Local Rule 2083-2: PROVISIONS REGARDING USE OF OFFICIAL CHAPTER 13 PLAN FORM (THE "PLAN")

RULE 2083-2 PROVISIONS REGARDING USE OF OFFICIAL CHAPTER 13 PLAN FORM (THE "PLAN")

(a) Allowance of Claims. Except as otherwise specified in Part 3.2 of the Plan, the amount of all allowed claims to be paid through the Plan shall be determined using the applicable provisions of the Bankruptcy Code and the Bankruptcy Rules. A proof of claim must be timely filed or specifically allowed by an order of the court to receive any disbursements from the trustee under the Plan.

(b) Trustee's Percentage Fees. The trustee shall collect the statutory fee of 28 U.S.C. § 586(e) for any receipts received or disbursements actually or constructively made by the trustee under the Plan or pursuant to the Bankruptcy Code, the Local Rules, or a court order. The calculation required by Part 4.2 of the Plan should be based on a trustee's statutory fee of 10%, unless otherwise approved by the court.

(c) Disbursements on Secured Claims.

(1) The trustee shall make disbursements on a secured claim only if all the following conditions are met:

(A) The Plan specifically provides that the trustee shall disburse on the secured claim;

(B) The secured claim is allowed under §§ 502(a) and 506(a), meaning a secured proof of claim has been timely filed, or the claim has been allowed by court order; and

(C) There is no pending objection or motion with respect to such proof of claim under Fed. R. Bankr. P. 3007 (objection to claim) or 3012 (motion to value collateral).

(2) All disbursements are subject to the trustee having received from the debtor sufficient payments under the Plan to enable the trustee to make such disbursements.

(3) If a secured creditor obtains relief from the automatic stay and that secured creditor's claim is being paid by the trustee in the Plan, the order granting relief from the automatic stay should include language that the trustee shall make no further distribution on behalf of the secured claim. The order should also state that the creditor shall have 180 days from entry of the order granting relief from the automatic stay to file an unsecured deficiency claim or such creditor's claim will be deemed to be paid in full for purposes of the Plan, unless otherwise ordered by the court.

(d) Interest Accrual and Interest Rate on Secured Claims. Interest shall begin to accrue from the entry of the order confirming the Plan; however, interest may begin to accrue on an oversecured claim as of the petition date, if so designated in Part 8.1 of the Plan.

(1) If no interest rate is designated for a claim listed in Part 3.2 or Part 3.3 of the Plan, interest shall accrue at the rate set forth on line 9 of the filed proof of claim. If the proof of claim does not specify an interest rate, then interest shall accrue at 6% per annum on claims listed in Part 3.2 and Part 3.3.

(2) If no interest rate is stated for a claim listed in Part 3.1 of the Plan, then no interest shall be paid by the trustee on such claim.

(3) Any modification of interest rates stated in the Plan shall apply only to claims on which the trustee makes disbursement. The contractual interest rate and the current installment payment portion of any claim listed in Part 3.1 of the Plan which the debtor pays directly shall remain unaltered.

(e) Order of Distribution.

(1) The trustee shall first collect the trustee's statutory percentage fee pursuant to 28 U.S.C. § 586(e) upon receipt of any payment made by the debtor or on the debtor's behalf. The trustee shall pay allowed clams in the following order: Class 1: Adequate Protection Payments pursuant to Local Rule 2083-1(d), Equal Monthly Plan Payments to secured creditors as stated in Part 3 of the Plan, or accrued interest, if greater than the Adequate Protection Payment or Equal Monthly Plan Payment. Class 2: Attorney's fees as provided for in Part 4.3 of the Plan until paid in full. Class 3: Priority Domestic Support Obligations under § 507(a)(1) until paid in full. Class 4: Other administrative expenses allowed under § 507(a)(2) until paid in full. Class 5: Other secured claims paid to be paid by the trustee for which the Plan does not provide Adequate Protection Payments or Equal Monthly Plan Payments. Class 6: Other priority claims until paid in full. Class 7: Nonpriority unsecured claims as provided in Part 5 of the Plan.

(2) If the Plan specifies Adequate Protection Payments or Equal Monthly Plan Payments (Class 1) to be paid to the holder of a secured claim, all accrued Class 1 monthly payments must be current through the date of distribution before the trustee may disburse to a junior class. However, Class 1 claims need not be paid in full prior to a junior class receiving distributions.

(3) After payment of allowed attorney's fees (Class 2), the trustee may, but is not required to, disburse to holders of Class 1 claims amounts greater than the stated monthly payment amount to facilitate the prompt administration of the case.

(4) If the trustee has not received sufficient funds to pay the full monthly amount of the stated Adequate Protection Payments or Equal Monthly Plan Payments in Class 1, the trustee may make a pro rata distribution to each holder of a claim in Class 1. Adequate Protection Payments will be brought current before disbursements are made on Equal Monthly Plan Payments, and unpaid portions of Adequate Protection Payments or Equal Monthly Plan Payments from prior months will first be brought current before disbursements are made to a junior Class.

(5) If the Plan does not provide for an Equal Monthly Plan Payment on a claim, the trustee shall distribute pro rata payments to the holder of such claim within the designated Class.

(f) Part 1.3 – Required Nonstandard Plan Provisions.

(1) Adequate Protection Payments. If the debtor seeks to pay Adequate Protection Payments to holders of secured claims, the requirements of Local Rule 2083-1(d) apply.

(2) Applicable Commitment Period. The applicable commitment period for the Plan shall be stated in Part 8.1 of the Plan as a nonstandard provision. The debtor must include a statement indicating if the applicable commitment period of the Plan is 36 or 60 months, as determined by § 1325(b). The number of months listed in Part 2.1 for which the debtor will make regular payments is an estimate only; the applicable commitment period stated in Part 8.1 dictates the term of the Plan. Any below median case may be extended as necessary not to exceed 60 months to complete the Plan payments.

(3) Direct Payment of Claims. If the debtor elects to pay a claim directly and that claim is not one which the Plan allows to be paid directly, the direct payment designation must be made in Part 8.1 of the Plan as a nonstandard provision. For all claims the debtor elects to pay directly, Local Rule 2083-2(i)(4) applies.

(4) Third-Party Payment of Claims. If the Plan provides that a nondebtor shall pay a claim directly, the third-party payment designation must be made in Part 8.1 of the Plan as a nonstandard provision. For all claims the Plan provides will be paid by a third-party, Local Rule 2083-2(k)(1) may apply. Upon request, the debtor must furnish the name and contact information for the third-party payor.

(5) Lien Avoidance Under § 522(f). If the debtor moves to avoid a lien under § 522(f), Local Rule 2083-2(j) applies.

(6) Interest on Oversecured Claims. If the debtor proposes to pay an oversecured claim a nonstandard rate of interest or interest accruing prior to confirmation of the Plan, such nonstandard treatment must be specifically stated in Part 8.1 of the Plan, including the identity of the secured creditor and the proposed interest rate accrual.

(7) Local Rules are Incorporated. Each Plan shall include the following required nonstandard provision: "The Local Rules of Practice of the United States Bankruptcy Court for the District of Utah are incorporated by reference in the Plan."

(8) Declaration Regarding Tax Returns. Each plan must include a nonstandard provision that the debtor has filed or will file within the time period stated in § 1308(b)(1) tax returns for all taxable periods ending during the four-year period before the filing of the petition.

(g) Part 3.1: Maintenance of post-petition payments and cure of default, if any.

(1) The trustee shall make disbursements on allowed arrearage claims listed in Part 3.1 of the Plan. The trustee will pay the amount of the arrearage stated in the proof of claim, unless modified by an amended claim or court order. If the column designated as "Monthly plan payment on arrearage" is left blank or is "zero," the trustee will make pro rata disbursements on that arrearage claim.

(2) Unless otherwise ordered by the court, the debtor shall maintain current contractual installment payments directly to the creditors listed in Part 3.1 of the Plan in accordance with the terms of the contract, beginning with the first payment due after the petition date.

(3) The debtor may not modify the contractual rate of interest or monthly payment amount listed in Part 3.1 of the Plan. Any interest rate stated in Part 3.1 of the Plan applies only to the pre-petition arrearages being paid by the trustee.

(4) Current contractual installment payments due from the debtor may change due to an adjustable rate note, escrow requirements, etc. Notices of such payment changes shall be filed and served on the debtor in compliance with Fed. R. Bankr. P. 3002.1(b).

(h) Part 3.2: Request for valuation of security, payment of fully secured claims and modification of undersecured claims.

(1) The Plan must designate with the check box in Part 1.1 that Part 3.2 is being utilized.

(2) Each creditor listed in Part 3.2 must be served with the Plan in compliance with Fed. R. Bankr. P. 3012(b) and such service must be evidenced by a separately filed certificate of service. Any Plan amendment or modification negatively affecting a creditor listed in Part 3.2 must similarly be served on such creditor in compliance with Fed. R. Bankr. P. 3012(b) and such service must be evidenced by a separately filed certificate of service.

(3) If the debtor is seeking to value an allegedly wholly unsecured consensual lien against the debtor's real property, and unless otherwise permitted by the Court, a separate motion or adversary proceeding must be filed prior to the first date fixed for a hearing on confirmation of the Plan. The debtor must comply with all applicable notice, service, and evidentiary requirements to obtain such relief. A separate order must be filed by the debtor if the relief is granted.

(4) Unless an objection is filed to confirmation of the Plan, the Court will fix the value of the collateral consistent with the debtor's proffer of value in the Plan without further notice or hearing. A nongovernmental entity's filing of a proof of claim asserting a collateral value higher than the debtor's proffered value does not constitute an objection to confirmation. The allowed secured claim of such nongovernmental creditor shall be paid the lowest amount of the following: (a) the largest amount listed in either the "Value of Collateral" or "Amount of Secured Claim" columns listed in Part 3.2 of the plan, or (b) the secured amount asserted by the creditor in the allowed proof of claim, including any subsequent amendments or modifications; provided, however, that if any order of the Court fixes the value of the allowed secured claim, that amount shall be the "Value of Collateral" and the amount of the allowed secured claim to be treated under the plan.

(5) Allowed secured claims filed by a governmental unit shall be paid the secured amount set forth on the proof of claim rather than the debtor's proffer of value in the Plan. The debtor must comply with Fed. R. Bankr. P. 3012(c) to establish a lesser secured amount of a governmental unit's claim.

(6) The separately filed certificate of service identified in subparagraph (2) of this subsection is not applicable to any governmental entity creditor or to a creditor which (i) previously withdrew an objection to confirmation based on the debtor's resolution of the objection or (ii) endorsed an order approving the plan treatment. If there is modification of the plan which impacts a creditor after that creditor withdraws its objection to confirmation or after it endorses an order approving its plan treatment, the requirement to file a separate certificate of service identified in subparagraph (2) shall apply.

(i) Part 3.3: Secured claims excluded from 11 U.S.C. § 506.

(1) The secured claim of each creditor in Part 3.3 of the Plan which will be paid as a secured claim by the trustee shall be the secured amount listed in the allowed proof of claim, unless (a) modified by an amended claim, (b) modified by court order, or (c) such claim is secured by collateral of a type and subject to the time periods described in the "hanging paragraph" of 11 U.S.C. § 1325(a)(9), in which case the full amount of the claim will be treated as a secured claim and will be paid by the trustee accordingly.

(2) The debtor may modify the interest rate and monthly payment amount for any secured claim listed in Part 3.3 of the Plan on which the trustee disburses payments.

(3) If the debtor elects to directly pay a claim listed in Part 3.3 of the Plan, the contractual interest rate and monthly payment amount cannot be modified.

(4) If the debtor elects to pay directly a claim listed in Part 3.3 of the Plan, the following conditions apply: (A) the debtor will pay the claim without any modifications to the terms of the contract; (B) upon entry of the Order Confirming the Plan, the automatic stay of § 362 and the co-debtor stay of § 1301 are terminated as to such collateral and the co-debtor's obligation; (C) the claim will not be discharged; and (D) neither the court nor the trustee will monitor the debtor's performance on direct payments to the creditor.

(j) Part 3.4: Lien avoidance under 11 U.S.C. § 522(f).

(1) The Plan must designate in the check box in Part 1.2 that Part 3.4 is being utilized. The Plan must also designate in the check box in Part 1.3 that the Plan contains a nonstandard provision in Part 8.1, which nonstandard provision shall state that the affected creditor will retain its lien until one of the conditions set forth in subparagraph (3) below is satisfied.

(2) Each creditor listed in Part 3.4 of the Plan must be served with the Plan in compliance with Fed. R. Bankr. P. 4003(d) and such service must be evidenced by a separately filed certificate of service. Any Plan amendment adding a creditor in Part 3.4 must similarly be served in compliance with Fed. R. Bankr. P. 4003(d) and such service shall be evidenced by a separately filed certificate of service.

(3) Any creditor listed in Part 3.4 of the Plan shall retain its lien securing such claim until the earlier of (A) payment of the underlying debt determined under nonbankruptcy law, (B) discharge of the underlying debt under § 1328 or completion of the plan, at which time the lien will terminate and be released by the creditor, or (C) entry of an order granting a separate motion filed by the debtor seeking release of the lien for cause under § 349(b).

(4) For each creditor listed in Part 3.4 of the Plan, the debtor must complete and attach to the Plan Local Form 2083-2 (Form for Lien Avoidance Worksheet), specifically identifying the holders and amounts of liens senior to the lien(s) intended to be avoided.

(5) For any claim listed in Part 3.4 of the Plan, subparagraphs (4) and (5) of Local Rule 2083-2(h) apply.

(6) Nothing in this Rule prevents the debtor from seeking to avoid a lien under § 522(f) by separate motion.

(k) Part 3.5: Surrender of collateral.

(1) Upon entry of the order confirming the Plan, the automatic stay under § 362 and the codebtor stay under § 1301 are terminated as to both the collateral and the co-debtor obligation. The debtor shall immediately make the collateral being surrendered available to the secured creditor.

(2) Creditors listed in Part 3.5 of the Plan shall have 180 days from entry of the confirmation order to file an amended claim for an unsecured deficiency or such creditor's claim will be deemed paid in full.

(l) Part 4: Treatment of Fees and Priority Claims.

(1) Unless otherwise ordered by the court, if the Plan provides for interest on nonpriority unsecured claims, such interest shall also be paid on priority claims, other than an award of fees under § 507(a)(2).

(2) The calculation required by Part 4.2 of the Plan shall be based on a trustee's statutory fee of 10%, unless otherwise ordered by the court.

(3) The "balance of fees owed to the attorney for the debtor" referred to in Part 4.3 of the Plan shall be determined by subtracting any retainer received by debtor's attorney from the allowed chapter 13 presumptive fee established by the court's "Policies and Procedures" or other orders of the court. The total award of attorney's fees may not exceed the applicable presumptive fee absent compliance with notice and hearing requirements of the Bankruptcy Code, Bankruptcy Rules, and Local Rules. The presumptive fee shall provide compensation for legal services through (A) Plan confirmation; (B) the claims review process that does not require an actual contested hearing; (C) certification of the debtor's completion of the postpetition instructional course concerning personal financial management; and (D) the final certification of readiness for discharge.

(4) Unless otherwise ordered by the court, if the debtor utilizes Part 4.5 of the Plan to pay a domestic support obligation owed to governmental unit in an amount less than the full amount, the creditor must affirmatively accept or endorse the treatment under the Plan. The Plan shall be served on such governmental unit in compliance with Fed. R. Bankr. P. 3012(b) and such service shall be evidenced by a separately filed certificate of service.

(5) The allowed amount of any priority claim will be the amount stated in the filed proof of claim, unless modified by an amended claim, as determined under Fed. R. Bankr. P. 3012 or by other court order.

(m) Part 5: Treatment of Nonpriority Unsecured Claims.

(1) Unless the Plan proposes 100% payment to all claims, the return to unsecured creditors shall be the greater of the amount specified in Part 5.1 or the pro rata distribution, if any, resulting from the Plan payment in Part 2.1 multiplied by the applicable commitment period, plus tax refunds and other payments designated as lump sum plan contributions.

(2) If the debtor asserts a substantial change in circumstances warranting deviation from the return to unsecured creditors required by § 1325(b)(1)(B), then prior to the confirmation hearing the debtor must file a separate pleading describing such change in circumstances. Such pleading shall be accompanied by evidence of the change in circumstances including, but not limited to, the debtor's affidavit, pay advices or other evidence of income, or a hypothetical Form B 122C-2 indicating what the return, if any, to unsecured creditors would be with the current income.

(3) The trustee or any other party in interest may file a pleading asserting a substantial change in the debtor's circumstances warranting deviation from the return to unsecured creditors required by § 1325(b)(1)(B) if it appears the debtor's ongoing income supports an ability to pay an increased amount to unsecured creditors. Such pleading may be accompanied by evidence of the change in circumstances including, but not limited to, the debtor's pay advices or other evidence of income, the debtor's schedules, or debtor's tax returns.

(4) If the Plan designates unsecured claims to be treated in Part 5.2 (Maintenance of payments and cure of any default on nonpriority unsecured claims) or Part 5.3 (Other separately classified nonpriority unsecured claims), the debtor must establish the basis for such designation under § 1322(b)(1) in a separately filed pleading. Any separate classification of an unsecured debt must comply with all provisions of the Bankruptcy Code and applicable case law.

(n) Part 6: Executory Contracts and Unexpired Leases.

(1) If an unexpired lease or executory contract is not assumed in the confirmed Plan, such lease or contract is deemed rejected as of entry of the order confirming the Plan. If the lease or contract is rejected, the automatic stay of § 362 and codebtor stay of § 1301 are terminated as to the property which is the subject of the lease or contract and as to any co-debtor.

(2) If an unexpired lease or executory contract is assumed, the debtor shall directly make postpetition lease or contract payments to the other party to the lease or contract subject to the following conditions: (A) the debtor will make such payments without any modifications to the terms of the contract or lease; (B) upon entry of the order confirming the Plan, the automatic stay of § 362 and the co-debtor stay of § 1301 are terminated as to the indebtedness and as to any co-debtors; (C) claims arising under the contract or lease will not be discharged; and (D) neither the court nor the trustee will monitor the debtor's performance on direct payments to such creditors.

(3) If the debtor owes arrearages on an unexpired lease or executory contract and provides for payment of such arrearages by the trustee in the Plan, then the debtor must establish that payment of the arrearages is reasonable and necessary for the maintenance and support of the debtor or the debtor's dependents. The Plan must provide for such arrearages in Part 5.3 and designate the treatment of the lease or contract in Part 6.1. The arrearages claim will be the amount in the allowed proof of claim, unless modified by an amended claim or order of the court.