Local Rule 3070-1: PAYMENTS IN CHAPTER 12 AND CHAPTER 13 CASES

RULE 3070-1 PAYMENTS IN CHAPTER 12 AND CHAPTER 13 CASES

(A) Payments to Creditors by Trustee: In chapter 12 and chapter 13 cases, no payment in an amount less than $25 shall be distributed by the trustee to any creditor. Funds not distributed because of this Local Bankruptcy Rule shall be paid whenever the accumulation totals at least $25. Any funds remaining shall be distributed with the final payment.

(B) Distribution of Estate Funds Upon Dismissal of Case Prior to Confirmation of Plan

(1) Noticing Fees Payable to Clerk of Court: The trustee shall pay all noticing fees due the Clerk out of estate funds before returning any funds to the debtor. If, pending dismissal, the funds on hand are not sufficient to pay all administrative expenses, the trustee shall pay to the Clerk the pro rata portion of the fees due.

(2) Notice of Proposed Distribution: The trustee may file a notice of proposed distribution of estate assets on hand, with copies to the debtor and debtor's counsel. The proposed distribution may include payment to the trustee for compensation as allowed by law and reimbursement of the trustee's out-of-pocket expenses incurred in the case. The notice shall state that if no objection to the proposed distribution is filed within 14 days, the trustee is authorized to proceed with distribution.

(C) Debtor's Failure to Commence Payments in Chapter 13 Case: Each chapter 13 debtor shall commence payments proposed by the plan not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier, unless the Court has set some different time. If payments are not received as required, the trustee shall file a motion to dismiss pursuant to 11 U.S.C. §1307(c)(4) and schedule such motion for hearing.

(D) Chapter 13 Pre-Confirmation Payments of Personal Property Leases: Pre-confirmation payments of personal property leases governed by 11 U.S.C. §1326(a)(1)(B) shall be made by the debtor to the chapter 13 trustee as part of the total payment to the trustee, and the trustee shall pay the lessor, both before and after confirmation, unless the debtor's plan provides that lease payments will be made directly by the debtor or no plan provision addresses payment of the debtor's lease obligation, in which event the debtor shall make the pre-confirmation payments directly to the lessor and furnish proof of such payments to the trustee.

(E) Chapter 13 Pre-Confirmation Adequate Protection Payments: Pre-confirmation adequate protection payments governed by 11 U.S.C. §1326(a)(1)(C) shall be made by the debtor to the chapter 13 trustee as part of the total payment to the trustee, and the trustee shall pay the amount provided for by the plan to the secured creditor both before and after confirmation, unless the debtor's plan provides that such payments will be made directly by the debtor or no plan provision addresses payment of the secured claim, in which event the debtor shall make the pre-confirmation payments directly to the secured creditor and furnish proof of such payments to the trustee.

Comments 3070-1(C) This change is necessary because of the addition of LBR 1017-3. [Change effective 2/1/00.]

3070-1 The amendments to paragraph (C) and new paragraphs (D) and (E) are derived from former Interim Procedure 3070-1(C), (D) and (E). Stylistic changes have been made to the text of the LBR as well. [Changes effective 12/01/09.]

3070-1(C) This rule provision is amended as a result of the holding in No v. Gorman, 891 F.3d 138 (4th Cir. 2018). The Public Notice referenced in paragraph (C)(2) is accessible at the Court's internet website www.vaeb.uscourts.gov as posted on January 17, 2019, under Virginia Eastern News. [Change effective 11/15/19.]

3070-1(C) This rule provision is amended to eliminate the Order Setting Hearing for failure to commence chapter 13 plan payments pursuant to 11 U.S.C. § 1307(c)(4). The referenced procedure will be the same in all divisions of the Court. [Change effective 06/01/23.]