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Frequently Asked Questions

What is going to happen now that I filed a Chapter 13 Bankruptcy?

If you have just filed a Chapter 13 Bankruptcy, you probably have a lot of questions! The following series of "Questions and Answers" is provided to you only for purposes of introduction and to give you some idea of what to expect. The Bankruptcy Code will determine what actually happens in your case. You need to discuss with your attorney your individual concerns, legal rights, and specific questions about your particular situation and how the Bankruptcy Code will affect your case. The Chapter 13 Trustee and her staff will administer your plan. However, we will not give you any legal advice!

What is a Chapter 13 Bankruptcy and how does it work?

Chapter 13 is one form of bankruptcy in which you obtain relief from your creditors and submit a plan to pay your debts over a period of not less than 36 months (unless you are paying everyone back 100%) and not more than 60 months. The law prohibits your creditors from trying to collect from you during the time you are in your Chapter 13 plan. You must make a regular payment to the Chapter 13 Trustee within 30 days after filing your plan and payments must be for the period of time designated in your plan. Payments can be in the form of a Cashiers Check, Money Order or submitted online via E-Pay.

If you have agreed that your plan payments are to be deducted from your paycheck, you are responsible for making sure those payments are received by our office. Until you see that your employer is withholding your payments from your check, you are responsible for making your plan payments in the meantime. If you have not previously agreed to payroll deductions, the court may at any time after confirmation order your employer to deduct your payments directly from your paycheck. If the Trustee does not receive your payments, you will risk having your case dismissed by the Court. Dismissal of your case results in your creditors having the right to proceed with collection methods.

The money collected by the Chapter 13 Trustee is disbursed according to the plan after it is confirmed by the Court.

Where is a Chapter 13 case filed?

You file your Chapter 13 petition with the Clerk of the Bankruptcy Court in the (federal) District where you have lived, had your principal place of business, or had your principal assets located for the greater part of 180 days.

The Bankruptcy Court is a part of the system of federal courts and is a special court that was created by Congress just to hear cases and make decisions about disputes between debtors and creditors involved in a bankruptcy case.

Your Chapter 13 Bankruptcy case has been filed in the United States Bankruptcy Court for the Northern District of Illinois Eastern Division. All papers may only be filed with the Clerk of the Bankruptcy Court office, addressed as follows:

Clerk of Bankruptcy Court
219 S Dearborn Room 710
Chicago, IL 60604
(312) 435-5694

Who are the bankruptcy judges?

The United States Bankruptcy Court for the Northern District of Illinois Eastern Division currently has the following judges:

Chief Judge A. Benjamin GoldgarMarshall, Stearns
Judge Janet S. BaerStearns
Judge Timothy A. BarnesHooper
Judge Donald R. CasslingHooper
Judge David D. ClearyMarshall
Judge Jacqueline P. CoxHooper
Judge Thomas M. LynchMeyer
Judge Deborah L. ThorneMarshall, Stearns

What fees are charged in chapter 13?

The Clerk of the court charges a filing fee when the case is filed. The Chapter 13 Trustee receives a fee up to ten percent (10%) of the amount paid under the plan. Your Trustee is currently charging the fee listed on our home page. These fees are in addition to the fees charged by your lawyer.

How does the Trustee receive her fees?

Your Trustee is currently charging the fee percentage listed on our home page. Fees are taken at the time your payment is made to the Trustee. Your financial reports show you how much the Trustee has received to date.

Why is your chapter 13 case number important?

At the time your Chapter 13 petition was filed, the Bankruptcy Clerk assigned your case a number. Your case number is very important. You will need it whenever you call the Trustee's office, when you make a payment to the Trustee or when you obtain information from the Clerk's office.

Your address & employer

We need to know your exact mailing address for as long as you are under Chapter 13. We have the address which you put on your petition, and we send all notices and quarterly reports to that address until you or your attorney tell us to send them somewhere else. If you ever move or change your mailing address, you must INFORM your ATTORNEY, the CLERK, and the TRUSTEE in WRITING of your new address. We also need to know your current employer's name and address.

"My friend went through bankruptcy
And he says...."

You have probably already received or will receive advice on what to do from well meaning friends and relatives who have themselves experienced financial problems. Just like no two people are alike, no two 'Chapter 13 Bankruptcies' are alike. Take the advice of your well-meaning friends and acquaintances with the proverbial "grain of salt." If you have a specific question about anything related to your bankruptcy, make it your rule to ASK YOUR ATTORNEY, and he or she will try to provide you with an answer that applies to your special situation.

What should I expect my attorney to do in a Chapter 13 Bankruptcy?

Exactly what you may expect of your attorney will be governed by whatever agreement the two of you have made. Be sure that you and your attorney have discussed fully whether additional legal services during your plan will cost you more money or whether the initial fee will cover all legal services. Keep in mind that all legal fees must be reviewed and approved by the Bankruptcy Judge even if you agree to pay more.

Under the rules of the Bankruptcy Court, your attorney must continue to appear and represent you until the judge permits your attorney to withdraw from your case.

Your attorney's function is to aid and assist you in successfully completing your Chapter 13. Your attorney is there to answer any questions or concerns regarding the proposal and legal consequences of your case. Remember, your attorney is your legal advisor, not the Trustee. The Trustee and her staff will not give you legal advice regarding your case.

What may I expect from the Chapter 13 Trustee?

The Chapter 13 Trustee's office is open five (5) days a week, Monday through Thursday, from 8:30 A.M. to 5:00 P.M. and Friday from 8:30 A.M. to 4:00 P.M. We follow the federal holiday schedule. Our phone number is (312) 431-1300.

The Trustee's main function is to administer the funds we receive from you. At least two times a year after the confirmation of your plan, the Trustee will send you statements showing you the payments received and the disbursements made on your case. If you have a question about your plan's receipts and disbursements, you may wish to call the Trustee's office. Trained phone service representatives are available during office hours to answer your questions. During non-office hours, there is also recorded information available to you which you can reach by pressing 3 (for debtor) at the main menu.

Do not feel that you have to talk personally with the trustee; the staff is familiar with the policies and guidelines of Chapter 13 and is well qualified to discuss with you any problems you may have implementing your plan. The Trustee and her staff cannot and will not give you legal advice.

When will I have to appear in court in a Chapter 13 case?

In the United States Bankruptcy Court for the District of Northern Illinois, you will have to appear for a First Meeting of Creditors meeting. This meeting is conducted by the Chapter 13 Trustee's office. The bankruptcy judge will not be attending this meeting. This will be held about a month after your case is filed. Your testimony at the meeting should not be lengthy.

Confirmation hearings are handled by your attorney and the Chapter 13 Trustee. You should check with your attorney on whether your attendance at the confirmation hearing is necessary.

May I change to Chapter 7 if my Chapter 13 case is still open?

Yes. A Chapter 13 may be converted to a Chapter 7 at any time. You should contact your attorney if you are considering converting your case.

What effect does filing under Chapter 13 have on lawsuits and attachments previously filed against me?

The filing of a Chapter 13 case automatically stays (stops) most lawsuits, attachments, garnishments, and other actions by creditors against either you or your property. A few days after the case is filed, a notice is mailed by the Trustee to all of your creditors advising them of the automatic stay. The creditors may be notified sooner by either you or your attorney if necessary.

If creditors continue to harrass you, call your attorney and inform him or her immediately.

Will my creditors be able to take my wages or property while the Chapter 13 case is in effect?

No. The automatic stay described in the previous question remains in effect during the entire Chapter 13 case and your creditors will not be permitted to take or otherwise proceed against any of your property or assets, including your earnings. However, if secured creditors to whom you are in default are not being paid under the plan, they may go to the Court and get permission to repossess the property upon which they have a valid lien.

There are some exceptions to this general rule. The most common being child support and certain property tax situations. Specific questions regarding your situation and whether these exceptions apply to your case should be discussed with your attorney.

May I repay some of my creditors and not others under Chapter 13?

You cannot selectively pick and choose some particular creditors and decide to pay them "on the side". All of your debts must be dealt with through your Chapter 13 plan. Any payment which you make to a creditor must be paid under the authority of the Court, by the terms of the law, and not by any personal desires. If you want to pay creditors, you must do so through your Chapter 13 plan.

Are student loan debts dischargeable?

Most student loans cannot be discharged in bankruptcy. You should refer more specific questions to your attorney.

How are debts that have been co-signed or guaranteed by another person handled under Chapter 13?

If a consumer debt which has been co-signed or guaranteed by another person is being paid off in full under the Chapter 13 plan, the automatic stay that was entered when the case was filed will prevent the creditor from collecting the debt from the other person. However, the creditor may ask the Court's permission to collect from the other person the portion of the debt that is not being paid off under the plan.

The Trustee will only pay in full those co-signed debts that are specifically provided for in your plan.

What is required for court approval of a Chapter 13 plan?

The Court will confirm a Chapter 13 plan if:

(a) the plan complies with the requirements of Chapter 13 generally;

(b) all required fees, charges, deposits and payments have been made;

(c) the plan has been proposed in good faith;

(d) each secured creditor

(1) has accepted the plan;
(2) is given back his collateral;
(3) is allowed to retain his lien on his collateral;
(4) is paid the full amount of the secured claim under the plan;

(e) each unsecured creditor will receive under the plan at least as much as the creditor would have received if you had filed Chapter 7;

(f) it appears that the debtor will be able to make the required payments and to comply with the plan.

What if the court does not approve my Chapter 13 plan?

If the Court does not confirm the Chapter 13 plan you have proposed, it will usually give the reasons for such disapproval so that the plan may be appropriately modified, converted to a Chapter 7 or dismissed. Once a case is dismissed, your creditors may again pursue the payoff of your debts.

When must the Chapter 13 payments begin and how often must they be made?

A first payment must be made to the Chapter 13 Trustee within thirty (30) days of filing your bankruptcy plan. We will NOT accept your payment at our office. There are three ways to have your payment applied to your case.

(1) Make an online payment through E-Pay, our electronic payment system. Details on how to register for E-Pay can be found at E-Pay.

(2) Mail your plan payments to the Trustee's payment address. Mailing or personally delivering the payment to the Trustee's office only delays the posting of the payment to your case. If your case is up for a motion or hearing in court please give your attorney a copy of the payment receipt to prove the payment. Do not send your payments to the Clerk of the Bankruptcy Court.

All payments must be in the form of a money order or cashier's check. Be sure to include your name, address, and your case number. The chapter 13 trustee's office will not accept cash payments.

(3) Payroll deduction. Ask your attorney to complete and file a payroll order to court. Payments will be submitted by your employer.

Payroll deduction orders

You may find it easier to have your employer deduct your plan payments from your paycheck. Additionally, if you fall behind in your plan payments, the judge may order your employer to deduct your plan payments from your paycheck. It is important that both you and your employer understand that such an order is not a garnishment. If your employer has any questions, he or she should contact your employer's legal counsel. Be sure to notify us if you change or terminate your employment.

What if I am temporarily unable to make my Chapter 13 payments?

It is very important to contact your attorney if you ever expect to miss a payment due to layoff, medical disability, etc. If you are temporarily out of work, injured, or otherwise unable to make the payments required under the Chapter 13 plan, the Court may upon proper application allow you to suspend payments for a period of time. If it appears that your inability to make the required payments will continue for an extended period, you may be permitted to amend your plan, or the case may be dismissed or converted to Chapter 7. Remember-the Trustee's office has no authority to let you miss a payment or allow you to pay less than your plan requires. Only the judge can make such a decision. Your lawyer can ask the judge to change the requirements of your plan if you feel that you cannot meet the obligations of your plan.

May I make a higher payment than is required under my plan?

If you are ever in a position to increase your plan payments to the Trustee you should contact your attorney for advice on prepaying your plan payments.

What if I later decide that I no longer want to make payments and to continue with the Chapter 13 plan?

Federal bankruptcy law allows the debtor to either dismiss a Chapter 13 case or convert it to Chapter 7 at any time, unless your case has previously converted from another chapter of the bankruptcy code. No one can force you to remain under a Chapter 13 plan if you do not wish to remain. If you desire to stop your case, contact your attorney.

However, if you simply stop making the Chapter 13 payments, any creditor in your case may ask the Court to dismiss your case. The Trustee will ask the Court to dismiss your case or place you on payroll deductions if:

(1) you fail to make your first payment within thirty (30) days of filing your bankruptcy plan and/or
(2) if you fail to make your required payments regularly during any months of your plan.

You should understand that a dismissal will reactivate all unpaid or disputed debts, all interest, finance charges, all late charges not allowed by the Bankruptcy Court, and all debts of creditors who did not file their claims. Consider also that you will be forced to deal with those creditors on their terms, not yours or the Courts.

How do I find out how much is owed to creditors under my plan?

At least twice a year, the Trustee's office will send you a report of what has been paid to all your creditors. Be sure to review this report carefully and contact our office and your attorney immediately if you have any questions or concerns. The report will list the creditor's claim amount and the amount paid to date to each of your creditors. If the Trustee is making your mortgage payments for you, the balance includes only one monthly mortgage payment. Also, it is possible that one or more of your creditors is receiving interest and therefore the balance will change from month to month. The balance due is, therefore, only an approximate figure.

How are the claims of creditors handled under Chapter 13?

Unsecured creditors must file their claim with the Clerk of the Bankruptcy Court within ninety (90) days after the first date set for the First Meeting of Creditors in order for their claims to be allowed. Governmental agencies have 180 days from the date of filing to file their claim.

How are creditors paid?

The money which you pay to the Trustee is used to pay expenses of administration, including payments to your attorney, and payments to your creditors. So that you will have some idea as to how the creditors are paid, you should understand that there are three (3) basic types of claims: priority (which are tax claims), secured (holding lien on property), and unsecured (consumer debt with no liens on property). Generally, we pay the administrative costs (your attorney's fees) first, then secured creditors, then priority, and finally, unsecured.

What happens to creditors who were not listed on my schedules?

Creditors not listed by you when you filed can create some potential problems. There are two (2) kinds of unlisted creditors: those who were owed money at the time of your filing but were forgotten (''unlisted creditors"), and those creditors who have a bill that was incurred after you filed (''post-petition creditors''). If you find an unlisted creditor, you should let your lawyer know the details immediately.

What if I don't agree with how much a creditor is receiving?

The Trustee pays creditors the amount listed on their proof of claim and as provided by your plan. If you disagree with the amount a creditor claims you owe them contact your attorney.

Can I incur new debt after I filed my Chapter 13 plan?

You may find yourself in a situation where you need to incur additional debt after you have filed your Chapter 13 plan. The following are the guidelines on incurring additional credit provided by the Bankruptcy Code:

1) the debt must be for consumer debt and "for property or services necessary for the debtor's performance under the plan."

2) the Trustee does not have the authority to approve or deny additional credit that is secured by real estate. If you wish to purchase, sell or refinance your real property contact your attorney.

3) the Trustee does not authorize extensions of credit. All requests for additional credit must be made through the court.

Will a Chapter 13 bankruptcy affect my credit rating?

Your credit rating during and after completion of Chapter 13 will ultimately be based upon the personal opinion of any credit grantor who looks over your credit record. Your credit record is a record of all your past credit performances. This record is made available to a creditor, and he or she makes up his or her own mind, by his or her own standards, as to whether or not he or she wants to grant credit to you.

Your bankruptcy will remain on your credit report any where from 7 to 10 years, depending on the credit reporting agency's policy.

Can I sell property while I'm in a Chapter 13?

If you want to sell your property, trade in a car, or sell your home, be sure to discuss it with your attorney.

What happens when all payments have been completed?

Once there is enough money in your case to complete payment to all your creditors, the closing officer will begin the process to close your case. The closing process is completed in the following order:

(1) Final audit Our office completes an audit of your case file by comparing all documents to the court's records. We verify that all claims filed in your case were paid correctly and all court orders were properly administered. We also verify that all the documents that you were obliged to submit were tendered or filed.

(2) Cure letter If your mortgage arrears is paid off during your plan, the Trustee mails a letter to the mortgage company. The mortgage company has 21 days to respond.

(3) Payroll deduction If your payments are being made through your employer, we will direct your employer to stop making deductions from your payroll after the final audit is complete.

(4) Case completion After we complete the final audit and record any missing documents, we will notify the Clerk of the Court that all your plan payments have been received and we will update the status of your case as complete in our computer system. A Notice of Completion of Plan Payments will be filed with the Bankruptcy Court as soon as practicable. (Based upon the volume of cases, this can take up to 150 days after we make the last disbursement in your case.)

(5) Refunds If there is still money in your case after all creditors have received their final payment and your case is complete, you will receive a refund upon approval by the Trustee. Debtor refunds are processed once a month and they will be mailed by the last Friday of the month. DO NOT call the office seeking a refund amount. Refunds are automated and you will find out if you are due a refund when you receive the check in the mail.

(6) Order of Discharge You may or may not be entitled to a Discharge in your case. The Trustee does NOT decide who will receive a discharge. You should contact your attorney to find out if you are eligible. If your case was filed after October 17, 2005, you will not receive a discharge if either of the following are missing.
- A certificate filed with the Clerk of the Bankruptcy Court regarding the completion of the required debtor financial management course.
- A Post Confirmation Domestic Support and Tax Return Declaration.

(7) Bankruptcy discharge papers If you received a discharge in your case, your discharge Order will be available from the Clerk of the Bankruptcy Court. This is a legal document that states that you have been discharged from certain debts scheduled in your bankruptcy case. The Trustee cannot answer questions regarding your discharge. You should contact your attorney.

(8) Obtaining copies of documents Copies of documents and other paperwork filed in your case, including discharge orders, can be obtained from the Clerk of the Bankruptcy Court. Do not contact the Trustee for these documents. The Clerk can be contacted at:

Clerk of the Bankruptcy Court
Dirksen Federal Building
219 South Dearborn Street
Room 713 (File Room)
Chicago, Illinois 60604
Phone: 312-435-5694
Website: www.ilnb.uscourts.gov
Hours: 9:00 AM to 4:30 PM

How do I inform the credit agencies of my Chapter 13 completion?

After your case has been discharged, your discharge papers are available at the court house. This legal document states that you have been discharged from your scheduled debts. The Trustee will not have copies of your discharge papers. The court house is located at:

219 South Dearborn Street
Room 713 (file room)
Chicago, IL 60604
(312) 435-5862

Bankruptcy court does not take requests for copies over the phone. Request may be in writing in care of the correspondence department or made in person. If you go in person, you must have your bankruptcy case number, picture identification and money for photocopies. Make several copies of your discharge papers, and send copies to the three major credit bureaus:

Experian National Consumer Assistance Center
P O Box 2002
Allen, TX 75013-2002
(888) 397-3742

Transunion Corporation Consumer Disclosure Center
P O Box 1000
Chester, PA 19022
(800) 888-4213

P O Box 105851
Atlanta, GA 30348
(800) 685-1111

Where do I obtain title to my property after completion of my Chapter 13?

When a creditor has had his claim paid by Chapter 13, whether partially or in full, he should and usually does, send the "paid-in full" papers to you. Contact the creditor holding title, not the Trustee's office, to obtain your titles.

What does the Chapter 13 Trustee expect of me?

As your Trustee, I expect you to be cooperative and truthful with me. I also expect you to ask questions when you do not understand any aspects about administration of your case. Please notify me promptly whenever you change your address, telephone number, or employment status. Do not incur new debts or enter into any leases without the court first approving it. Finally, I expect you to handle your payments in a prompt, regular, and business-like manner.

You can be assured that we will make every effort to assist you in making your plan work.

We sincerely appreciate the opportunity to be of service to you at this time. Thank you for your trust and confidence!

faq.html -- Revised: 09/28/23

Portions of this section appear in What's Going To Happen Now That I Filed Chapter 13 Bankruptcy? Copyright © 1990, 1993, 1995, 1996 by Kathleen A. Laughlin. All Rights Reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, or mechanical, including photocopy, recording, or any information storage and retrieval systems without permission from Kathleen A. Laughlin, Attorney at Law and Chapter 13 Trustee District of Nebraska, P.O. Box 106, BoysTown, NE 68010-0106.

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