Last week, I was reminded about the importance of taking care of Chapter 13 business early. I got stuck in court for 4 hours waiting to have a 45 second conversation with the Chapter 13 trustee.
My case involved a trustee motion to dismiss. My client had filed Chapter 13 about 2 years ago and earlier this year he lost his job and thus fell behind on his trustee payments. The trustee filed a motion to dismiss, with a hearing scheduled for mid-May. A couple of days before the hearing my client called to say that he had landed a new job and could I buy him some time. I called and emailed the trustee and she agreed to reset the motion to dismiss hearing to last week’s calendar.
I notified my client of the reset and asked him for detailed information about his new job including a salary breakdown. He provided me most of what I needed but did not yet have an actual paycheck. He also sent the trustee 3 of the 5 missing payments. Finally, the weekend before the hearing I decided to file my amended budget with an estimated budget.
On the Monday before the Wednesday hearing I started calling and emailing the trustee. No response. I checked the trustee’s web site – my client’s personal check had not yet posted (although he did have a registered mail receipt signed by someone in the trustee’s office). The day before the hearing I emailed and called. No response.
Having no other choice, I trekked down to court only to discover that the judge’s hearing calendar was 15o pages with hundreds and hundreds of cases. It took 3 1/2 hours to read the calendar. After the call of the calendar I was able to talk to the trustee and she agreed to a consent order assuming the funds posted within 10 days – a 45 second conversation.
What could my client and I have done differently?
- I should have insisted on a paycheck breakdown 10 days earlier, even if we were working with estimates. My client wanted to be accurate but in this case timeliness was more important.
- My client should have brought the trustee certified funds by personal delivery and obtained a receipt for same. This should have been done at least 7 days prior to the hearing.
The good news here is that we saved his case. This is especially important because I had filed a lien strip early on in the case and eliminated a $30,000+ second mortgage. If the case had been dismissed that 2nd mortgage would have reattached to my client’s house.