your questions and if there is a change in circumstances, we will probably be required to file amended schedules with the Court.

Chapter 13 Payments – Greensboro & Winston-Salem Office Clients

Where do I send my Chapter 13 payments?

We have estimated your Chapter 13 plan payments and you were given that amount at your signing appointment. Your first payment is to be paid by certified check or money order to Anita Jo Troxler, Kathryn L. Bringle, or Richard M. Hutson II and mailed within 10 calendar days of the date you signed your bankruptcy petition in my office.

If your Trustee is Ms. Troxler (Greensboro Division), her address for all payments is as follows, and you should confirm this address at the Greensboro Chapter 13 Trustee’s website address for debtor payments:

Chapter 13 Office
PO Box 1720
Greensboro, NC 27402-1720

 

If your Trustee is Ms. Bringle (Winston-Salem Division), her address for all payments is as follows, and you should confirm this address at the Winston-Salem Chapter 13 Trustee’s website address for debtor payments:

Chapter 13 Office
PO Box 2115
Winston-Salem, NC 27102-2115

 

If your Trustee is Mr. Hutson (Durham Division), his address for all payments is as follows, and you should confirm this address at the Durham Chapter 13 Trustee’s website address for debtor payments:

Chapter 13 Office
PO Box 3613
Durham, NC 27702-3613

Where do I send payments in the future?

Unless otherwise directed by the Trustee, all future payments will be made to Ms.Troxler, Ms. Bringle or Mr. Hutson and mailed to the address listed above. Remember, all payments must be made by certified check or money order. On the certified checks or money orders be sure to have your name and case number somewhere on the certified check or money order. No cash, personal checks or electronic checks will be accepted by the Trustee. In almost all cases, the Trustee will mail labels along with other instructions to you prior to your meeting of creditors.

Can my Chapter 13 payments change?

The Trustee may change your payments at the creditors meeting or at any time in the future if your creditors file a claim stating that you owe more than what was included in your original bankruptcy filing, you incur additional legal fees or there is a change in your monthly mortgage payments. For example, if you thought you were behind $5,000 on your house payments but the mortgage company indicates it is $8,000, your Chapter 13 payments will need to increase to pay the mortgage company back in full. Read more and watch our video about your Chapter 13 payments changing.

Where do I get additional mailing labels?

If you need additional mailing labels for the Trustee, simply include a note with your payment requesting additional labels or send a request to the Trustee’s correspondence address which is accessible on their website. You may choose either Ms. Troxler, Ms. Bringle or Mr. Hutson depending on your assigned trustee.

When are my Chapter 13 bankruptcy payments due to the Trustee?

Your payments are technically due to the Trustee on the 1st day of each month but no later than the 15th day of each month. You should give adequate time for the post office to deliver your payment. Should you send the payment via overnight mail, you must use the United States Postal Service. It is the only service that will deliver overnight to a Post Office box.

What if I miss a payment to the Trustee?

If you miss a payment to the Trustee, he or shehas the legal right to garnish your wages, dismiss or modify your plan payments.

If he garnishes your wages, he will send a court order to you and your employer instructing your employer to deduct your Chapter 13 payment from your wages. It is your responsibility to ensure your employer is taking the correct amount of money from your check. Your employer will usually spread the wage garnishment equally over each pay period of the month. Of course, this depends on how your employer has their payroll setup.

Example if Chapter 13 Bankruptcy Payment is $300/month:

Payroll Frequency Number of Pay Periods Per Year Amount Deducted from Each Check How Did Employer Determine Amount
Weekly 52 $69.23 $300 payment x 12 months/52 weeks=$69.23
Every two weeks 26 $138.46 $300 payment x 12 months/26 pay periods=$138.46
Twice each month 24 $150.00 $300 payment/2 pay periods=$150
Monthly 12 $300.00 $300 payment/1=$300

If the Trustee is unable to garnish your wages because you are self-employed, unemployed or changed jobs without providing information to our office, the Trustee will file a motion with the court to dismiss or modify your case. You will be required to appear at a hearing, usually held in our office, to explain to the Trustee why you failed to make your Chapter 13 bankruptcy plan payments. The Chapter 13 bankruptcy Trustee will have the right to:

  • Dismiss your case
  • Increase your Chapter 13 payments to “make-up” what you have fallen behind and any claims greater than what was originally in your bankruptcy

Again, the approach will depend on your specific situation.

It is your responsibility to make your Chapter 13 payments to the Trustee. We strongly recommend you obtain a file folder specifically for Chapter 13 Trustee payment receipts. If there is ever a discrepancy between your records and the Trustee’s, you must be able to quickly and easily provide your receipts. You are required to prove that you made the payments.

Why would the Trustee increase my payments after I’ve been in bankruptcy for a year or more?

Your payments are usually increased when you have failed to make payments to the Trustee, the mortgage company increases your house payments due to a change in your interest rate or escrow and/or you have additional claims filed in your bankruptcy. Additional claims may be for taxes you have failed to pay to the city, county, state or Internal Revenue Service after filing your bankruptcy.

In addition, the Trustee will pay attorney fees for items outlined in the Disclosure to Debtor(s) of Attorneys Fee and approved by the Court. This schedule was part of the bankruptcy contract and also included in your bankruptcy filed with the Court.

How can I find out what the Trustee is paying each month or how much I owe on my bankruptcy?

If you want to see what the Trustee is paying each month or obtain an estimate of what is owed in your bankruptcy, you should register with the National Data Center’s website. You will be able to obtain a login and password that will allow you to access your account. Should you need an “official” payoff, you must obtain that through our office. Do not contact the Trustee’s office; they will simply redirect you to our office. It may take 10 days to receive an official, unaudited payoff. An official, unaudited payoff is usually needed only when you are trying to pay off your bankruptcy or you are looking to refinance your home and payoff the bankruptcy.

If I have someone who wants to pay off my bankruptcy, what should I do?

You should not make large payments to the Trustee without first contacting our office. If you have a family or friend that wants to pay off your bankruptcy, we will need to get an official, unaudited payoff. In addition, the person paying off your bankruptcy will need to send an affidavit with the funds. We can provide the affidavit to you.

Should I contact the Trustee’s office if I have a question or need to inform someone of a change in my circumstances?

You should almost never contact the Trustee’s office directly or send letters to the Trustee without first speaking with our office. In almost every case, the Trustee will redirect the communication to our office. We are here to help you navigate the bankruptcy process. In most cases we can answer your questions and if there is a change in circumstances, we will probably be required to file amended schedules with the Court.

Mortgage and Homeowner Association Dues

What should I know about my mortgage and homeowner association dues?

First, you must determine if you filed your Chapter 13 bankruptcy before July 1, 2009 or on or after July 1, 2009.

If you filed bankruptcy before July 1, 2009, your Chapter 13 payment does not include your monthly mortgage payment(s) on your house. You must make your mortgage payments (1st, 2nd, etc), directly to your mortgage company. If you have homeowner association dues (HOA), you must also make all future payments to them. Only the amount you were behind on the date you filed your bankruptcy is included in your bankruptcy.

If you filed your bankruptcy on or after July 1, 2009, your Chapter 13 plan payment includes your monthly mortgage payment(s) on your house in most cases. The Chapter 13 Trustee will receive your payment and disperse the money to your creditors including the mortgage company each month. As a result, you will no longer make your mortgage payments to your mortgage company unless you have a home equity line of credit or HELOC. If you have homeowner association dues (HOA), you must make all future payments to them. Only the amount you were behind on HOA dues on the date you filed your bankruptcy is included in your bankruptcy.

How much is my monthly mortgage payment after filing bankruptcy?

The mortgage company will file paperwork with the Chapter 13 Trustee confirming the amount of your monthly mortgage payment that will be due and payable by the Chapter 13 Trustee after filing bankruptcy. The payment should revert to your regular monthly payment, but there are many factors that may impact that amount. The mortgage company must file with the court, and provide you a copy, any changes in your monthly mortgage payment at least thirty (30) days prior to the effective date of any change.

If you have an adjustable rate mortgage, a change in the interest rate may impact your future mortgage payment.

If you had a forbearance agreement or other modification to your loan prior to filing bankruptcy, your payment should revert to the payment amount in the last written agreement between you and your mortgage company.

If your house was in foreclosure before filing bankruptcy, the mortgage company may have paid outstanding property taxes on your home. As a result, they will likely escrow taxes, as outlined in your loan agreement, into your monthly payment which may increase your mortgage payments that will be paid by the Chapter 13 Trustee.

If your homeowners insurance lapsed or if it was cancelled, the mortgage company has probably escrowed insurance into your payment. If the mortgage company has added “forced-placed” insurance, they will increase your monthly payments to compensate for their expense.

Do I need to do anything if the mortgage company has obtained insurance (forced-placed) on my behalf?

If the mortgage company has added “forced-placed” insurance on your property, you should obtain your own homeowners insurance immediately. On average, forced-placed insurance is three to four times more expensive than the insurance you can obtain from your insurance agent. Once you obtain your own coverage, you will need to send a copy of the insurance declaration page to your mortgage company, so they can reduce your payments.

If the mortgage company is not escrowing taxes and insurance, do I need to continue to pay for taxes and insurance?

Absolutely, if not escrowed by your mortgage company, you are responsible for making payments for taxes and insurance after your bankruptcy is filed.

What happens to my home if I get behind on my Chapter 13 plan payments after filing bankruptcy?

If you filed bankruptcy on or after July 1, 2009 and miss a payment to the Chapter 13 Trustee, you should expect the Trustee to file a Motion to Dismiss or Modify your Chapter 13 plan payment. Since your mortgage is included in your plan payment to the Chapter 13 Trustee, you are at risk of losing your home and other assets protected in the Chapter 13 bankruptcy if you get behind on the plan payments. As a result, it is extremely important to stay current on you plan payments to the Chapter 13 Trustee.

What happens if my mortgage company refuses my payments after filing bankruptcy?

If you filed bankruptcy prior to July 1, 2009 and the mortgage company refuses your payments after you file bankruptcy, try resending your payment and contact our office immediately. If you fail to make your payments, they may try to foreclose on your home.

What if I do not receive a bill or statement from my mortgage company?

It is possible that the mortgage company will stop sending you a bill or statement while you are in bankruptcy. You may contact them and specifically request that they send it to you. According to Local Rule 4001-1(e)1 of the Western District of North Carolina, they are required to provide you this information. They may require both of us to sign a release allowing them to send you the bill or statement. However, if you filed before July 1, 2009 you MUST make your mortgage payment(s) each month if you want to keep your home. If you do not receive a bill or statement, simply add your account number on your payment and send it to the mortgage company by the due date. Indicating you did not receive a bill or statement is not a valid excuse for not making your payments.

What if I get behind on my mortgage payments while in bankruptcy?

If you filed prior to July 1, 2009 and you get behind on your payments while you are in bankruptcy, even one month, the mortgage company may file a Motion for Relief from Automatic Stay. This is a legal document asking the bankruptcy court for permission to start foreclosure on your home. If you are behind on your payments, we may be able to negotiate a repayment plan that would allow you to “catch-up”. This repayment plan will be in addition to your regular monthly house payment. However, there is no guarantee the mortgage company will agree to this repayment plan. In addition, you will incur additional legal fees. The mortgage company will charge you for their attorney’s time to file the Motion for Relief from Automatic Stay and the bankruptcy court will award fees for our office to respond to and negotiate with the mortgage company attorneys. These fees are usually added to your Chapter 13 plan and may cause the payments to the Trustee to increase.

What if I get behind on my homeowners association dues while in bankruptcy?

If you get behind on your payments while you are in bankruptcy, the homeowners association may file a Motion for Relief from Automatic Stay. This is a legal document asking the bankruptcy court for permission to start foreclosure on your home. If you are behind on your payments, we may be able to negotiate a repayment plan that would allow you to “catch-up”. This repayment plan will be in addition to your regular homeowner association dues. However, there is no guarantee the homeowners association will agree to this repayment plan. In addition, you will incur additional legal fees. The homeowners association will charge you for their attorney’s time to file the Motion for Relief from Automatic Stay and the bankruptcy court will award fees for our office to respond to and negotiate with the homeowners association’s attorney. These fees are usually added to your Chapter 13 plan and may cause the payments to the Trustee to increase.

Do I need to keep my receipt when making my house payment or homeowner association payment?

We strongly recommend that you obtain two file folders specifically for mortgage company and homeowner association dues payment receipts, including cancelled checks, money orders, certified funds and Western Union receipts. If there is ever a discrepancy between your records and the mortgage company or HOA (if they file a Motion for Relief from Automatic Stay), it will be YOUR responsibility to prove that you have made ALL your mortgage or HOA payments since you filed bankruptcy. From the date the mortgage company or HOA files the Motion for Relief from Automatic Stay, you have seven (7) calendar days to provide copies to our office of all payments you have made to the mortgage company or HOA since you filed bankruptcy. We must provide a spreadsheet to the attorneys for the mortgage company by the tenth (10th) calendar day with the amount paid, money order/check/Western Union number, and the date you made the payment. If you do not or cannot provide this information, or if you provide it to our office after the 7th day, the mortgage company may get permission from the court to foreclose on your home. If you cannot provide proof (canceled checks or receipts), the courts will assume you failed to make your payment and you may lose your home.

What if my mortgage company refuses to talk to me?

If you filed prior to July 1, 2009 and your mortgage company refuses to talk to you, insisting that your bankruptcy attorney must contact them, let them know they are required to speak with you and provide you with information as outlined in Local Rule 4001-1(e) of the Western District of North Carolina Bankruptcy Court. This includes how payments were applied, escrow analysis, loan payoffs, general information about your loan, etc. However, if the mortgage company has filed a Motion for Relief from Automatic Stay, they may refuse your payments and refuse to speak with you until that motion has been resolved through the bankruptcy court. As a result, you will need to contact our office regarding how to proceed.

If you filed on or after July 1, 2009 and your mortgage company refuses to talk to you, let them know they are required to speak with you and provide you with information as outlined in Local Rule 4001-1(e) of the Western District of North Carolina Bankruptcy Court. If you want to talk to the mortgage company about a modification to your loan or refinancing of your mortgage, they may require a letter from the lawyer Terry Duncan’s office before discussing any changes in your loan.

What if I can no longer make payments on my house?

If you filed prior to July 1, 2009 and are unable to maintain payments on your house while in your Chapter 13 bankruptcy, please contact our office for options that might be available to you. Please keep in mind that if you lose your home while in Chapter 13 bankruptcy, it does not mean you are out of bankruptcy. You are still obligated to make payments to the Trustee or he may garnish your wages.

If you filed on or after July 1, 2009 and are unable to maintain payments on your Chapter 13 bankruptcy including the payments on the house, please contact our office to discuss options available to you.

What should I do if I want to refinance my house while in bankruptcy?

If you want to refinance your house, you may be able to obtain financing if you have made 12 consistent, timely payments to the mortgage company(ies) and/or the Trustee. The decision about whether you are eligible to refinance is up to the mortgage company. However, the court must approve any refinancing. Once you find a mortgage company that will refinance your house, you should contact our office and ask to speak to the appropriate staff person. You will be required to provide financing documents from the new mortgage company and payoff of loan(s) from your existing mortgage company. If you want to pay off your bankruptcy from the refinancing of your house, our office is required to obtain the payoff from the Trustee’s office. From the date we file the motion with the court asking for permission to refinance your house, it will take approximately 30 days to obtain permission. The Court will approve an attorney fee for this work that will usually be included in your bankruptcy payoff.

What if I want to sell my house while in bankruptcy?

If you want to sell your house while you are in bankruptcy, you may place your house on the market with a real estate agent or on your own without obtaining court permission. If you use a real estate agent, you will need to let her know you are in bankruptcy. However, the court must approve the sale of your house in advance. You cannot close on the house without court approval. Once you find a buyer for your house, you should contact our office and ask to speak to the appropriate staff person. You will be required to provide a copy of the sales contract on your house and the payoff from the mortgage companies. You must receive enough money to pay all mortgages or have written agreement from the mortgage company that is accepting the “short-sale”. Any excess proceeds from the sale of your house will be paid to the Trustee for payment on your bankruptcy. If you need funds to move, we must include that request in the motion filed with the court. From the date we file the motion with the court asking for permission to sell your house, it will take approximately 30 days to obtain permission. The court will approve an attorney fee for this work to be paid through the Chapter 13 bankruptcy.

Taxes and Child Support / Alimony

If my wages are being garnished by the Internal Revenue Service (IRS) or state, when will it stop?

We will send notices to these entities within five days after the filing of your bankruptcy. However, it may take these agencies 30 days to stop the garnishment. If it has not stopped within 30 days, please contact our office and speak to the appropriate person.

Will there be problems with my bankruptcy if I just filed my taxes?

All taxes with the IRS and the state should have been filed with the appropriate agencies prior to signing your bankruptcy petition in our office. That means they must have been mailed to the appropriate IRS or state tax office, not just given to your tax preparer.

If you mailed your taxes shortly before filing bankruptcy or after you signed your bankruptcy petition in our office, you should send a copy of the tax returns to the following addresses. Be sure to sign and date the returns and send them so you have proof of delivery, e.g. return receipt requested or certified mail.

Federal taxes:
Internal Revenue Service
320 Federal Place, Room 335
Greensboro, NC 27401
State taxes (if you live in North Carolina):
North Carolina Department of Revenue
PO Box 1168
Raleigh, NC 27602

If you filed your tax returns within weeks or days of your bankruptcy filing, the IRS or state may not be able to process your return prior to your creditors meeting. As a result, they may file a claim in your bankruptcy stating you have not filed your tax returns and/or you owe an outrageous amount on taxes. Either way, it may put your bankruptcy in jeopardy.

Do I need to file income taxes while in bankruptcy?

After filing bankruptcy, you must file all subsequent taxes with the IRS and state by the April 15 deadline. Obtaining an extension is not an option. If you do not file your taxes timely, the IRS or state may request that your bankruptcy be dismissed.

What happens if I receive a tax refund while in bankruptcy?

It will depend on the amount of the refund and whether you have any tax liability to the IRS or state. If you owe taxes to the IRS or state, they will most likely keep your refund and reduce the amount you owe to their entity in your bankruptcy.

If you do not have a tax liability, you may be eligible to receive the tax refund while in your bankruptcy. If the refund is for a small amount, the Trustee will probably not require you to submit the funds to him. However, if you receive a large refund, usually over $1,000, the Trustee may require you to pay the funds to him. The courts have determined that instead of receiving a large refund at the end of the year, you could have received a larger payroll check each month. This would have increased your disposable earnings and that would have allowed you to pay more to your creditors. As a result, you should minimize your tax refund. Do not forget, the Trustee has a right to review your tax returns each year.

If I included child support arrearages (back payments owed) in my bankruptcy, when will the garnishment from my wages be stopped or reduced?

Domestic support obligations, child support and/or alimony, are unique in bankruptcy. The bankruptcy does not place a stay on the collection of child support as described by 11 U.S.C. Section 362(b). However, the agencies cannot have it both ways. They must agree to have the arrearages paid through your bankruptcy or deducted from your payroll. If you are paying on-going child support, they will continue to be paid outside of the Chapter 13 bankruptcy payments and will be garnished from your wages.

What if I get behind on domestic support obligations (child support or alimony) after filing bankruptcy?

You must stay current on domestic support obligations after you file bankruptcy. At your creditors meeting, you are required to sign a Certification and Affidavit regarding domestic support obligations. Should you get behind on these payments after filing bankruptcy, your case may be dismissed. To obtain a discharge in your Chapter 13 bankruptcy, you must sign an affidavit that you are current on domestic support obligations.

Automobiles

What if I need to purchase another car or truck while in bankruptcy?

You should contact our office and speak with the appropriate staff person. We will provide you with the paperwork necessary to start the process. If the loan will be for $15,000 or less, the Chapter 13 Trustee has the authority to approve the loan. Fill out the Request for Credit Authorization. The Request must be submitted along with an amended budget for approval by our office. Our office can provide you with a copy of your current budget if needed.

Once we have approved the Request, it is submitted to the Trustee for approval. It may take up to 10 days to obtain approval from the Trustee. Our office will contact you once the Trustee has approved your request.

To obtain approval, you must demonstrate you are able to make payments on the new vehicle in addition to other bills, including house payments and Chapter 13 bankruptcy payments. You should also be current on your payments to the Chapter 13 Trustee.

If you are replacing a car or truck that is being paid for in your bankruptcy, we will need to file a motion to modify your Chapter 13 plan payments and surrender the vehicle. It may take up to 30 days to obtain the Court’s approval to lower your payments.

If you want to purchase a vehicle with a loan greater than $15,000, we must file a motion with the court for you to incur this level of debt. You will definitely want to speak with our office before pursuing a vehicle with this cost.

In any scenario, there will be attorney fees which will be added to your Chapter 13 plan.

What if my car or truck is destroyed or totaled in an accident?

If your car was totaled in an accident, you will need to contact your insurance company or the insurance company of the person that caused the accident and let them know you are in bankruptcy. You should also contact our office, since you will need to obtain permission from the Court to settle the claim with the insurance company.

Employment and Other Income Changes

What should I do if my employer changes while in bankruptcy?

If you change employers while you are in bankruptcy, please contact our office and ask to speak to the appropriate staff person. You are required to keep your employer and income information current while you are in bankruptcy. This information must be filed with the bankruptcy court.

What happens if I become unemployed while in bankruptcy?

You should contact our office if this occurs. We will need to discuss how long you expect to be unemployed and whether you are receiving unemployment. These will all be factors in considering your options.

What happens if I am sick for an extended period of time, in an accident, or on disability or workers compensation while I am in bankruptcy?

Please contact our office and ask to speak to the appropriate person. These are very special situations and there is no general answer. Depending on your specific situation, including how your bankruptcy is structured and how long you will be off work, will depend on the action to be taken.

I’ve heard I may be eligible for a moratorium on my payments, how does that work?

If you or your spouse are expected to be out of work for a short period of time, we may be able to request a moratorium on your Chapter 13 bankruptcy payments for two to four months. Recognize the moratorium only applies to your Chapter 13 Trustee payment and not the payment on the mortgage. Also, the moratorium only delays those months’ payments. From the date we file the motion for moratorium with the court, it will take approximately 30 days to obtain permission. You should contact our office if you believe this may apply to you.

What if I have a claim, including workers compensation or personal injury that is settled while I am in bankruptcy?

You should contact our office to determinate the appropriate action necessary for your situation. Regardless, our office will need to file a motion to approve the settlement before proceeds are disbursed to you.

What happens if I withdraw money from my 401(k) or pension plan while in bankruptcy?

Once you withdraw money from your 401(k) or pension plan, the money becomes income similar to a bonus. The Trustee may be entitled to take that money to pay your creditors.