Local Rule RULE 4002-1: Duties of Debtor and Trustee

RULE 4002-1 Duties of Debtor and Trustee In addition to the duties prescribed by the Bankruptcy Code and the FRBP, the trustee and debtor must do the following:

A. Duties of Chapter 13 Debtor 1. The debtor must provide all tax refunds to the trustee within seven (7) days of receipt. The debtor must move the court for use of the funds within twenty-one (21) days of receipt of the funds by the chapter 13 trustee if the debtor wishes to receive any portion of the tax refund.

2. When a claim is bifurcated (partially secured and partially unsecured), the amount that is secured and the amount of the claim that is unsecured must be listed separately in the schedules and plan.

3. Debtor must report any change of income to the trustee.

4. Debtor must serve the plan on any adversely affected parties when the plan or amendment or modification is filed. If the amendment or modification is material, at least twenty eight (28) days notice must be given.

5. The Cerk will notice a date and time for the meeting of creditors pursuant to section 341 within forty-eight (48) hours after the bankruptcy petition is filed. If the plan is not filed with the petition, the debtor must serve a copy of the entire plan on the mailing matrix at least twenty-eight (28) days prior to the confirmation hearing. Notwithstanding the above, the proposed plan must be filed and served on the chapter 13 trustee at least fourteen (14) days prior to the section 341 meeting.

6. The debtor must promptly file with the Clerk written notice of any change of mailing address until the case is closed.

B. Duties of Chapter 13 Trustee 1. The chapter 13 trustee must object to debtor's counsel's compensation if:

a. Services are not properly rendered;

b. Form 2016 does not comply with the General Order governing chapter 13 attorney fees and separate application for employment and compensation has not been made by counsel; or c. Compensation is requested in advance as a condition of future services beyond that allowed by General Order;

2. The chapter 13 trustee must object to confirmation if:

a. The plan does not commit the debtor's entire disposable income as properly calculated by schedules I & J for debtors with current monthly income below defined median income levels provided by Official Form 122C;

b. The plan does not commit the debtor's entire disposable income as properly calculated and adjusted for the terms of the debtor's proposed plan and statement of intention or by Official Form 122B and C for debtors with current monthly income above defined median income levels and, in the trustee's opinion, the discrepancy is not properly explained and documented as a change in circumstance;

c. The plan does not distribute, on behalf of unsecured claimants, an amount equal to or exceeding the present value of the amounts available if the case were to proceed to liquidation;

d. The plan does not commit the debtor's disposable income for the applicable commitment period (thirty-six (36) months for debtors below the median income and sixty (60) months for debtors above the median income debtors);

e. The plan provides for unequal or disparate treatment among creditors of equal rank and priority;

f. The plan does not provide payments in sufficient amount to satisfy allowed secured, administrative or priority claims in full unless the holder agrees to different treatment or in the case of a section 507(a)(1)(B) claim, the debtor has committed sixty (60) months of disposable income under the plan;

g. The plan proposes to pay professionals in an amount not authorized by the court;

h. The plan does not commit sufficient disposable income because unnecessary expenses are included;

i. The plan does not commit, for the satisfaction of allowed claims, all future earnings and property of the debtor during the life of the plan;

j. The plan is not proposed in good faith or is proposed by a means forbidden by law;

k. Debtor has failed to submit pay advices for the six (6) months preceding filing, tax returns for the tax year preceding filing, a certification that tax returns for all years proceeding filing have been filed, or information regarding domestic support obligations;

l. Debtor has not fully disclosed or has failed to deliver information reasonably necessary for trustee to verify debtor's property, income, and expenses, as well as claims against the estate;

m. The plan proposes to release liens of secured claimants prior to payment of the allowed secured claim in full;

n. The debtor has not fully paid amounts accruing post-petition under a domestic support obligation; or o. Debtor has not filed all applicable federal, state, and local tax returns due as of the date of confirmation.

3. The chapter 13 trustee must object to claims if:

a. The claim has been filed after the last date for filing timely claims set by the court;

b. The claim is defective on its face (i.e. not owed by the debtor), prescribed, or the amounts claimed are not due as a result of prior payment by the trustee in a preceding case; or c. The claimant asserts secured, priority, or administrative status and is not entitled to the classification claimed.

4. The trustee must verify, to the extent reasonable, all property of the estate; debtor's income and expenses; and secured, priority, and administrative claims against the estate.

5. The trustee shall administer for the benefit of claimants: a) all property not otherwise vested in debtor at the time of confirmation; b) acquired thereafter; c) the proceeds of causes of action pending at confirmation; or d) the proceeds of property refinanced or sold after filing unless the present value of payments under the plan equal or exceed the liquidated value of all property existing at the time of confirmation or acquired thereafter and available for distribution to unsecured claimants.

C. Duties of Chapter 11 Debtor-in-Possession In addition to those duties contained in an order of this court, the Bankruptcy Code or FRBP:

1. Budget a. Within seven (7) days of the filing of the petition for relief, individual chapter 11 debtors must provide a proposed budget reflecting monthly income and expenses to the United States Trustee. The United States Trustee must file into the record a notice of approval attaching the debtor's budget within thirty (30) days of the petition date. If agreement cannot be reached, the debtor must request approval of a budget by motion filed within thirty-seven (37) days of the petition for relief. See Local Rule 2002-1(A)(2)(c).

b. The motion for approval will be heard on an expedited basis. Debtor must call chambers for a hearing date. At a minimum, notice must be served on the United States Trustee, secured and priority creditors, and twenty (20) largest unsecured creditors or the official unsecured creditors' committee, and its counsel, if appointed. See Local Rule 9013-1(C) and (E).

2. Payment to Insiders a. A chapter 11 debtor-in-possession must not compensate any present or former insider within the meaning of 11 U.S.C. §101(31) from estate assets without prior court approval. See Local Rule 2002-1(A)(2)(h).

b. Any motion to compensate any present or former insider must recite:

i. The necessity for retaining the insider;

ii. The services that the insider will perform on behalf of the estate;

iii. The amount (including any benefits) that the debtor proposed to pay to the insider, and the terms and conditions of the employment or other undertaking;

iv. All compensation, benefits, and other payments that the insider has received from the debtor in the six (6) months prior to the petition; and v. The insider's salary at the date of the petition.

3. The debtor must promptly file with the Clerk written notice of any change of mailing address until the case is closed.

D. Duties of Debtor's Counsel in Chapter 7 Cases As a condition of employment, the representation by counsel of a chapter 7 debtor must include, but is not limited to:

1. Preparation of prepetition schedules, statement of financial affairs, and all required documents or pleadings;

2. Attendance at the section 341(a) meeting;

3. Representing debtor in connection with any documents or amendments to pleadings required by the trustee, if applicable;

4. Representing debtor in connection with objection to proofs of claim, exemptions, reaffirmations, and surrender;

5. Counsel with the debtor(s) on an as needed basis until the case is closed;

6. Prepare and file miscellaneous pleadings required to protect the debtor(s)' interests in the case;

7. Prepare and file responses to motions filed against debtor(s) – even if the response is a statement that the debtor(s) have no opposition to the relief requested and attend the scheduled hearing, if requested by the court;

8. Advise the debtor(s) concerning their obligations and duties pursuant to the Bankruptcy Code, FRBP, and applicable court orders; and 9. Promptly file with the Clerk written notice of any change of debtors's mailing address until the case is closed.