Local Rule LR 4001-1: Preconfirmation Adequate Protection Payments

LR 4001-1 Preconfirmation Adequate Protection Payments

(a) Preconfirmation adequate protection payment requirements.

(1) The chapter 13 trustee must make preconfirmation adequate protection payments provided for in a proposed chapter 13 plan or court order, or any available portion of those payments, from any funds available for that purpose received before the date of the entry of an order of dismissal.

(2) The chapter 13 trustee may make adequate protection payments conforming to this Local Rule in the ordinary course of the trustee's business from funds in the case as they become available for distribution to claimants.

(3) A trustee is not required to make preconfirmation adequate protection payments if:

(A) The debtor has not listed the secured creditor's name and a sum certain to be paid to the creditor or

(B) The secured creditor has not filed a proof of claim alleging a secured claim for which the plan proposes adequate protection payments.

(b) Payment methodology and effect on claim amount. The chapter 13 trustee must make all adequate protection payments subject to this Local Rule as provided for in the proposed chapter 13 plan; unless the plan provides otherwise in clear and conspicuous language, the trustee will make adequate protection payments in equal monthly amounts.

(1) Adequate protection payments reduce the principal amount of the related secured claim but the trustee must pay the claim as allowed unless the court orders otherwise.

(2) The debtor must file notice of all adequate protection payments made directly to the creditor no later than 28 days after making such payments.

(c) Objections. Pursuant to 11 U.S.C. § 1326(a)(3), interested parties may object to the payment of adequate protection as provided in a proposed plan or otherwise. If an objection is filed to adequate protection payments provided for in an unconfirmed plan, the chapter 13 trustee may continue to make those payments unless the court orders otherwise.

(d) Preconfirmation adequate protection payments to a lessor of personal property. If the debtor leases personal property, the debtor must pay the lessor directly all scheduled lease payments that become due in the ordinary course (and without acceleration) after the date of the order for relief. The debtor is presumed for purposes of plan confirmation to have made these payments as required under 11 U.S.C. § 1326(a), unless an objection or other filing contends otherwise.