Chapter 13

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What is a Chapter 13 bankruptcy?
A Chapter13 bankruptcy may be filed by individuals with regular income. Debtors must
present a plan to repay all or part of their debts. The plan must provide for fixed monthly
payments to be made to the Chapter 13 trustee for a period of three to five years, depending on income and other factors. The plan must be approved by the court at a Confirmation Hearing.

The trustee begins collecting funds from the debtor during the first full month after the filing of the petition. Following confirmation of the plan, the trustee begins to distribute funds to creditors according to the terms of the plan.

Filing a Chapter13 petition automatically “stays” (stops) most collection actions against
debtors or their property. A Chapter13 case is often used to stop foreclosure proceedings and repay a mortgage delinquency, or to prevent the repossession of a vehicle. As long as the automatic stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or demand payment. However, there are many exceptions to the automatic stay (a criminal proceeding, for example), and in some instances the automatic stay may only be in place for a short period of time.

A Chapter 13 case may be filed without an attorney, but it is a complicated process and it is highly recommended that you retain the services of an attorney. Your failure to meet all of the requirements of a Chapter 13 can result in a loss of protection of the automatic stay, or a dismissal of the case.

2. What do I need to do before filing a Chapter 13 case?
Before filing a Chapter 13 case, you MUST obtain credit counseling from an
approved credit counseling agency. (11 U.S.C. § 109). The debtor must receive credit
counseling within the 180 days before the bankruptcy petition is filed. If you and your spouse file a joint bankruptcy petition, both of you must obtain credit counseling. Credit counseling may be conducted over the phone, over the internet or in person. When you complete credit counseling, the agency will provide you with a credit counseling certificate. This certificate must be filed with the court when the petition is filed.

In addition to the credit counseling certificate, you must also file Exhibit D - Individual
Debtor’s Statement of Compliance with Credit Counseling Requirement. If you and your
spouse filed a joint petition, you must file a separate Exhibit D for each of you. Place a check in the appropriate box indicating one of the following:
• Box 1 states that you received credit counseling within the 180 days before the
filing of the petition and you have the certificate from the agency.
• Box 2 states that you received credit counseling within the 180 days before the
How to File a Chapter 13 Bankruptcy Case - Debtor Assistance Resource Guide
filing of the petition, but you do not have the certificate from the agency.
Limited exceptions to the credit counseling requirement are addressed in Box 3 and Box 4:
• Box 3 is a request for a temporary waiver of the credit counseling requirement. It
states that you requested counseling from an approved agency, but were unable to
obtain services within 5 days of the request and you are filing because of exigent
circumstances. This means that unusual things happened that prevented you from
getting the credit counseling before you filed the petition. You must describe the
circumstances in detail.
• Box 4 states that you are not required to receive credit counseling because of
incapacity or disability (defined in 11 U.S.C. §109(h)(4)) or active military duty
in a military combat zone

Note: Credit Counseling is not the same as the Personal Financial Management
Course (Debtor Education). The Personal Financial Management Course is required
AFTER the petition is filed and must be completed before receiving a discharge. See
question 20 for more information.

3. Am I eligible to file a Chapter 13 case?
Only an individual with regular income who owes noncontingent, liquidated, unsecured
debts (such as credit card debt or medical bills) of less than $336,900, and/or noncontingent, liquidated secured debts (such as mortgages or car loans) of less than $1,010,650, may be a Chapter 13 debtor. Individuals who operate businesses as sole proprietors may be a Chapter 13 debtor. Corporations and partnerships cannot file for relief under Chapter 13.

4. Where should I file my petition?
The petition and all documents relating to the bankruptcy case must be filed at the
Bankruptcy Court Clerk's Office located in the geographic area (commonly referred to as
“vicinage”) in which the debtor resides. The Bankruptcy Court for the District of New Jersey is divided by county into three vicinages: D.N.J. LBR 1073-1

The Camden vicinage consists of Atlantic, part of Burlington (the townships of
Cinnaminson, Delran, Edgewater Park, Evesham [Marlton], Maple Shade, Moorestown, Mt.
Laurel, Palmyra, Riverside and Riverton), Camden, Cape May, Cumberland, Gloucester and
Salem counties.

The Newark vicinage consists of Bergen, Essex, Hudson, Morris, Passaic, Sussex, and
Union counties.

The Trenton vicinage consists of part of Burlington (excluded are the townships of
Cinnaminson, Delran, Edgewater Park, Evesham [Marlton], Maple Shade, Moorestown, Mt.
Laurel, Palmyra, Riverside and Riverton), Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset and Warren counties.

5. What filing fee do I have to pay?
The filing fee for a Chapter 13 petition is $274. The court does not accept cash or
personal checks. The fee may be paid by money order, certified check, or bank check payable to the Clerk, United States Bankruptcy Court, or debit card.

If the full filing fee cannot be paid at the time the petition is filed, Chapter 13 debtors
may apply for an installment schedule by filing Form 3A Application to Pay Filing Fee in
Installments. Debtors can make up to four installment payments. The final installment must be made within 120 days after the petition is filed. If the debtor fails to pay any installment when due, the case may be dismissed and the debtor will not receive a discharge of debts.

11. What happens after I file for bankruptcy?
Shortly after the petition is filed, a Chapter 13 trustee is appointed and the court will
issue a Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors & Deadlines. This notice is sent to all creditors in the case and contains the following information:
• Debtor’s name and address
• Date/time/location of the First Meeting of Creditors (also known as 341 Meeting)
• Deadline for creditors to file a proof of claim, if it appears there will be assets that
can be liquidated to pay creditors.
• Deadline to file a complaint objecting to discharge or dischargeability of debts
• Deadline to object to the property you claimed as exempt

Note: Please read the notice carefully. The meeting may not be held in the
courthouse, but may be held at another location.

12. What is the role of the trustee in my case?
The trustee is appointed by the United States Trustee to administer the case. The primary functions of the trustee are to examine your Chapter13 plan, make recommendations regarding confirmation of the plan, receive and account for your payments made through the plan and serve as the disbursing agent to the creditors.

13. What is the First Meeting of Creditors, and how do I prepare for the meeting?
All debtors MUST attend the First Meeting of Creditors. Failure to attend may result in
the dismissal of your case. If you and your spouse filed a joint petition, both of you must appear.

At the meeting, the Chapter 13 trustee will ask you questions, under oath, about what you owe, what you own, your income, and your Chapter 13 Plan.

15. After I file, what happens to my creditors’ collection activities against me?
Once the petition is filed with the court, the automatic stay will go into effect. The
automatic stay is an injunction that automatically stops lawsuits, foreclosure, garnishments and all collection activity against you by your creditors for any debt which arose before the filing of the bankruptcy.

Some exceptions, but not all, are listed below:
• Debtor had a previous case pending within the preceding one-year period, but the
case was dismissed. In this situation, the automatic stay would terminate on the
30th day after filing the new case, unless the debtor applies for an extension of the
automatic stay.
• Debtor had more than one previous case pending within the preceding one- year
period, but the cases were dismissed. In this situation, the automatic stay does not
go into effect unless the debtor applies for imposition of the stay.

A creditor may file a Motion to Lift the Automatic Stay, which is a request by a creditor
that, if granted, would allow the creditor to collect a debt against a debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.

17. What are my responsibilities while my Chapter 13 case is open?
• You must continue to pay all of your regular bills as they come due, including
your monthly mortgage payment or rent.
• You must make monthly payments to the Chapter 13 Trustee according to your
Chapter 13 plan.
• If you intend to sell any assets (including your home or car) while your Chapter13
case is open, you must get court approval to do so by filing a motion with the
court. Click here for our local rule on motions DNJ LBR 9013-1
• If you plan to use a real estate broker, you must get court approval first. Click
here for an Application For Retention of Professional
• If you intend to refinance existing debt (including your mortgage) or incur new
debt, you must obtain court approval to do so by filing a motion.

18. When do creditors file claims against me?
To participate in distributions from the bankruptcy estate, creditors must file their claims
with the court within 90 days after the first date set for the First Meeting of Creditors.
Governmental units have 180 days from the date the petition is filed to file a proof of claim.

19. What is a discharge and how do I receive my discharge?
A discharge releases a debtor from personal liability for certain debtsknown as
dischargeable debts and prevents the creditors owed those debts from taking any action against you or your property to collect the debts. The discharge also prohibits creditors from communicating with you regarding the debt, including telephone calls, letters, and personal contact.

When all plan payments have been made, a Chapter 13 debtor is eligible for a discharge,
as long as you:
• certify (if applicable) that all domestic support obligations have been paid. Click
here for a definition of domestic support obligations
• have not received a discharge in a Chapter 7, 11 or 12 case during the four years
preceding the new case
• have completed the Personal Financial Management course (Debtor Education).
Click here for Official Form 23 - Debtor’s Certification of Completion of
Instructional Course Concerning Personal Financial Management Course.
Creditors provided for in the Chapter13 plan may no longer initiate or continue any
action against you to collect debts that have been discharged. However, there are exceptions to the discharge which include:
• debts for alimony and child support
• most student loans
• debts arising from death or personal injury caused by driving while intoxicated or
under the influence of drugs
• debts for criminal fines or restitution.

NOTE: Once a debt is discharged, you are legally free of that debt. The discharge
is a permanent order that prohibits creditors from taking any type of collection action on
discharged debts. Any attempt to collect discharged debt is prohibited by bankruptcy law.

For your own protection, you should maintain accurate records and copies of all matters
related to your bankruptcy. In addition, you should routinely check your credit report
with the various reporting agencies to ensure that discharged debts are not being reported
as outstanding.

20. What is the Personal Financial Management Course (Debtor Education) ?
Debtors are required to complete an instructional course in personal financial
management as a condition for receiving a discharge. This course is in addition to the credit counseling requirement. When the personal financial management course is completed, the debtor must file Official Form 23 - Debtor’s Certification of Completion of Instructional Course Concerning Personal Financial Management. If you and your spouse filed a joint petition, both of you must attend the course and both of you must file an Official Form 23. Official Form 23 should NOT be filed when you file the petition. It must be filed no later than the last payment made by the debtor as required by the Chapter13 plan. If Official Form 23 is not filed, the court may close the case without a discharge. If you then file a motion to reopen the case to allow the filing of Official Form 23, you must pay the full filing fee due for filing such a motion.

There are limited exceptions to the personal financial management course requirement
such as incapacity or disability (defined in 11 U.S.C. §109(h)) or active military duty in a
military combat zone. If you believe that an exception is applicable to you, you must make the appropriate selection on Official Form 23 and file a Request for Exemption from Financial Management .

21. Where can I find additional information about Chapter 13?
Additional information regarding Chapter13 may be found on the web sites maintained
by each of the Chapter 13 Trustees. The contact information and links to the Chapter13 Trustee for each vicinage are listed below:

CAMDEN NEWARK TRENTON

Isabel C. Balboa
Chapter 13 Standing Trustee
535 Route 38, Suite 580
Cherry Hill, NJ 08002
856-663-5002

Marie-Ann Greenberg
Chapter 13 Standing Trustee
30 Two Bridges Road
Suite 230
Fairfield, NJ 07004
973-227-2840

Albert Russo
Chapter 13 Standing Trustee
1 AAA Drive, Suite 101
Robbinsville, NJ 08691
609-587-6888

The District of New Jersey has local rules of practice. Individuals representing
themselves are responsible for complying with all the requirements. The local rules can be
purchased at the court or viewed on line at www. njb.uscourts.gov.

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