"Combo" features of local chapter 13 plan

Monday, July 30, 2018

There has been some confusion about using the “combo” features of our local form chapter 13 plan. The local plan, like the national form plan, can contain both regular plan provisions and motions. The main issue is whether to file separate motions even if the plan provides for proposed treatment of secured creditors in Part 3 of the plan. There also is uncertainty about when to check the box “yes” in Par 1.1.b of the plan.

A chapter 13 plan committee has been formed to review our form plan and try to resolve the confusion. Adopting a revised plan will take some time.

Until a new plan is adopted, PLEASE DO NOT FILE SEPARATE MOTIONS if you wish to: limit the amount of a secured claim based on valuation of collateral, strip a wholly unsecured mortgage, or avoid a nonpossessory, nonpurchase money security interest or judicial lien (together, “Lien Relief”); or assume an executory contract or unexpired lease. Instead, ask for the relief in the plan, and check “yes” in part 1.1.b. Check “no” in Part 1.1.b. only if the debtor will not seek any Lien Relief.

Plan provisions seeking Lien Relief or assumption of executory contracts/unexpired leases will be treated in CM/ECF as motions “embedded” in the plan. When you file your plan, please use the prompts in CM/ECF to code each such request as a motion. Remember that Lien Relief requires service of the plan in accordance with Bankruptcy Rule 7004.

The confirmation order should include provisions granting the requested relief. Alternatively, you may submit separate orders granting the relief when you submit the confirmation order.