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All the creditors that
you listed on your Chapter 13 petition are under an automatic
restraining order which prohibits them from contacting you or your
employer in any way. If you get notices in the mail from your
creditors, send them to your attorney. Delinquent notices need not
cause any great concern, but if you get more personal, direct contact
from a creditor, such as a telephone call, a personal letter, a summons
or a visit in person, you should immediately inform them that you are
under Chapter 13 and give them your case number, the Trustee's name and
address and your attorney's name and address. By the same
token, you should not contact your creditors. Be sure you tell
your attorney the name of the person who contacted you.
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You may not deal with a
creditor, just as a creditor may not deal with you. You cannot
pick and choose some particular creditor and pay him "on the
side" because all of your debts must be dealt with through the
Court. Any payment which you make to a creditor may well be
illegal. All creditors 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 know how much you still owe a creditor, or all creditors,
you may call our office and ask for a copy of the accounting of your
case. The Trustee will mail you and your attorney a copy of your
case report twice a year. This record will show the payments
received by the Trustee and the balance owed to each creditor.
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While the creditors
which you list on your Chapter 13 petition are given the opportunity to
file a claim for payment, they are allowed only 90 days from the Meeting
of Creditors to file their claim. Approximately five months after
your meeting of creditors, we will send you a complete list of every
creditor who has filed a claim in your case and the amount which they
claim you owed them. You should read and examine this list,
called a "Motion to Allow Claims," very carefully. If a
creditor is listed incorrectly or any amount claimed does not appear
correct, you should contact your attorney at once. Unless your
attorney objects to a claim, we will pay the amount the creditor
requests, not the amount listed on your petition. If a creditor
does not file a claim within the time allowed and if you want that
creditor paid in your Chapter 13 case, please have your attorney file a
claim for the creditor.
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As noted above,
creditors have 90 days after the Meeting of Creditors to file their
claims for payment. Generally, they are not entitled to payment if
they file after that date. Tax claims are an exception to this
limit. Sometimes a creditor will file after the time limit.
The Trustee will assume that you want that creditor paid and will enter
with the Court a "Motion to Allow Additional Claim" to be paid
under your Chapter 13 plan. If you do not want to pay the claim,
contact your attorney, who must object to its payment as any claim
allowed will be paid. This means that unless you object to such a
claim the Trustee will pay the claim, even if it was filed late.
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Creditors not listed by
you when you filed can cause quite a few problems. There are two
kinds of unlisted creditors: those you owed money to when you filed and
forgot to list ---we call them "unlisted creditors" --- and
those creditors who have a bill that was incurred after you filed.
We call this type "post-petition creditors." If you
discover an unlisted creditor, one you owed but forgot to list, you must
let your attorney know the details immediately. Your attorney can
include this creditor in your plan and protect you. Time is very
important here, so do not delay if one shows up. Post-petition
creditors are rare because, except in emergency situations, you should
incur no post-petition debt without the express prior approval of the
Trustee. Post-petition debts should be brought to the attention of
your attorney so that a review of your plan can be made. Should
subsequent debts be added to your plan, a formal modification of your
plan may be required which may call for an adjustment in your payment.
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The money which you pay
to the Trustee is used to pay all expenses, including any attorney fees
to be paid through the plan, and your creditors. The Trustee makes
disbursements on a monthly basis.
There are four basic types of claims: (1) administrative, (2)
secured, (3) priority and (4) unsecured. Generally, you can say
that we pay administrative costs and at least part of your attorney's
fees first; then creditors with liens on your property (secured claims);
then other priority claims such as taxes; and then everyone else
(unsecured claims).
Since unsecured creditors are usually paid only after administrative,
secured and priority claims have been paid, it is often many months
before payments to unsecured creditors are commenced.
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A cosigner, comaker or
guarantor on any of your consumer debts is generally protected from
contact by the creditor as long as you remain under Chapter 13.
This automatic protection applies only in Chapter 13 cases. If the
cosigner, comaker or guarantor has given collateral for the loan, the
creditor must request a hearing before the Judge in order to proceed
against the property. This codebtor protection will only protect
cosigners, comakers or guarantors for the amount of debt your plan
proposes to pay. If your plan is not scheduled to pay the creditors
in full, a creditor may obtain permission to collect from the cosigner,
comaker or guarantor the percentage of the debt that your plan is not
going to pay.
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When a secured creditor
has had his claim paid by Chapter 13, he should, and usually does, send
the "paid in full" papers to you. Even if the creditor
fails to do this, it is not too significant since the official records
of the Court showing your plan is completely paid would overrule most
claims. Should you receive any
request for additional money after your plan is completed, contact your
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