The Trustee’s Responsibilities
The Chapter 13 trustee in a Philadelphia bankruptcy case administers cases filed under Chapter 13 of Title 11 U.S.C. The Chapter 13 bankruptcy plan is a reorganization plan for an individual, a couple or a small unincorporated business seeking debt relief. A Chapter 13 plan in a Chapter 13 bankruptcy typically ranges in length from 36 to 60 months.
The Chapter 13 trustee has several primary functions. The trustee reviews the Chapter 13 bankruptcy petition for accuracy. There is a meeting of creditors conducted by the Chapter 13 trustee. The trustee reviews the Chapter 13 plan to make sure it is workable. Finally, the Chapter 13 trustee collects payments from the debtor and distributes payments to creditors.
Distribution of Payments
The distribution of payments to creditors is based on a schedule. The Chapter 13 trustee follows the rules as provided under the Bankruptcy Code. As a general rule, priority creditors such as taxes get paid first. Next, are secured creditors such as mortgage arrears. If there are still any monies available the trustee then makes payments to general unsecured creditors. This includes personal loans, medical bills, utility bills and credit cards. If there are no monies left, you are generally able to wipe out the bills without paying them.
What if a Person Stops Making Payments?
For a bankruptcy in Philadelphia, if a person stops making payments to the Chapter 13 trustee, a motion is usually asking the Bankruptcy Court to dismiss the case for failure to make the payments. A hearing date on the motion is scheduled. The debtor can make up the missed payments prior to the hearing and the motion will usually be withdrawn. If the debtor does not pay the trustee up to date, he or she should try to make a substantial payment toward any trustee payments that were missed.
The trustee will then usually agree to postpone the hearing on the Motion to dismiss for 30 days. This gives the debtor a chance to get caught up. If the payments are not paid up to date, the case will usually be dismissed unless the debtor can provide the bankruptcy judge with a good reason why the payments were missed or that the plan should be modified or changed. A bankruptcy lawyer can advise you exactly what do if a motion to dismiss has been filed.
Final Report and Account
If a person completes the payments, and the trustee has finished distributing monies to creditors, the Chapter 13 trustee will then file a final report and account. This shows all monies that have been received and the creditors that have been paid. After the trustee records have been reviewed and found to be in order there is the last step. The Philadelphia Bankruptcy Court issues the Chapter 13 discharge order. This is done by the bankruptcy judge who handled the case and an order is also issued closing the case.
Our bankruptcy attorneys in Philadelphia can advise you if a Chapter 13 case is able to accomplish the goals that you are seeking. You can contact attorney David M. Offen, Esq. at 215-625-9600.
