Chapter 25 - § 25.6 • DEALING WITH THE CHAPTER 13 DEBTOR AND CHAPTER 13 TRUSTEE

• Jurisdiction: Colorado

§ 25.6 • DEALING WITH THE CHAPTER 13 DEBTOR AND CHAPTER 13 TRUSTEE

§ 25.6.1—The Debtor and the Plan

The Chapter 13 debtor is required to pay all of his or her disposable income to the Chapter 13 trustee for a period of three to five years. 11 U.S.C. §§ 1322 and 1325. The Chapter 13 plan must provide for full payment of priority claims, e.g., taxes and past-due domestic support obligations, unless the holder of such claims agrees otherwise. A Chapter 13 plan must provide for current payment of secured obligations, plus "catch-up" on arrears, or the collateral must be surrendered. Id. The debtor can extend arrears on domestic support obligations owed to governmental agencies beyond the term of the plan if he or she is unable to fund a full payment within five years. 11 U.S.C. § 1322(a)(4).

The Chapter 13 plan, upon confirmation, becomes an order binding the debtor and all scheduled creditors. 11 U.S.C. § 1327(a).¹³ Accordingly, upon receiving notice of a Chapter 13 bankruptcy filing, it is important for creditors' counsel to do the following:

1) Immediately obtain copies of the bankruptcy petition, schedules, statement of financial affairs and latest proposed Chapter 13 plan filed by the debtor. (Chapter 13 plans are often amended one or more times before being confirmed. Always ensure you are reviewing the most recent proposed plan by reviewing the case docket online.) All bankruptcy court records are available to the public for a nominal fee (presently $0.10 per page, and available in Colorado bankruptcy court cases from https://ecf.cob.uscourts.gov after signing up for a PACER account at www.pacer.gov). If there is a currently pending dissolution action, that action should be disclosed as pending litigation in the statement of financial affairs. All debts owed to the client should be scheduled on the appropriate schedules (Schedule D for secured claims, Schedule E for priority claims such as support obligations, and Schedule F for other unsecured obligations). If the client is a creditor and is not scheduled, is improperly scheduled, or is inadequately provided for in the proposed plan, counsel may want to notify the debtor's counsel and the trustee. If the discrepancy is material, an objection to confirmation of the Chapter 13 plan must be filed by the deadline set forth in the notice accompanying the proposed plan. If no objection is filed, the Chapter 13 plan will be binding on creditors even if it fails to adequately provide for creditors' claims.
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