Chapter 13 Brochure

PLEASE READ THE FOLLOWING INFORMATION CAREFULLY AS IT CONTAINS IMPORTANT DETAILS WHICH MAY BE RELEVANT TO YOUR CHAPTER 13 BANKRUPTCY CASE. IF YOU HAVE ANY QUESTIONS REGARDING THE INFORMATION SET FORTH HEREAFTER OR ANY OTHER QUESTION, PLEASE SEND AN E-MAIL TO JODY L. HOWE AT THE E-MAIL ADDRESS SET FORTH BELOW AND SHE WILL RESPOND TO YOUR QUESTIONS WITHIN 24 HOURS.

THE ATTORNEYS and CHAPTER 13 PARALEGALS IN THIS OFFICE ENDEAVOR TO COMMUNICATE WITH YOU AND SERVE YOU TO INSURE YOUR SUCCESS IN THIS CHAPTER 13 CASE.

Communicating with our Office via E-mail

The best, fastest way to receive a response from our office staff or attorneys is via e-mail. E-mail is our favored way of communicating with our clients. We receive a high volume of inquiries and it helps us a great deal if we can screen your questions via e-mail.

If we cannot address your issue effectively in an e-mail response, we will telephone you. If you have any questions or concerns not addressed in this brochure or on our website, please send your questions to our office via e-mail and we will promptly respond to any concerns that you may have.

Jody: jody@utahbankruptcy.com

Final Review - Crystal crystal@utahbankruptcy.com

Motions- Victoria: victoria@utahbankruptcy.com

Chapter 13 Issues- Anita anita@utahbankruptcy.com

Chapter 7 Issues - Jessica jessica@utahbankruptcy.com

Mortgages and Claims Review summer@utahbankruptcy.com

On the day we file your Bankruptcy, a unique number will be assigned to your case. We will e-mail, text or telephone you with your Bankruptcy Case No. as soon as your case is filed. Your Bankruptcy Case No. protects you from your Creditors. If a Creditor telephones you following your bankruptcy filing, first double check and make sure you have included the Creditor in your bankruptcy schedules. If you have not, obtain the pertinent details from the Creditor to add them to your case, then e-mail the information to your case manager to enable us to add them to your case. If they are listed in your schedules, give them your Bankruptcy Case No. and the date of filing. Most Creditors understand that they are prohibited from communicating with you after you have filed for bankruptcy.

Within about ten (10) days from the date your bankruptcy case is filed, the Bankruptcy Court sends a notice to every Creditor you have listed in your bankruptcy schedules, informing them of your bankruptcy filing and dates relevant to your case. If a Creditor is a huge institutional corporation such as a credit card company, the appropriate department responsible for terminating collection efforts may not immediately receive notice of the bankruptcy. Therefore, if a Creditor contacts you before they receive written notice of your bankruptcy, simply give them your case number and the date of filing (after verifying they are listed in your bankruptcy schedules).

Most Creditors understand the legal significance of a bankruptcy filing and the severe penalties that may be imposed if they continue to attempt to collect from you. If they persist in attempting to collect from you, please request the name and telephone number of the particular person who is communicating with you. Sometimes this information can be difficult to obtain. Then call or e-mail this information into our office, and we will communicate with the Creditor and make them cease all efforts to collect from or communicate with you. If necessary, we will seek sanctions from the Court.

It is not unusual for Creditors to continue to send statements or collection letters for several weeks following your Bankruptcy filing. Even though all of your Creditors will receive Notice from the Bankruptcy Court of your bankruptcy filing within 10-14 days of the filing date, it often takes time for this Notice to be directed to all appropriate departments of huge, institutional Creditors. If you receive statements or collection letters in the mail, verify you have included the Creditor in your bankruptcy, and write your case number on the statement or letter, indicate you have filed bankruptcy, and return it to your Creditor in the mail. Again, please verify the Creditor is included in your schedules.

All funds you have on hand ON THE DATE OF FILING, including cash or funds on deposit in any financial account (generally banks or credit unions), becomes property of the bankruptcy estate. The Bankruptcy Trustee will verify the exact amount you have in your financial account(s) on the date of filing by examining statements from all financial accounts covering the date of filing which you are required to take with you to your initial bankruptcy hearing. Further, you are required to disclose in your bankruptcy schedules, all cash you have on hand on the date of filing. If you have significant amount of cash or on deposit in your financial accounts, it could impact the amount of your Plan Payment in your Chapter 13 case. In addition, if you later convert your case to a Chapter 7 Case, the Chapter 7 Bankruptcy Trustee will request that you turn these funds over to them, and if you have spent the funds, you will need to come up with the money to pay the Trustee.

It is very important that we file your case on a day on which funds in your bank account are low such as before you receive your paycheck, or after you have paid your major monthly expenses such as rent, mortgage and car payments. Be cognizant of the fact that in the days before we file your case, you should pay your expenses with cash or money orders so that the funds are pulled out of your account immediately, eliminating the necessity of waiting for checks to clear your bank accounts.

If you owe money to the bank at which you have your accounts at the time of filing, you should consider opening a new bank account before you file bankruptcy.

Yes, you are required to appear at an initial hearing in relation to your bankruptcy case. This hearing is known as the §341 Hearing or Meeting of Creditors, and is conducted approximately 30-40 days following the date your bankruptcy case is filed. The hearing is conducted by the bankruptcy trustee assigned to your case in various locations based on where you reside. It is imperative that you appear at the hearing, and your spouse must also be present if you filed jointly with your spouse. An attorney from our offices must be present with you at the hearing. If you fail to appear, your case may be dismissed. At the time you receive notice of your initial bankruptcy hearing, you will also receive notice of your Confirmation Hearing. (See attached Notice.) You will note that your Confirmation Hearing will be conducted a little over a month after your bankruptcy is filed. It is possible you may not need to attend the Confirmation Hearing if we are successful in obtaining confirmation of your case before the hearing. We will not know if you will be required to attend the Confirmation until shortly before the actual date of the Confirmation Hearing.

Although all Creditors are invited to attend the hearing, most Creditors do not appear at the hearing. They are more likely to address issues pertaining to your case by corresponding with or telephoning our offices. Occasionally Creditors who have provided financing for vehicles and other assets appear at the hearing. However, a representative from the IRS, Utah State Tax Commission and R.C. Willey is present at all §341 Hearings.

Within 10 to 14 days from the date your case is filed, the Bankruptcy Court will send Notice to you and all of the Creditors you listed in your Bankruptcy schedules, of the date, time and place of your bankruptcy hearing, and will set forth other important dates and deadlines relevant to your case. A representative from our office will attempt to reach you by telephone or e-mail a few days before the hearing to remind you of the hearing date and time.

Re-scheduling the date and time of your initial hearing is extremely difficult, and in many cases, impossible. Just as we must rearrange our schedules to ensure we are present with you at your hearing, it will be necessary for you to do the same. If it is impossible for you to attend your hearing because of a personal or medical emergency, we can seek permission from the Court to obtain a new hearing date. If you unavoidably and unexpectedly must be out of town at the time of your hearing, we may be able to obtain Court permission to conduct the proceedings telephonically, provided we have sufficient advance notice of your inability to appear in person.

1- You must take with you to the hearing, PHOTO IDENTIFICATION such as a driver’s license or passport; and VERIFICATION OF YOUR SOCIAL SECURITY NUMBER. Social security numbers are never listed on passports, and rarely included on driver’s licenses. Verification of your social security number which will be acceptable to the bankruptcy trustee is: social security card (best), insurance card, original W-2, social security card, other formal documentation of your social security number.

2- You are required to take with you to the hearing a copy of statements from all of your financial accounts (usually just bank and credit union statements), reflecting the account balance(s) on the day the case was filed.

3- You are required to take with you a copy of the paystubs(s) you received most recently prior to the date of the hearing. These are in addition to the ones you previously filed before the case was filed.

Your first plan payment must be received by the trustee 5 business days prior to the 341 hearing. Payment can be made electronically on the trustee's website at http://www.ch13kra.com/ or a payment can be mailed in by cashier's check or money order to "Kevin R. Anderson, Chapter 13 Trustee, 3111 Momentum Place, Chicago, IL 60689-5331. The amount of your Chapter 13 plan payment was disclosed to you in your final review appointment. All other payments will be due on the 25^th day of the month following the month in which your initial hearing was conducted.

Approximately eight to ten bankruptcy hearings are scheduled each hour; and although your portion of the hearing will involve examination time of about five to ten minutes (generally); it is not possible to ascertain in advance when within the hour, your case will be called. You must, therefore, set aside the entire hour on your calendar. Remember to schedule sufficient time for traveling and parking prior to the hearing. Your attorney will meet you at the hearing room approximately fifteen minutes before the scheduled hearing.

The Chapter 13 Bankruptcy Trustee assigned to your case or his representative will have very carefully reviewed prior to the hearing, all of the statements, schedules and other documentation filed in relation to your case. The Trustee may question you regarding any aspect of your statements, schedules or documentation they consider to be relevant. The Chapter 13 Trustee or his representative may request changes and corrections to your case, income verification, business information if appropriate, vehicle information, and a number of other specific requests. Your attorney will take detailed notes of the Trustee’s instructions and will work with you following the hearing to comply with the Trustee’s requests.

What happens in my case following the initial bankruptcy hearing? In this jurisdiction at the present time, the confirmation process takes about two and one-half months from the date of filing. We proposed an initial Chapter 13 Plan at the commencement of your case, but the Court does not approve your Chapter 13 Plan and make it the Order of the Court (Confirmation) until about two and one-half months following the date your case is initiated. At the time you filed your case, you set forth what you believed you owed your Creditors at the time of filing. After you file, your Creditors have approximately four months to file Claims with the Court setting forth what they believe you owed them at the time of filing. We will review all claims submitted by your Creditors. If we disagree with the Claims they submit, we will file an objection to their Claim on your behalf to be resolved by the Court. If your Creditors fail to file a Claim with the Court (and they frequently fail to file Claims), they are not permitted to participate in the distribution under your Chapter 13 Plan and their Claim is discharged at the end of your Chapter 13 Plan. Creditors must file their Claims by a particular date. The cut-off date (see attached Notice) is an absolute deadline and if they file their Claim late, they cannot receive a distribution under your Chapter 13 Plan.

Our attorneys and Chapter 13 paralegals will work closely with you to comply with the Trustee’s instructions and to prepare your case for confirmation. In furtherance of this objective, please cooperate with our office in communicating with us and providing any additional documentation required or requested by the Trustee’s office. The Chapter 13 paralegal who will assist in obtaining confirmation of your Chapter 13 Plan is Anita. Please respond to her telephone calls and e-mail communications. She is capable of answering most questions concerning your case and the Trustee’s directives.

An additional requirement in your Chapter 13 case is completion of a course in Financial Management, within 30 days after your filing date. You can obtain information regarding this course at www.getbankruptcycertificate.com

This course is in addition to consumer credit counseling you were required to complete before your case was filed. Unless debtors complete a course in Financial Management, their debts will not be discharged (eliminated) in bankruptcy. Request that the certificate of completion of this course be sent to our office at reception@utahbankruptcy.com. In addition, complete, sign and provide to our office, Form B23 which much be filed with your certificate.

1. Prepare or obtain copies of all missing tax returns requested by the IRS and USTC at the §341 Hearing. Deliver signed copies to our office and we will file them with the taxing entities on your behalf. If you need assistance in preparing the returns, we can refer you to an accountant. It is extremely important that you obtain the requested returns as soon as possible following the §341 Hearing. Your case cannot be confirmed with outstanding tax issues.

2. If you are self-employed, the Trustee will generally request that you complete a Business Questionnaire which they require to be submitted one week before the §341 Hearing. Complete the Questionnaire and provide it to our office. We will review it and forward it to the Trustee.

3. If you are self-employed, the Trustee will also request you to provide them with Profit and Loss Statements from the filing date to the month before confirmation. We can offer guidance in preparing these statements if you desire. Please provide our office with the Profit and Loss Statements and will review them and forward them on to the Trustee.

4. The Trustee may request vehicle information regarding one or more of your vehicles. We will furnish you with a form to complete to provide the Trustee with all appropriate details regarding your vehicles.

5. We may need your assistance in adding missing account numbers or addresses to your bankruptcy schedules. We attempt to identify such missing information prior to filing; but if we inadvertently omit these details with respect to one or more of your Creditors, we will need your assistance in obtaining the missing information.

6. We will need your cooperation in gathering and turning over any other information requested by the Chapter 13 Trustee.

7. Following the initiation of your case, your secured Creditors may file motions with the Court and communicate with our office regarding your secured assets. If you desire to retain the asset in which the Creditor has a security interest and pay for it through your Plan, we will negotiate values and interest rates on your behalf at the lowest and best rates possible for your benefit. We will review details of our negotiations with your Creditors before accepting an agreement with any Creditor.

Preparing your case for confirmation is a complicated process and we request that you cooperate in giving us the information we need to properly prepare your case. We will begin working on confirmation issues after meeting of creditors.

Pay your mortgage payment on time! One of the main reasons individuals file Chapter 13 is to cure home mortgage arrears. It is extremely important for you to remain current in payment of your home mortgage following the filing of your bankruptcy case. You must make your first mortgage payment commencing with the the first payment that is due after your case is initiated. For example, if you filed your case on July 2, 2004, your next mortgage payment would be due in August and it would be very important to pay the August mortgage payment and the mortgage payment for every month thereafter.

If you cannot pay both your mortgage payment and your Chapter 13 Plan Payment, pay the mortgage payment. It is easier (and less expensive) to deal with the Chapter 13 Trustee than the mortgage company. If you encounter financial difficulties after you file your Chapter 13 case, we can seek an abatement from the Trustee authorizing you to miss a few plan payments. If you become delinquent in payment of your home mortgage, the Creditor will file a motion with the Court to seek permission to begin to foreclose on your home. Missed mortgage payments following the filing of your case are referred to as post-petition arrears. The Creditors will permit you to cure post-petition arrears over a six month period and we can negotiate this on your behalf if you desire; but the mortgage lender will add on about $800.00 in attorney fees for the expense of the Motion which you must pay in addition to the post-petition arrears.

Pay your Chapter 13 Plan Payments on time. If you are able to pay both your mortgage payments and Chapter 13 Plan Payments on time, you will be re-building your credit even though you are in Bankruptcy. In addition, you will make points with the Chapter 13 Trustee and the Judge assigned to your case. If you desire to incur debt to refinance your home, purchase a vehicle or for some other reason while you are still in Chapter 13, you will need to obtain Court approval to incur the debt, but you are likely to get a better interest rate and terms if you have made post-petition mortgage payments and plan payments in a timely manner.

If you are unable to make your plan payment or your mortgage payment in any particular month, contact us immediately. Things happen when you are in bankruptcy that might make it difficult for you to make your mortgage payment or plan payment. If your financial reversals are temporary, we will review your options in detail with you. If your financial difficulties are a result of loss of employment or other similar problem that could possibly extend longer than a month or two we will evaluate the option of permitting your case to dismiss and re-filing after your case is dismissed. This is a complex option you should discuss in an office consultation with your attorney.

Immediately provide us with all tax returns and other information requested by the IRS and USTC at your initial hearing. It is important to resolve as expeditiously as possible, all tax issues identified by the IRS and USTC at your initial hearing. If you need assistance preparing tax returns, we can refer you to an accountant and offer guidance in obtaining supporting documentation necessary to prepare your tax returns. You are under a deadline to resolve tax issues in your Chapter 13 case and if you fail to meet the deadline, your case may be dismissed.

Keep receipts of your mortgage payments and Chapter 13 Plan Payments. If a dispute arises with your mortgage lender or the Chapter 13 Trustee regarding mortgage or plan payments, you may need to document payments you have made.

Let us know immediately of any change of address, telephone number or e-mail address. It is very important that we are able to find you when we need you.

If you are considering converting your case from a Chapter 13 case to a Chapter 7 case, schedule an appointment with your attorney to evaluate this option. You have the absolute right to convert your case to a Chapter 7 case if you meet the chapter 7 criteria. This is an important decision, however, and if you are considering converting your case, you should schedule an appointment with your attorney to discuss all of the ramifications of conversion.

Please cooperate with our Chapter 13 Paralegals in providing documentation requested by the Chapter 13 Trustee and preparing your case for confirmation. We are excited to have on our staff at Utah Bankruptcy Professionals, four highly trained, experienced and competent Chapter 13 paralegals to assist you in prosecuting your Chapter 13 case, negotiating with your Creditors and preparing your Chapter 13 Plan for Confirmation. It helps us a great deal if you promptly provide to the Chapter 13 paralegals, all documents they request to properly manage your Chapter 13 case, and address the numerous issues involved in ensuring your Plan will be confirmed.

Adjust your income tax withholding so that you neither owe nor receive a refund while in bankruptcy. While in Chapter 13, it is important that you do not incur any new debt, including tax liabilities. In addition, if you receive a refund, you will be required to turn any refund in excess of $1,000.00 to the Trustee. Better to adjust your withholding so that you have the extra income available to you each month.

If I intend to surrender (return) a vehicle to a Creditor, what steps should I take?

You should contact the Creditor and make arrangements to either return it to them or have them pick it up. Most individuals make arrangements to return the vehicle if it is operable. When you return the vehicle, make sure you obtain a receipt of some type from the lending institution, acknowledging your return of the vehicle.

If I intend to surrender (return) a vehicle to a Creditor, when am I required to do so?

The absolute deadline is 45 days following the §341 Hearing; although the Creditor can force you to return it earlier by obtaining relief from stay (Court permission).

After you initiate your bankruptcy case, Creditors are prohibited from taking any action to repossess vehicles or other assets securing the debt you have with them without first obtaining Court permission. If a Creditor obtains Court permission, they can immediately repossess a vehicle

How can a Creditor obtain Court approval to repossess my vehicle or other similar asset?

Creditors must file a Motion with the Court and schedule it for hearing before a Judge to obtain Court permission to go forward with a repossession. (The Motions are generally titled, “Motion for Relief from Automatic Stay”.) If a Creditor elects to file such a Motion, the Creditor must file the original copy of the Motion with the Court, and mail a copy to you and a copy to our offices. Be assured that we will receive a copy of any Motion you receive from any Creditor at the same time you do,

If you desire to surrender the vehicle or other asset, we will not oppose the Motion and any hearing scheduled on the Motion will be cancelled within approximately 18 days from the date the Motion was mailed out. You will not need to attend the hearing. The Motion will be granted based on your non-opposition, and the Creditor will be free to repossess the vehicle or asset (unless you have already returned it to them) and to proceed to sell the vehicle or asset. A secured creditor may not sell a vehicle or asset you return to them during your bankruptcy case without first getting Court permission or relief from the automatic stay. Otherwise, they must wait until your case is closed before they can sell the vehicle or other asset.

If you desire to keep the vehicle or asset, we will aggressively negotiate the lowest values and interest rates possible on your behalf to be paid through your Chapter 13 Plan to keep your Plan Payment low.

Reaffirmation is not a concept in Chapter 13. You will either surrender a vehicle, or pay the fair market value of the vehicle through your Chapter 13 Plan with interest. With respect to leases, you have the option of either assuming (keeping) or rejecting (returning) the leased vehicle. If you reject a leased vehicle or surrender a vehicle you are purchasing, the Creditor will file a claim with the Court for a deficiency upon disposition (sell) of the collateral.

If a Creditor repossesses my vehicle and sells it for less than I owe on it, am I responsible to pay the deficiency remaining on the debt?

Yes. Any deficiency will be treated as a general unsecured claim and will be paid the same percentage as all of the other unsecured debt in your bankruptcy case. For example, if you owe a Creditor $20,000 in relation to a car loan and they repossess and sell the vehicle for $15,000, the Creditor will file a $5,000 deficiency claim in your Chapter 13 case. If you propose to pay your unsecured creditors 10 cents on the dollar through your Chapter 13 Plan, the car creditor would be paid 10 cents on the dollar for its deficiency claim or a total of $500.

You retain your real and personal property in Chapter 13. One of the main reasons individuals file Chapter 13 is to cure home mortgages arrears to save their homes. Another reason is to protect the equity in their home if it exceeds the Homestead Exemption. The Homestead Exemption in the State of Utah is very generous. Up to $20,000.00 of equity per person is protected in your primary residence at the time of filing. If the equity in your home exceeds $20,000 (or $40,000 for joint debtors), the excess equity must be factored in the liquidation analysis in establishing your Plan Payment.

Your Creditors must receive as much money in a Chapter 13 case as they would in a Chapter 7 case. For example, if you could sell your home and other assets in a Chapter 7 case and pay all of your Creditors 20 cents on the dollar, you will be required to pay them 20 cents on the dollar in a Chapter 13 case, even though your home and other assets will not be sold.

No, it will not. If you believe you may have judgment liens against your home, you should obtain a title report and consult with your attorney about filing the necessary paperwork to remove these liens. Otherwise, when you seek to refinance or sell your home, you will need to pay the judgment liens. If a judgment is entered against you in the State of Utah, it becomes an automatic lien on any real property you own in the county in which the judgment is entered.

If I decide to surrender my home after I file Chapter 13, what should I do and when do I need to move out?

Deciding to surrender a home is a major decision which you should discuss with your attorney in an office consultation. This type of decision often precipitates the necessity or desire to convert to a Chapter 7 case. The foreclosure process, which cannot even be commenced without Court permission, takes a period of time to accomplish, depending on where the Mortgage lender was at in the process at the time of filing. It could be as short as about 30 days following the date the Mortgage Creditor obtains Court permission to recommence foreclosure proceedings, or as long as four to six months if the Mortgage Creditor is just beginning the process. The last event in the foreclosure process is the foreclosure sale. The Mortgage Creditor is required to give you 30 days advance notice of the foreclosure sale. After your home is sold in a foreclosure sale, you must vacate the premises. We will help you identify the date of any pending foreclosure sale as far in advance of the sale as possible.

Does a representative of the Bankruptcy Court come to my home in relation to my bankruptcy filing?

No, not unless they have some reason to believe you are concealing assets in which case they have the option of involving the FBI in your case. If they want something, they will ask you to provide it to them, they do not come to your house to get it, nor do they contact your bank or employer.

In most cases, you are prohibited from making direct payments to any Creditor you owe money to at the time of filing your Chapter 13 case. If you are leasing a vehicle or asset at the time you file your Chapter 13 case, lease payments must be paid directly to the Creditor and not through the Chapter 13 Plan. Frequently, a secured asset will be paid by a third party (usually a family member) outside of your Chapter 13 Plan. If you want to continue to pay a Creditor, you must wait until you have completed all payments under your Chapter 13 Plan before you resume direct payments to the Creditor.

Yes, you may add Creditors after you file your bankruptcy case until the Claims Cut-off Date provided the debt you desire to add was incurred PRIOR TO the filing date. You may not add debts incurred AFTER the filing date. You may add as many Creditors as you desire for an additional fee of $50.00 (per Creditor list), which includes a fee assessed by the Court to add Creditors after the filing date.

It is important in a Chapter 13 case to utilize your best efforts to identify and list all Creditors you owe money to on the date of filing. If you inadvertently omit a Creditor, they will be excluded from your Chapter 13 Plan. Although they cannot collect from you while you are paying your Chapter 13 Plan, you will still owe the debt when your Chapter 13 Plan Payments are completed. As long as you learn of the omitted Creditor before the Claims Cut-off Date, you can add them; if you do not learn about the Creditor until after the Claims Cut-off Date, you cannot add them.

Your bankruptcy hearing will be held in the Ken Garff Building at 405 South Main Street on the 2^nd Floor, Salt Lake City, Utah, in Hearing Room 250-A. The building is situated on the southeast corner of the intersection at 400 South and Main Street. Metered parking is available on 400 South, Main Street and other streets around the building.

Take the 24th Street Ogden Exit (345) off I-15 and travel east to Grant Street. Turn South on Grant Avenue one block to 25th Street. The Federal Building is on the Northeast corner of 25th Street and Grant Avenue.

Take the Provo Centre Street Exit off I-15. Find your way to University Avenue. The library is on the South side of University Avenue. The meeting room is on the ThirdFloor – accessible by stair from the Second Floor.

Confirmation Hearings are conducted in the Federal Courthouse at about 350 South Main on the West side of Main Street. If you are traveling to the hearing on I-15, take the 400 South Exit and travel East to Main Street. Metered parking is available on streets near the Boston Building, and on the North side of 400 South between Main Street and West Temple.