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Proposed Local Rule Changes

Wed, 04/25/2007 - 5:00am

After consideration of the comments of bar and public pursuant to prior notice on March 7, 2007 and a review of procedures used in neighboring bankruptcy courts, the Judges have agreed to the following changes to the Local Rules in order to promote the availability of representation in consumer cases filed under the Bankruptcy Reform Act of 2005. Any party with additional final comments should send those to on or before May 3, 2007 at 2 pm.

Amend Local Rule 1019-1 to provide:

(c) Applicable to cases governed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, if there is neither a confirmed plan nor an order directing otherwise, the chapter 13 trustee shall disburse funds received prior to the entry of an order of dismissal or conversion in the following order:

1. unless otherwise ordered, disburse the lesser of the amount of debtor's attorney's proof of claim, to the extent that the claim has not been satisfied; $500.00; or the remaining balance of funds received by the trustee prior to dismissal or conversion. The attorney may seek a greater payment upon timely application to the Court made prior to the disbursement by the chapter 13 trustee; and

2. as adequate protection, disburse funds received prior to entry of an order of dismissal or conversion to the holders of allowed secured claims and allowed claims for executory contracts scheduled to be paid through the most recently filed plan, divided based upon the monthly payments provided therein. Subject to the availability of funds, creditors will be paid a full payment for each full month beginning thirty (30) days after the order for relief and continuing through the date of dismissal or conversion. No payment will be made for partial months; and

3. any funds remaining after these payments, and all funds received after conversion or dismissal, shall be returned to the debtor.

Amend Exhibit A to Local Rule 3015-1 to provide:

First unnumbered paragraph:

The following chapter 13 plan (the Chapter 13 Plan) and related motions (the Related Motions) have been filed in the above-captioned case. They will be considered at the Confirmation Hearing, notice of which is given in the Notice of Meeting of Creditors. Any objections to the confirmation of the plan, to the payment of attorney's fees in accordance with the distribution set forth herein, to the Motion to Value Security, to the Motion to Avoid Judicial Lien or to Avoid a Nonpurchase Money, Nonpossessory Security Interest and Lien, or to the assumption or rejection of an executory contract, all as requested herein, must be made in writing, served upon the undersigned counsel for the debtor(s), **, the chapter 13 trustee, ( **, appropriate address for chapter 13 trustee) and filed with the Court, United States Bankruptcy Court, 1100 Laurel Street, Columbia, SC 29201, within twenty-five (25) days from the date of filing this Notice, Chapter 13 Plan and Related Motions. All objections must comply with South Carolina Local Bankruptcy Rule 9014-4 (SC LBR 9014-4).

Numbered paragraph 3:

Subject to review and objection, a proof of claim for the attorney's fees of the debtor(s) in the amount of $_______ will be filed, and may be amended from time to time and shall be paid pursuant to this plan. Following confirmation of the plan and unless the Court orders otherwise, the chapter 13 trustee shall disburse $500.00 for the attorney's proof of claim in the initial disbursement made by the chapter 13 trustee.1 After the initial disbursement by the chapter 13 trustee, the balance of the attorneys proof of claim shall be paid with all funds remaining each month after payment to secured and domestic support creditors as set forth herein.

In instances where an attorney assumes representation in pending pro se cases and a plan is confirmed, a separate order may be entered by the Court, without further notice, which allows for the payment of a portion of the attorney's fees in advance of payments to other creditors.

1 The chapter 13 trustee shall not disburse more than the unpaid balance on the attorney's proof of claim or balance of the funds received under Paragraph 1 in the initial disbursement.

Numbered paragraph 5:

(a) All 11 U.S.C. 507(a)(1) priority creditors (pre-petition domestic support obligations) shall be treated as follows:

To ___________, the pre-petition domestic support obligations shall be paid in full, by paying $______ or more per month until the balance is paid in full, except as set forth in Paragraphs 2 and 3.

All post-petition domestic support obligations will be paid by the debtor(s) outside the plan and shall be kept current.

(b) Except as set forth in Paragraphs 2 and 3 and subsequent to the above, all other 11 U.S.C. 507 priority creditors (including, but not limited to, pre-petition taxes or other claims by governmental units) will have the allowed amounts of their pre-petition claims paid on a pro-rata basis. The debtor(s) shall pay all similar post-petition priority obligations to such creditors as they come due directly to such creditors.