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Brian D. Lynch, Chapter 13 Trustee |
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Correspondence Address: Office Hours: Payment Address: |
Frequently Asked Questions The 13 most commonly asked questions in Chapter 13 1) I understand I must make a payment each month to the Trustee. How do I do that? 7) What happens if I miss payments to the Trustee because of an emergency? 8) May I incur credit during my Chapter 13? What if my car breaks down and I need a new one...? 10) How can I find out how my plan is progressing? 12) May I make larger payments to the Trustee and complete my case early?
You must make your payments to the Trustee in the amounts as described in Paragraph 1 of your plan. In most cases the court will order your employer to forward your required payments directly from your paycheck to the Trustee’s bank which is located in Memphis, Tennessee. Sometimes it takes a few weeks for that paycheck deduction to take effect, SO…….
REMEMBER, until those deductions are being made by your employer, YOU have the obligation to make sure that payments are made directly to the bank. We have included in the back of this book a number of address stickers for you to use to insure any payments you must make yourself reach the bank correctly.
Be sure to watch your pay-stub. If there is a delay in getting the pay roll deduction started or if your employer for whatever reason does not deduct a payment, you need to make it directly to the Trustee until the paycheck deduction takes effect or is corrected. The amount of your payment may change, so be sure to check your individual plan so that you are prepared for any payment changes.
If you have to make any plan payments directly to the Trustee’s bank, please note the following:
THE TRUSTEE'S BANK WILL NOT ACCEPT PERSONAL CHECKS.
DO NOT MAIL CASH!!
If you have to pay directly, the Trustee’ bank can only accept Money Orders or Cashiers Checks, which must include:
(1) your NAME
(2) your ADDRESS and
(3) your CHAPTER 13 CASE NUMBER (on the front of this book).
Please make all direct payments payable to:
Brian Lynch, Trustee
And mail them to:
Brian Lynch, Trustee
P.O. Box 420
Memphis, Tennessee 38101-0420
Remember: The Trustee will not send you or your employer a monthly reminder. It is up to you to make sure your payments are getting to the Trustee on time.
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All Chapter 13 cases have a Trustee.
He is responsible for the overall administration
of your case. In all cases in Northern Oregon,
the Trustee is Brian Lynch. He has approximately
5,000 active files in addition to yours.
The Trustee's duties are found in the
Bankruptcy Code. They include, at a minimum,
reviewing your bankruptcy petition to ensure that it is complete and accurate; determining your ability to make payments and whether your Chapter 13 plan will be successful as proposed; conducting the first meeting of creditors and appearing at other hearings in your case; monitoring the progress of your case; collecting your payments and paying creditors according to the plan; recovering improper payments made before your filing; providing information about your case to those who are authorized and have a need to know; and most importantly, assisting you in the performance of your plan.
The Trustee’s address is:
1300 SW Fifth Ave., Suite 1700
Portland, Oregon 97201
The Trustee’s phone and fax numbers are: (503) 972-6300 PHONE
(503) 972-6313 FAX
If, for any reason, you change your address while you are in Chapter 13, you MUST notify BOTH the Trustee’s office and the Bankruptcy Court.
REMEMBER: the Trustee cannot give you any legal advice. If you need
legal advice, you need to contact your attorney.
The Trustee’s Office Hours Are – 9am to 12 noon - 1pm to 4pm (closed for lunch)
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The Judge’s Order approving your Chapter 13 plan says that you must submit signed and dated COPIES of BOTH your STATE and FEDERAL TAX RETURN FORMS to the Trustee every year during your plan whether you get a refund or not. Send your tax returns and any other documents other than your plan payments to:
Brian Lynch, Trustee
1300 SW Fifth, Suite 1700
Portland, OR 97201
DO NOT SEND ORIGINALS!
Please send these copies to the Trustee immediately after you file the returns. The Trustee will check the returns to see if your gross income has increased and/or if you are entitled to receive a tax refund.
REMEMBER: You will not successfully finish your plan unless you complete this requirement!
Your Chapter 13 plan requires you to pay your net tax refunds each year to the Trustee (usually for the first 3 years). If you have a tax refund, the entire refund must be sent to the Trustee unless, in that same year, you also owe taxes to a different income taxing authority. For example, if you receive a $500 Federal tax refund and that same year you owe the State $300, you would only need to send the Trustee the net of $200. (just endorse the checks over to Brian Lynch or send a money order or cashier’s check for the net amount and a note showing the math and send it to the Trustee’s bank just like you would send a plan payment)
You cannot avoid paying your refund to the Trustee by applying your refund to next year’s tax obligation, agreeing that your refund can be kept by the IRS for some reason or used as a donation.
REMEMBER: You will not successfully finish your plan unless you complete this requirement!
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The Judge’s Order approving your plan says that you are required to report to the Trustee if and when your gross income increases more than 10% from the amount originally reported on your Schedule I that was filed with your bankruptcy papers. If that happens, you should contact your attorney to review all of your income and expenses and file amended schedules to reflect the changes.
You are also required to inform the Trustee if and when you get married during the time you are in Chapter 13.
The Judge’s Order approving your plan also says that if you or your spouse take a retirement fund distribution or have the right to receive any money exceeding $2500 during your plan, you must inform the Trustee’s office. It also says that you must keep any of that money until you either get permission from the Trustee to spend it, or notify all your creditors that you propose to spend it.
Taking a retirement distribution during the plan could turn your otherwise exempt property into disposable income. If that happens, the amount of the retirement distribution may have to be paid to your creditors before you get your discharge. BE SURE TO TALK TO YOUR ATTORNEY BEFORE YOU ACT.
REMEMBER: Everyone in Chapter 13 must pay their ongoing tax obligations during the life of the plan. This obligation includes any taxes owed as a result of any increase in income.
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Unfortunately, you are required by law to list all of your liabilities (debts)
and assets (your possessions) in your bankruptcy papers. The petition you signed, under oath, says that you have done so. Nobody can pick and choose who gets listed. If you forgot to list someone to whom you owe money, that debt will probably not be eliminated by your bankruptcy. If you forgot to list some of your property it could cause big problems for you if you don’t change your bankruptcy papers. You can add creditors or property you forgot by amending your schedules. This requires a small fee to the bankruptcy court. If you forgot a creditor or some property, be sure to inform your attorney at once.
REMEMBER: The Bankruptcy Code prohibits you from favoring one creditor over another. This means you cannot pay a creditor "on the side" unless it is specifically allowed under your plan. In some cases, your plan may instruct you to pay secured creditors directly (car loans and mortgage payments are good examples). However, under no circumstances should you be paying any creditor unless your plan says you can. If you have any questions about this, talk to your attorney before you make any of those kinds of payments.
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The filing of your bankruptcy papers should
automatically stop any collection efforts once the
creditor is notified.
Most creditors know this and will stop
collection efforts immediately. It usually
takes about 30 days for a creditor to get
officially notified.
Occasionally, some creditors do not get the word
or may still try to muscle their way in for more
money than they are allowed to receive.
If you are contacted, first check to be sure
that creditor has been listed on your
bankruptcy papers. If they weren't listed,
see question #5 above. If they were listed, go on...
REMEMBER: You do not have to discuss the matter with a creditor who contacts you. It is best to simply tell them you are in Chapter 13, give them your case number and attorney's name. Then politely tell them not to call you again. If they persist, tell them they are in violation of a court order and you want them to stop. Be sure to keep a record of all calls and forward it to your attorney for action.
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You must not miss any payments to the Trustee unless it is permitted by the bankruptcy judge. When you file your Chapter 13, your creditors are prohibited from taking any action against you. In exchange for that protection, you must complete your obligations under the plan. One of those obligations is making your payments to the Trustee on time. If you wish your Chapter 13 to be successful, you cannot have your employer stop making the payroll deductions. If you miss payments, the Trustee cannot pay your creditors as called for by your plan and the Trustee is obligated to file papers with the Bankruptcy Court asking that your case be dismissed. If your case is dismissed, your creditors will be notified and may resume collection against you.
If you have a change in your circumstances such as an unforeseen emergency, you should notify your attorney at once. Your attorney can re-evaluate your financial situation and, if appropriate, change your plan to reflect the different circumstances. This process can take several weeks, so be sure to contact your attorney immediately if you foresee any problem making your payments.
REMEMBER: The Trustee does not have the power to excuse any payments. Any change in payments must be approved by your Bankruptcy Judge.
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Your Confirmation Order, signed by the Bankruptcy Judge approving your plan, states that you may not incur any credit obligations during the life of your plan without the Trustee's written consent. The only time you can act without the Trustee's written consent would be:
(1) an emergency, or
(2) ordinary expenses for a business approved in your plan.
Any request for credit must be approved by the Trustee in writing before you obligate yourself in any way. The most common credit obligation you may wish to incur is for the purchase of a car. Be sure to contact your attorney if you must buy a car or trade in your old one. Do not let a car dealer talk you into anything before your attorney has had a chance to get involved. The Trustee regularly approves requests to finance new vehicles, so long as you and your attorney follow the proper procedure. That procedure requires that you supply the Trustee with some basic information on a form provided by his office and that you get Trustee approval before you commit to any obligation.
REMEMBER: Taking on any new credit obligations could jeopardize your plan and failure to get permission could result in your case being dismissed. AND, not paying your tax obligations as they become due is considered taking on new credit. Be sure to pay whatever tax obligations you have during your plan.
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Your Confirmation Order requires
you to inform the Trustee and your creditors
of the sale, lease, encumbrance, disposal or
purchase of any real property or any personal
property with a value over $10,000. Informing
the Trustee and creditors can be tricky and may have
unexpected consequences if not done properly. It is very important you learn
and understand all the possibilities before you take any steps involving the sale or acquisition of any property. You should contact your attorney well before you list or advertise your property or purchase property and discuss what you want to do. The Trustee will require specific information before any permission to buy or sell is given and selling or purchasing property sometimes requires a court order that usually takes about 30 days to obtain. Find out what is required BEFORE you commit to any purchase or sale.
REMEMBER: Selling, buying or improving property is tricky when you are in Chapter 13. Talk to your attorney first!
REMEMBER: You cannot incur any credit obligations while in Chapter 13 without first obtaining the Trustee’s written consent. Visit our Escrow page for more information.
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In January every year, the Trustee will send you a complete record of all receipts and disbursements. It will tell you exactly how much money the Trustee has received from you and how much and to whom payments have been made.
You may also request a progress report if you need one. This request must be in writing and sent to the Trustee's office at the address shown in the answer to question #2. It will take approximately a week to 10 days to respond. The progress report will give you a summary of your case to date. If you want to know how much it would take to pay off your case, you should send a request for that information to the Trustee’s office in writing.
REMEMBER: You cannot pay off your case before you have been making plan payments for at least 36 months and have completed all the requirements of paragraph 1 of your plan, UNLESS you pay all your creditors 100%.
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You or your employer should continue making payments until the Trustee (or your attorney) specifically tells you to stop. The Trustee will inform your employer when the payroll deductions are no longer necessary and should stop.
Depending on whether your income places you below or above Oregon's median income level, you may be required to make payments to the Trustee for at least 36 months and perhaps as long as 60 months. It can be difficult to predict the exact outcome of your case when it is filed. You should ask your attorney whether you are below or above the median. That answer will tell you whether you must continue payments for a minimum of 36 months or whether you must continue for the full 60 months.
Don't worry about overpaying. Once your case has undergone final audit, the Trustee will refund any overpayment you might have made. It is better to overpay a little than to underpay and risk having your case dismissed when it is nearing completion.
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The Bankruptcy Code requires you to send all your disposable income to the Trustee for at least 3 years and in some cases for up to 5 years. Your disposable income is the amount left over after you subtract your reasonable and necessary living expenses from your net income. This amount is shown as your payments set out in paragraph 1 of your plan. Sometimes it will take more than 3 years to complete your plan. There is, however, one exception to this 3-year rule. You may pay off your plan before 3 years if you pay all creditors who have filed claims 100%. If you can't pay the full 100%, you must make your plan payments for at least 3 years before you are eligible for discharge. (See question # 13) You can ask to pay off your plan after 3 years only if you can pay 100% of what is due to the creditors who must be paid during the life of the plan. These include secured creditors; priority tax claims and sometimes back child support.
Paying off your plan early can be complicated and you should check with your attorney before you contact the Trustee.
Making larger payments to the Trustee is required if your income increases (see answer to question # 4). When the Trustee receives unexpected extra payments, he will wonder where you got the extra money. So, if you want to make larger payments because you got a big raise amounting to more than 10% of what you originally reported as your income, you should inform the Trustee of that fact in writing when you begin sending in more money. You will, however, still be required to make payments to the Trustee for 3 years unless you can pay all your creditors 100%. (See above).
REMEMBER: Do not borrow money or incur credit to make bigger payments to the Trustee hoping that you can complete your plan before 3 years. You filed a Chapter 13 plan to eliminate your debts and get a "fresh start". Your best bet is to make your scheduled payments on time using your disposable income.
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A discharge is your biggest goal. The discharge order is a document prepared by the Bankruptcy Court and signed by your judge. It means you have completed the requirements under your plan. Most, if not all, of the creditors you listed may never again contact you about those debts. If you have some nondischargeable debts, such as child support or student loans that have not been paid in full during your plan, those creditors may contact you again about payments of those debts.
The Trustee must audit and review your case before the Bankruptcy Court will issue the discharge. This normally takes about 60 days. During that period the Trustee double checks your payments and reviews your case to ensure that you have done everything required from his standpoint. Then the Trustee notifies your Bankruptcy Judge and the Court will then issue your discharge in approximately 30 days.
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