Local Rule Rule 4001-5: Pre-Confirmation Payments in a Chapter 13 Case

Rule 4001-5 Pre-Confirmation Payments in a Chapter 13 Case

(a) Payment by the Trustee.

(1) Conditions of Disbursements. Without a court order, the trustee must disburse pre-confirmation payments under § 1326(a)(1) to a creditor holding a purchase money security interest in personal property and to a lessor of personal property if: (A) funds are available; (B) the creditor or lessor has, by the 14th day of the month prior to the trustee's next regularly scheduled disbursement, filed a proof of claim with adequate proof of a security interest attached setting forth the amount of the debtor's contractual monthly payment obligation; (C) either the plan proposes that the claim will be paid by the trustee or the debtor was not current in the debtor's contractual monthly payment obligation when the petition was filed; (D) the plan proposes that the debtor will retain possession of the secured or leased property; and (E) a stay is in effect as to the secured or leased property. If any objection to the proof of claim is filed, the trustee must escrow the amount of distributions on such proof of claim until further order of the court.

(2) Timing of Disbursement. The trustee's disbursements must be made monthly until an order of confirmation is entered.

(3) Amount of Disbursement. Unless the court orders otherwise for good cause shown under § 1326(a)(3), the disbursements must be 30% of the debtor's contractual monthly payment obligation to each secured creditor and 100% of the debtor's contractual monthly payment obligation to each personal property lessor. If the trustee does not have sufficient funds on hand to make all of the required disbursements, the disbursements must be made pro rata based on the monthly payments required.

(4) Dismissal. Upon dismissal of the case, the trustee must make the required pre-confirmation disbursements before disbursing any funds to the debtor.

(5) Trustee's Statutory Fee. For all pre-confirmation disbursements, the trustee will be awarded and paid a fee equal to the applicable percentage fee established by the United States trustee.

(b) Direct Payment by the Debtor.

(1) Conditions of Payment. Without a court order, the debtor must make pre-confirmation payments under § 1326(a)(1) to a creditor holding purchase money security interests in personal property and to a lessor of personal property if: (A) the creditor or lessor has filed a proof of claim with adequate proof of a security interest attached setting forth the amount of the debtor's contractual monthly payment obligation; (B) the debtor was current in the contractual monthly payment obligation when the petition was filed; (C) the plan proposes that the claim will be paid directly by the debtor; (D) the plan proposes that the debtor will retain possession of the secured or leased property; and (E) a stay is in effect as to the secured or leased property.

(2) Timing and Amount of Payment by the Debtor. The debtor's payments must be made as required by the debtor's contract.

(c) Amended Proof of Claim. Within 28 days after confirmation, a creditor receiving any pre-confirmation payments must file an amended proof of claim clearly showing the application of the pre-confirmation payments.