Local Rule 4002-1: DEBTOR DUTIES

Rule 4002-1 DEBTOR DUTIES

(a) The following shall apply to individual debtors in all cases.

(1) FINANCIAL INFORMATION. Every individual debtor shall bring to the meeting of creditors under § 341 and make available to the trustee evidence of current income, including copies of all payment advices or other evidence of payment, if any, with all but the last four digits of the debtor's social security number redacted, received by the debtor from an employer within 60 days before the filing of the petition.

(2) TAX RETURN. Not later than 7 days before the date first set for the meeting of creditors, and unless the trustee consents to receiving them at a later time, the debtor shall provide to the trustee a copy of the debtor's Federal income tax return, redacted in accordance with Rule 9037 of the Federal Rules of Bankruptcy Procedure, for the most recent tax year ending immediately before the commencement of the case and for which a return was filed, including any attachments, or a transcript of the tax return, or provide a written statement that the documentation does not exist.

(3) The debtor's obligation to provide tax returns under Federal Bankruptcy Rules 4002(b)(3) and 4002(b)(4), and Local Bankruptcy Rule 4002-1(a)(2) and (b)(2) is subject to procedures for safeguarding the confidentiality of tax information established by the Director of the Administrative Office of the United States Courts, except that with respect to tax returns provided by the debtor under Local Bankruptcy Rule 4002-1(a)(2) and (b)(2), the trustee and bankruptcy administrator are not subject to the procedures for requesting and obtaining access to tax information established by the Director of the Administrative Office of the United States Courts.

(b) CHAPTER 7 DEBTOR - DUTIES. The following shall apply in chapter 7 cases.

(1) The chapter 7 debtor shall comply with the requirements of Local Bankruptcy Rules 1007-1 and 1007-3 regarding statements of intention.

(2) TAX RETURNS AND PAYMENT ADVICES PROVIDED TO BANKRUPTCY ADMINISTRATOR.

(A) No later than 14 days after the date of the filing of the petition, an individual debtor in a case under chapter 7 shall provide in electronic format to the bankruptcy administrator: (i) the debtor's Federal income tax return for the most recent tax year ending immediately before the commencement of the case and for which a return was filed, including any attachments, or a transcript of the tax return, or provide a written statement that the documentation does not exist; and (ii) evidence of current income including copies of all payment advices or other evidence of payment, if any, with all but the last four digits of the debtor's social security number redacted, received by the debtor from an employer within 60 days before filing of the petition.

(B) If a debtor is proceeding without the assistance of counsel and is unable to provide in electronic format the documents required in (A) of this subsection, the debtor may provide the documents to the bankruptcy administrator by other means.

(c) CHAPTER 11 DEBTOR - DUTIES. The following shall apply in chapter 11 cases.

(1) NOTICE OF DISPUTED, CONTINGENT OR UNLIQUIDATED CLAIMS. The debtor shall notify each creditor whose claim is scheduled as contingent, disputed or unliquidated in compliance with the requirements of Local Bankruptcy Rule 3002-1.

(2) MONTHLY REPORT.

(A) Except as provided in small business cases, Federal Rules of Bankruptcy Procedure 2015(a)(6), effective December 1, 2008, the debtor shall file with the clerk monthly accountings, the first report being due within 30 days, following the end of the month in which the petition was filed or date of conversion from another chapter, and subsequent reports on or before the thirtieth day of each month thereafter.

(B) The debtor shall transmit a copy of all monthly reports to the bankruptcy administrator, attorney and the chair for the unsecured creditors committee. That report shall be in a format prescribed by the bankruptcy administrator.

(C) Monthly bank statements shall be transmitted to the bankruptcy administrator at the time the monthly report is filed with the court. However, the monthly bank statements shall not be filed with the court.

(3) BOOKS OF ACCOUNT.

(A) The debtor shall close the present books of account as of the close of business on the date on which the petition is filed and open new books of account and a bank account in a depository acceptable to the bankruptcy administrator and meeting the requirements of 11 U.S.C. § 345(b) with respect to amounts on deposit exceeding $100,000.00 as of the opening of business on the next succeeding business day.

(B) In the new books of account, the debtor shall keep proper records of earnings, expenses, receipts and disbursements, and all obligations incurred and business transactions. The debtor shall preserve proper vouchers for all payments made on account of the disbursements.

(C) If the debtor is authorized to use cash collateral, separate cash collateral accounts must be established and maintained pursuant to 11 U.S.C. § 363(c)(4).

(4) PROOF OF INSURANCE COVERAGE.

(A) The debtor shall keep the property of the debtor and the bankruptcy estate insured in a manner and to the extent as may be deemed necessary and prudent with loss payable clauses, in the case of pledged or mortgaged property, in favor of the appropriate secured creditors as their interests may appear.

(B) Within seven days of the filing of the petition, or date of conversion from another chapter, the debtor shall file with the bankruptcy administrator a verified statement or written evidence that workers' compensation, general liability, fire, theft and motor vehicle insurance are in full force and effect, together with all other insurance coverage ordinarily used in the debtor's operations.

(5) TAX ACCOUNTS.

(A) The debtor shall segregate and hold separate from all other funds, all monies withheld from employees or collected from others for taxes, including social security taxes, under any law of the United States or any state or subdivision thereof.

(B) The debtor shall deposit the funds withheld or collected, together with the debtor's share of social security taxes, in a separate bank account simultaneously with the collection or withholding. The debtor shall pay from the bank account to the appropriate taxing authority the amounts due at the times and in the manner prescribed by law.

(6) BANKING INSTITUTION. The debtor shall advise the bankruptcy administrator of the name of the bank to be used as the debtor's depository within 14 days of the filing of the petition or date of conversion from another chapter.

(7) FILING OF PLAN AND DISCLOSURE STATEMENT. The debtor shall file a plan of reorganization and a disclosure statement within 120 days of the date of the filing of the petition commencing the case or date of conversion from another chapter, unless another deadline is set by the court.

(8) PHYSICAL INVENTORY. The debtor shall procure a physical inventory, if applicable, upon the filing of the petition and file the inventory with the bankruptcy administrator within 30 days of the filing of the petition, date of conversion from another chapter, or such other time as the court may direct.

(9) PROJECTED OPERATING STATEMENT. The debtor shall file with the bankruptcy administrator a projected operating statement for the next 30 days of operation under chapter 11 within 14 days of the filing of the petition commencing the case or date of conversion from another chapter. The statement must contain: (A) the estimated costs of operation for the next succeeding 30 days; (B) the estimated profit or loss for the period; (C) the amount of cash available for the operation; (D) how the debtor intends to fund the cost of operation for the next 30 days; and (E) any additional information that is pertinent to determine the desirability of continuing the debtor's business.

(10) RELATIONSHIP WITH SECURED CREDITORS AND UNSECURED CREDITORS' COMMITTEE. The debtor shall promptly respond to reasonable inquiries of secured creditors, the unsecured creditors' committee, and any court appointed consultant.

(11) PAYMENT OF JUDICIAL CONFERENCE QUARTERLY FEE. In all cases filed after April 1, 2002, the debtor shall promptly remit quarterly fees to the clerk, which fee shall be calculated on the graduated scale as prescribed by 28 U.S.C. §1930(a)(7), based upon the total sum of all disbursements made during a calendar quarter until the case is either converted to a case under another chapter or closed. In cases in which the debtor is represented by counsel, the payment of quarterly fees shall be pursuant to General Order dated August 28, 2013 and effective September 3, 2013, entitled "Payment of Quarterly Fees via Electronic Means," which states that "attorneys representing chapter 11 debtors are required to remit quarterly fees to the clerk through pay.gov upon receipt of certified funds from the chapter 11 debtor for the purpose of paying quarterly fees."

(12) FILING OF AMENDED PLANS OR MODIFICATIONS TO PLANS. The filing of an amended plan or modification to plan shall be accompanied by either a red-lined copy of the plan, illustrating changes made to the last submitted plan, or by a summary or description of changes that the amended plan or modification to plan makes to the last submitted plan.

(13) FILING OF FINAL INTEGRATED PLAN UPON CONFIRMATION. Upon confirmation, the debtor shall submit with the order confirming plan a final, integrated copy of the confirmed plan, including all amendments or modifications adopted at the time of confirmation.

(d) CHAPTER 11 - DEBTOR PROHIBITIONS.

(1) PAYMENT TO PRINCIPALS. The chapter 11 debtor shall not compensate or remunerate any of its partners, officers, directors or shareholders in any manner, prior to confirmation of a plan of reorganization or prior to approval of the court, except as provided in the interim exception under subparagraph (d)(1)(B) herein.

(A) An application for approval of compensation must be signed under oath by an officer of the debtor and must set forth the following: (i) the name and proposed position of the individual sought to be employed along with a detailed description of the duties the individual is to perform, the number of hours the individual will devote to those duties each week, and the reasons why the employment of the individual is necessary to the successful reorganization of the debtor; (ii) the amount of compensation sought on a weekly or monthly basis and details of all perquisites, benefits and consideration of any kind the individual is to receive. Examples include use of company vehicles, payment of life or health insurance premiums, reimbursement of expenses; and (iii) the salary history of the individual to be employed for the year immediately preceding the filing of the petition. Supporting documentary evidence thereof shall be provided directly to the bankruptcy administrator.

(B) If the debtor has filed an application for an interim payment for post-petition services which substantially conforms to the requirements of subsection (d)(1)(A) above, the debtor may make an interim payment in an amount not to exceed the ordinary pre-petition salary or wages for a 30 day period to those individuals who were employed on the date of the filing of the bankruptcy petition, or date of conversion from another chapter, and for whom approval is being sought.

(C) The court may reconsider orders to compensate principals sua sponte or at the request of the bankruptcy administrator, any creditor or other party in interest.

(2) PAYMENT OF PRE-PETITION DEBT. The debtor shall not pay pre-petition unsecured debt including pre-petition wages without approval of the court.

(e) CHAPTER 12 - DEBTOR DUTIES. The following shall apply in chapter 12 cases.:

(1) SCHEDULES AND STATEMENTS REQUIRED. The debtor shall comply with the requirements of Local Bankruptcy Rule 1007-1.

(2) MONTHLY REPORTS. The debtor shall file monthly reports with the chapter 12 trustee. The first report is due within 30 days following the end of the month in which the petition is filed or conversion from another chapter. Subsequent reports are due no later than the fourteenth day of each month. The reports shall be submitted in a format acceptable to the bankruptcy administrator and shall contain the following: (A) monthly receipts from every source; (B) monthly disbursements by accounting classification; (C) expenses charged and not paid; (D) crop inventory (if applicable); (E) livestock inventory (if applicable); (F) tax deposit statement (if applicable); and (G) bank statements.

(3) BOOKS OF ACCOUNT.

(A) The debtor shall close the present books of account as of the close of business on the date on which the petition is filed, or date of conversion from another chapter, and open new books of account and a bank account as of the opening of business on the next business day.

(B) In the new books of account, the debtor shall keep proper records of earnings, expenses, receipts, disbursements, and all obligations incurred and transactions had in the operation of the business. The debtor shall preserve proper vouchers for all payments made on account of the disbursements.

(4) INSURANCE COVERAGE. The debtor shall maintain adequate insurance coverage on property of the debtor and the bankruptcy estate. The debtor shall have loss payable clauses in favor of the appropriate secured creditors for any pledged or mortgaged property. The debtor must provide proof of insurance to the trustee within fourteen days of the filing of the case.

(5) TAX ACCOUNTS.

(A) If the debtor has more than five employees, the debtor shall segregate from all other funds, all monies withheld from employees or collected from others for taxes, including social security taxes, under any law of the United States or any state or subdivision thereof.

(B) The debtor shall simultaneously deposit the withheld or collected funds, together with the debtor's share of social security taxes, in a separate bank account with the collection or withholding. The debtor shall pay from the bank account to the appropriate taxing authorities the amounts due at the times and in the manner prescribed by law.

(6) BANKING INSTITUTION. The debtor shall advise the trustee of the name of the bank and the account number to be used as the debtor's depository within 14 days of the filing of the petition commencing the case under chapter 12 or date of conversion from another chapter.

(7) FILING OF PLAN. The debtor shall file a plan of reorganization within 90 days of the order for relief pursuant to 11 U.S.C. § 1221.

(8) RELATIONSHIP WITH CREDITORS. The debtor shall promptly respond to reasonable inquiries of creditors.

(9) FILING OF AMENDED PLANS OR MODIFICATIONS TO PLANS. The filing of an amended plan or modification to plan shall be accompanied by either a red-lined copy of the plan, illustrating changes made to the last submitted plan, or by a summary or description of changes to the last submitted plan made by the amended plan or modification to the plan.

(10) FILING OF FINAL INTEGRATED PLAN UPON CONFIRMATION. Upon confirmation, the debtor shall submit with the order confirming plan a final, integrated copy of the confirmed plan, including all amendments or modifications adopted at the time of confirmation.

(f) CHAPTER 12 - DEBTOR PROHIBITIONS.

(1) PAYMENTS TO PRINCIPALS. If the debtor is a partnership, corporation or limited liability corporation, the debtor shall not compensate any of its partners, officers, directors, shareholders or members in any manner, prior to confirmation of a plan of reorganization or without prior approval of the court, except as provided in the interim exception under subparagraph (f)(1)(B) herein.

(A) An application for approval of compensation must be signed under oath by an officer of the debtor and must set forth the following: (i) the name and proposed position of the individual sought to be employed along with a detailed description of the duties the individual is to perform, the number of hours the individual will devote to those duties each week, and the reasons why the employment of the individual is necessary to the successful reorganization of the debtor; (ii) the amount of compensation sought on a weekly or monthly basis and details of all perquisites, benefits and consideration of any kind the individual is to receive, examples include use of company vehicles, payment of life or health insurance premiums, and reimbursement of expenses; and (iii) the salary history of the individual to be employed for the year immediately preceding the filing of the petition. Supporting documentary evidence thereof shall be provided directly to the bankruptcy admin[istrator].