Best Practices for Chapter 13 Plan Confirmation

Chapter 13 Tips and Tricks, Tacoma
Michael Malaier, Tacoma Chapter 13 Trustee

Over the years, I have noticed a pattern among those Chapter 13 cases that are confirmed immediately, and those that get bogged down in the objection process. The suggested best practices listed below are offered to help more chapter 13 cases advance without drawing objections.

Here are the top 5 reasons that my office will file an objection in a Tacoma chapter 13 case:

1) Petitions and plans not accompanied by the required FRBP 4002 documents. The 4002 documents are critical to a review of the plan in anticipation of the §341 meeting. Without the 4002 documents, my office cannot value the estate, adequately gauge income, or complete the

§341 meeting. While it is certainly true that some cases must be filed on an emergency basis, many filings should not present this challenge. Schedules B, C, I, 122C-1, etc. all require the 4002 information in their drafting.

2) Bank statements that do not reference the Debtor’s name or the name of the financial institution. The information in the Debtor’s schedules cannot be verified without legible, readily identifiable copies of the date-of-filing bank statements. Schedule B should list each bank account separately. Issues surrounding bank statements are included in over 80% of all objections filed by my office.

3) House values supported only by county tax records. The housing market in Western Washington is (and has been for years) hotter than a pistol. The county tax assessed values are simply not accurate representations of what a property would bring at an open-market sale. My office relies on Zillow as a default (which is much lower than Redfin). Objections can be avoided if Debtors use a similar online valuation or, as the case may require, accompany their filing with photos or documentary evidence to justify a lower figure.

4) Partial interests in real property. If a Debtor has only a partial interest in real property (or a vehicle/boat), a copy of the relevant deed (or title) should be provided upon filing. Having a copy of the deed or title will expedite the §341 meeting and allows the plan to be vetted with without delaying confirmation.

5) Chapter 13 plans that seek Lanning relief but provide no basis for the deviation. The Court’s local rules no longer require a Debtor to provide a separate declaration in support of a Lanning deviation. However, the chapter 13 trustee does require adequate evidence of the request prior to confirmation. Given that many objections seek more information regarding Lanning requests, providing the evidence at the outset will expedite review.

Following the best practices and guidance above will go a long way in keeping your case moving toward confirmation without delays. Many successful practitioners will communicate with my office prior to filing a difficult or unusual case to discuss the challenges and required documentation. When timing does not allow for contact in advance of the filing, practitioners are encouraged to work with my office in advance of the §341 meeting to resolve potential documentation issues.

Most chapter 13 objections are the result of gaps in documentation or lack of information. Please feel free to contact me or my staff at any time, whether before or after filing, so that we can help you get your cases confirmed. Quick confirmation means quicker disbursement to creditors, quicker payment of attorney fees and fewer trips to court.

Mike Malaier