Chapter 13 Bankruptcy in New York

At a Chapter 13 341 hearing in New York, the trustee asks questions about a debtor’s petition to make sure everything is complete and nothing has changed since filing that the court.

The debtor uses official forms to file the bankruptcy petition. The trustee may ask questions about Schedule I. Schedule I is details a person’s dependents. If the trustee sees the debtor having more cars than the number of people in the family who can drive, for example, the trustee may question why the debtor wants to keep so many cars.

The trustee may also ask the debtor why s/he keeps property worth less than the mortgage payments. The trustee looks at the market value of the property and how much the debtor pays in loans each month. To get rid of excess property like cars or undervalued property like homes with net negative payments, the trustee will suggest the person surrender the property by amending the plan. The trustee objects to property that incur losses each month because the money saved from paying off these properties could be used to pay off other creditors.

If a person is behind in paying the monthly amount to the trustee, the trustee calculates for the debtor the amounts owed at the 341 meeting. The payments are due on a specific day each month. The trustee may not send an invoice, and require the New York debtor to logon to a trustee’s website to find out the monthly payments. The trustee may send the debtor a report on payments annually so the debtor verifies the trustee records the amounts correctly. A debtor may get a default letter from a creditor after filing bankruptcy when the debtor is not current on payments.

If payments are not current, the trustee may file a motion to ask the court to dismiss a case. A debtor may oppose a motion to dismiss, but if there are any opposing papers, the debtor should check court procedures to make sure the papers are filed on time. The court does not like it when a party presents papers to the court or the opposing side on the day of a hearing or at the last minute without notice because the opposing side would not be prepared to respond.

In a Chapter 13, the debtor must submit a tax return to the trustee each year the case is pending. The debtor should file tax returns with the IRS and state on time. If the trustee does not get a copy of the tax return, the trustee may file a motion to dismiss.

When thinking of filing Chapter 13 bankruptcy, contact an experienced New York bankruptcy attorney for a consultation on the proceedings.