Chapter 13 Plan Tips

CHECKING THE BOXES FOR A MISSOURI CHAPTER 13 PLAN

If you are using the Missouri form plan, be sure to check the boxes. If you don't you will receive an objection to your Plan. Even if you eliminate all choices but the one you want you must check the box. Keep in mind it is not just the trustee that can and will object, creditor's counsel also has objected to not checking the box.


MISSOURI CHAPTER 13 PLAN TYPES

Unless you get a approval from the trustee's office do not mix and match your Plan choices for the treatment of the unsecured creditors. You are either a DIP, Base 36, Base 55, 0% (my personal favorite) or 100%. If you pick more than one it tends to confuse everyone and I doubt it will be approved. Many times I have this great idea at the time of the signing but by the time the 341 rolls around when the trustee or his assistant's ask what was I thinking when I drafted this Plan, my creative moment usually does not make sense anymore and often results in the dreaded "staple page trustee report". Simplicity works especially since there seems to be new practice rules and cases everyday that keeps us on a daily roller coaster. No matter where you practice Bankruptcy, the case law is changing at such a fast pace that your debtor better be prepared to change course on a moment's notice.

Keep the Plans as simple as possible on both sides of the state line. I am attempting to make changes to my Plans that are so simple that any average debtor can understand what it means. Of course they say they understand but than they too forget the very second they leave the office. Currently I am working on a database so when the debtor leaves the office they can log into their case to refresh themselves as to why they are in a 13 and not receiving a discharge as a result of their previous 3 filings in the last 2 years.

Bottom line, keep the Plans clean and concise. If you are not sure about a Plan than call either Rick Fink, Jan Hamilton or Bill Griffin's office. All three offices will let you know what their preference is and are willing to discuss just about any issue that you wish to raise.


SURRENDERING STUFF IN MISSOURI 13

Keep in mind that if you are surrendering secured "stuff" you can no long surrender in lieu of entire debt. If your Plan is a 0% Plan than it is not a big deal because the ruling in Osborn is NOT forcing you into a different Plan type.

One issue that has been discussed is when the creditor is saying that the vehicle is worth a certain amount than they turn around and sell it for a mere pittance. I predict this will be the next issue to litigate as debtors' attorneys.

For example, Capital One states in the their POC that the 1999 Ford Escort is worth $10,000.00 today and it is fully secured up to that amount. Ms. Debtor on social security cannot afford that vehicle now and surrenders it. Cap One turns around and sells the vehicle at the local auction for $1500 and files a deficiency claim against Ms. Debtor. Chances are she would never need to worry about the deficiency claim because she is a 0% Plan. But stop and think for a moment for those who are a Percentage to the Unsecured Creditors Plan. Is it fair that the creditor claims that they just know that vehicle is secured up to $10,000 but than settles for $1500 when they sell it?

No, I do not know the answer yet but I truly believe that this will become an issue that will need to be brought before the court before it is all is said and done.


BALANCED BUDGET

This is one issue that drives the tees nuts on both sides of the state line. If you are proposing a certain Plan amount your I and J should match to show that your debtor can afford that Plan payment. If I and J results in a negative amount you must propose an outline of how your debtor is going to be able to afford to make this payment during the course of the Plan. It is helpful to also propose a time line of when the changes will take place in order for your debtor to be able to afford the payment.

The balanced budget issue tends to make the 7 trustees a little nutty also. Keep in mind even if the trustee does not raise a negative budget issue in a 7 the Judge might if you are seeking a reaffirmation. Balanced budgets will make your life so much easier as a debtor's counsel.

Kansas is more liberal with the budget issue than the Missouri side, at least in my experience. Either way like everything else in Bankruptcy at the moment the devil is in the details.


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