HOW TO FILL OUT FORM 13A - 13law.com

1 HOW TO fill OUT form 13A, THE form CHAPTER 13 PLAN. General Order 02-02 Chapter 13 Procedures paragraph 1 requires that Chapter 13 Plans shall be in substantial conformity with Chapter 13 form 13A for all Chapter 13. cases filed on and after January 2, 2002. Chapter 13 Plans and Amended Plans are governed by Local Rule 9013-1 and are treated as a Motion under that rule. No Motion to Confirm is required. A copy of the required standard Chapter 13 Plan (hereafter referred to as form 13A ) is attached as an exhibit to the General Order 02-02. For debtors' Counsel's use, a PDF fillable copy of the standard Plan appears on the Chapter 13 Trustee's website, under the sections Debtor Information and What's New. Counsel can simply click on the standard Chapter 13 Plan and download it to a hard drive or a diskette and begin filling out the blanks on the computer.

2 Most of the provisions are self-explanatory and are easily understood. Here are some of the questions that have arisen and have been called to the Trustee's attention. The answers are strictly the opinions of Kathleen Laughlin, Chapter 13 Trustee. No judicial interpretations have been made nor should any be assumed. 1. Question: Does my plan have to be exactly formatted as form 13A? Answer: No, the trustee's office will not object just because debtor's counsel has retyped the plan in Word, Word Perfect, or Excel formatting. General Order 02-02 requires substantial conformity not mirror image conformity.. 2. Question: Can I include additional provisions in my plan? Answer: Yes, the Chapter 13 Trustee's Office will not object to artfully drafted, conceptually clear, and legally sufficient additional provisions.

3 However, long, rambling, superfluous additions which confuse the issues and subvert the substantial conformity requirement of form 13A may be expected to draw fire.. 3. Question: Can I use form 13A for both original and amended plans? Answer: The General Order 02-02 provides that form 13A is to be used for original and amended plans. However, debtor's counsel will need to modify the caption of the document and properly refer to the document as a First Amended Plan, etc. 4. Question: How do I complete the Treatment of Secured Creditors provisions under the standard Chapter 13 Plan, form 13A? form 13A, the standard Chapter 13 Plan adopted in the Bankruptcy Court for the District of Nebraska contains a number of blanks, which can either be filled in or left open. The intent in drafting those provisions were (1).

4 4/22/2002. page 1 of 6. HOW TO fill OUT form 13A, THE form CHAPTER 13 PLAN. to assist the debtor's counsel in complying with Bankruptcy Code statutory requirements; (2) to help the debtor's counsel provide for sufficiently funded plans; and (3) to give a clear indication to secured creditors of their treatment and payment terms under the Chapter 13 plan and through the Chapter 13. Trustee's Office. Pursuant to 11 506, a creditor is allowed a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property. The portion of any claim which is not secured by property of the estate is an unsecured claim in the bankruptcy proceeding. Refer to the Secured Claims / Other Secured Creditors sections of form 13A. First, debtor's counsel should provide the following information: Name of the creditor Description of the security held by the creditor Value the debtors places on the security On the Value: $_____ line, the debtor's attorney should estimate the value of the collateral which is to be paid through the Chapter 13 bankruptcy.

5 A value figure appears in the plan to provide an estimate of the dollar amount which will be necessary to be paid under the plan to satisfy the secured claim. If the amount of the debt is less than the debtor's estimate of value of the secured creditor's collateral, debtor's counsel should simply list as the value the amount of the creditor's claim. This way the debtor's attorney can compute whether the plan is sufficiently funded to cover all of the secured claims. The final valuation for the collateral will not be determined until the claims process is completed. In the U. S. Bankruptcy Court for the District of Nebraska, the claim controls the valuation of the collateral absent a successful objection by the debtor's attorney and a Court Order determination different from the claim filed by the creditor.

6 form 13A also provides various blanks to be completed in order to provide exact provisions for the computation of interest on the secured claim. Pre-Confirmation Interest. Pursuant to 11 506(b), a secured creditor is entitled to pre-confirmation interest (interest 4/22/2002. Page 2 of 6. HOW TO fill OUT form 13A, THE form CHAPTER 13 PLAN. between petition date and confirmation date) to the extent that an allowed secured claim is secured by property the value of which, **. is greater than the amount of such claim **. When a secured creditor is over-secured, section 506(b) specifies that the secured creditor should receive pre-confirmation interest to the extent that they are over-secured. Emphasis must be given to the portion of the statute indicating to the extent.. If the secured creditor is over-secured, the secured creditor are entitled to pre-confirmation interest but only to the extent that the creditor is over-secured.

7 For example, assume that a creditor held a $6,000 lien on an automobile for which the creditor is owed only $5,900. This creditor could be described as an over-secured creditor. As an over-secured creditor, this creditor is entitled to be paid pre-confirmation interest. However, section 506(b) would limit the amount of pre-confirmation interest to $100 (the difference between the value of the property and the amount owed). form 13A requests the debtor's attorney to specify both the interest rate to be paid on pre-confirmation interest and a dollar limit on pre-confirmation interest (if any). Case law has established that pursuant to 11 506(b). over-secured creditors are entitled to contract rate of interest from petition date to confirmation date. If the debtor's attorney is proposing that the creditor receive pre- confirmation interest, form 13A requires that the amount of such interest, , the rate of such interest, be specified.

8 If the blank for pre-confirmation interest rate is left blank, the Chapter 13 Trustee's staff will not pay pre-confirmation interest. If the blank for pre-confirmation interest rate is specified and completed in a certain percentage, then the Chapter 13 Trustee staff will also check to see whether a dollar limit has been placed on the amount of pre-confirmation interest to be paid. If a dollar limit is specified, the Chapter 13 Trustee staff will limit the pre-confirmation interest to the amount set forth in the plan. 4/22/2002. Page 3 of 6. HOW TO fill OUT form 13A, THE form CHAPTER 13 PLAN. Post-Confirmation Interest. form 13A also provides for debtor's counsel to specify the post-confirmation interest rate to be paid. Case law has established that secured creditors are entitled to post-confirmation interest at market rate.

9 The interest to be paid under 11 1325(a)(5)(B)(ii) is actually the discount rate which must be applied to the secured claim in order for the creditor to receive the present value of their claim. If the post-confirmation interest rate is specified, the Chapter 13. Trustee staff will pay that amount. If the post-confirmation interest rate blank is not completed, the Chapter 13 Trustee staff will not pay any post-confirmation interest on the claim. form 13A also contains a final blank to be completed for the Total Amount for each secured claim. This blank should contain the sum of the estimated value of the collateral or the amount owed to the secured creditor, whichever is less, plus the dollar amounts of both pre-confirmation interest and post-confirmation interest as proposed in the plan.

10 This Total Amount figure facilitates the debtor's attorney being able to calculate more accurately sufficient funding of the plan. Debtor's counsel will need to consider and estimate when confirmation will likely occur in order to determine the number of months for which pre-confirmation interest should be computed versus the subsequent number of months for which post-confirmation interest should be computed. A projection of two to three months of pre-confirmation interest may be a reasonable estimate for relatively simple cases. A projection of five to seven months of pre-confirmation interest may be a reasonable estimate for complex, heavily litigated cases. One of the most frequent Trustee's reasons for objecting to confirmation has always been insufficient funding of plans. Some debtor's counsel do not calculate interest on secured 4/22/2002.