Comments from Aki Koyama on the new Chapter 13 Plan Form

Some Common Errors with the New Plan

I just wanted to touch on some common drafting errors/omissions that I have observed with the new plan.  My sample has been limited but my hope is that clarification today will make for a smoother process for the bar, the trustees and the judges.

Here they are:

1. Post Petition Car Payments: if your client is making car payments directly and there is no arrearage on the car loan, please indicate that they are doing so by checking off the box for non-standard provisions [Page 2, section 1.4] and providing the detail in Section IV(D) Other Non Standard Provisions [Page 14];

2. “Pot” Plan Provision Section I(B)(1)(a) [See Page 3 of Plan] – Judge Jury and Judge Bason have advised that this check off box should never be checked off and will be deleted in the revised draft which should be issued some time this year;

3. Treatment of Non Priority Unsecured Claims Section I(B)(1) [See Page 3 of Plan] – you should always check off the “Residual” plan box for every case. If there is a liquidation analysis and/or means test issue, you should ALSO check off the “Percentage” plan box to show the minimum percentage/dollars that need to be paid to the nonpriority unsecured creditors;

4. Class 5B [Page 10 of plan] – if your client is making direct payments on student loans, you must list the student loan creditor(s) and other required creditor information in Class 5(B);

5. Class 7 [Page 11 of plan] – don’t forget to fill out this Class if your client needs to assume and business leases, car leases etc. If you don’t indicate assumption of the lease, the lease may be deemed rejected as a matter of law.

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