Case Closure at Trustee’s Office
After receiving all required payments under the plan (including any tax refunds owed) and completing an audit to determine that all amounts owed were received, the Chapter 13 Trustee will file a Certificate of Final Payment with the Bankruptcy Court. The Certificate of Final Payment tells the Court that the debtor has completed all the necessary payments under the plan. A copy will be mailed to the debtor and debtor’s attorney as well. DO NOT STOP MAKING YOUR PLAN PAYMENTS UNTIL THE TRUSTEE’S OFFICE HAS FILED A CERTIFICATE OF FINAL PAYMENT. If the Trustee was making your ongoing, long-term payments on your behalf — such as child support payments, mortgage payments or student loan payments — then you must restart your payments directly to these creditors. Do not wait for a payment book or a reminder from these creditors to start making payments. If you have questions, please contact your attorney.
Upon closing the case, the Chapter 13 Trustee will request that the Bankruptcy Court vacate the Wage Order, if one was issued. When the Court vacates the Wage Order, it is directing the debtor’s employer to stop deducting the plan payment from the debtor’s wages. The debtor and debtor’s attorney will also get a copy of this vacating order. If the debtor’s employer continues to deduct plan payments from the debtor’s wages after this vacating order is issued, then the debtor should provide his or her employer with a copy of the vacating order and/or contact his or her attorney.
If you are due a refund in your case, any refund will usually be issued mid-month following the completion of the case. Therefore, it is important that you keep your address current with your attorney and the Bankruptcy Court so that you can receive important documents and any refund at the completion of your case.
Final Report and Discharge
Usually within 150 days of the Certificate of Final Payment, the Trustee will also file a Final Report. This report summarizes the financial activity in a case over the life of the plan. Final Reports in completed and dismissed cases are generated by the Trustee during month-end processing after all checks associated with the case have cleared the Trustee’s bank account.
If an eligible debtor has complied with terms of the plan and all other legal requirements, the Bankruptcy Judge will enter an Order of Discharge upon the completion of the plan. The Trustee’s Office does not issue Discharge Orders. Please note that some debtors are not eligible for discharge.
Where applicable, creditors should send the paid-in-full papers, including lien releases, to the debtor once the Discharge Order is entered. The Trustee’s Office does not receive, collect or keep these types of documents. If the creditor fails to do this, please contact your attorney. If you receive a request for additional money from creditors, please contact your attorney immediately.
The Trustee provides online access to your case information at www.trustee13.com. To learn about how to access this information, click here. The information provided through this service cannot be used to calculate a payoff of your case or the remaining amount owed under the plan. Rather, you will see an accounting of all receipts into your case as well as all disbursements made to creditors. The Chapter 13 Program is a complex legal proceeding which requires analysis of law and facts to determine when a plan is ready to complete. The online case information is not programmed to provide you with that information.
Sometimes, a debtor will have a change in circumstances during a plan and decide to pay off the case early. For instance, the debtor may receive an inheritance, settlement on a lawsuit, or decide to sell or refinance a house. When contemplating these decisions, the debtor should contact his or her bankruptcy attorney immediately. Often, additional pleadings are required before the Bankruptcy Court, and Court approval must usually be obtained before any action can be taken. If the debtor believes he or she may be in a position to pay off the case early, then the debtor’s attorney can submit a Plan Payoff Request which requires information regarding the status of the funds and status of any required bankruptcy approval. To complete the request, both the debtor and debtor’s attorney will need to complete and sign the Plan Payoff Request. Discuss the matter with your attorney prior to taking any actions to liquidate property or incur debt so that appropriate approval from the Bankruptcy Court may be obtained.
Remember, any information regarding the status of a case or claim is subject to court approval and is not legally binding. However, when the Trustee provides a Plan Payoff, the calculated figure is based on the information known at the time and is only valid through a specified date. A Plan Payoff is specific as of a certain date, and it is not the same as the total amount of funds the debtor will pay under the plan (or “Balance Due”). There are many factors which create a difference between the Plan Payoff and the Balance Due under the plan, such as:
• Additional interest on claims due to passage of time;
• Additional required mortgage payments due to passage of time;
• Mortgage payment increases due to escrow items, like homeowner’s insurance and/or property tax increases;
• Post-petition fees and expenses on mortgage claims;
• Allowable post-petition claims to be paid pursuant to the confirmed plan;
• Amended claims or allowed deficiency claims;
• Supplemental attorney fee requests or hourly billing;
• Tax refunds due as additional payments under the plan; and
• Funds from a sale of property, lawsuit or inheritance that qualifies as additional payments under the plan.
Each debtor’s plan is unique and complex, and the Trustee’s Office does not have the available resources to respond to debtors’ requests for the remaining Balance Due under a plan. If the debtor is concerned about how long his or her plan will run, then the debtor may request a Feasibility Status. To learn more about requesting a Feasibility Status, click here. If you have consulted with your attorney and believe that you can pay off your case early and you have obtained required Bankruptcy Court approval, then the Trustee can provide a Plan Payoff upon receipt of the properly executed form by you and your attorney.