This ought to make all those in a Ch. 13 go back and re-read their TRUSTEE'S website / rules - not just their confirmation order.
Saturday our washing machine stopped working suddenly - putting me into a state of panic as we've had unexpected bills come up recently, so the "extra $" we set aside for ER purposes has been mostly depleted. After researching what the issue could be for the washer (turns out we fixed it for less than $2 -
- gotta love the internet 
), I went back and re-read our confirmation order because DH thought we could incur debt up to $5K w/out permission (and he proceeded to get the "if looks could kill me" glare from me for even thinking about incuring debt).
on our confirmation order, it states:
Motion to incur debt: If the debtors need to incur debt in excess of the $5,000 limit allowed by the form plan (see paragraph 10), they must obtain prior approval from the Court. The $5,000 figure is the principal amount of new debt, and is a cumulative figure for the entire duration of the plan.
Now - I've read on here a million times over many others' confirmation orders that have the exact same language, which results in us believing that we can incur upwards of $5K in debt w/out permission. I kept telling hubby that its all in the "wording", i.e., "approval from the Court...doesnt say anything about not getting the Trustee's approval." After much bantering, I decided to find out who was right - me or hubby - and here is what I found.
Upon pulling up my trustee's website and reviewing the POST CONFIRMATION area of "How To's / Form Letters / Explanations" I found the following:
V. POST-CONFIRMATION (Note: The Court requires the Trustee's endorsement of any and all of the orders described below. Send any such proposed order as an attachment to e-mail to: ******@ntelos.net)
K. Motion to incur debt: If the debtors need to incur debt in excess of the $5,000 limit allowed by the form plan (see paragraph 10), they must obtain prior approval from the Court. The $5,000 figure is the principal amount of new debt, and is a cumulative figure for the entire duration of the plan.
The Trustee will want to know the reason for the motion, the terms of the loan being sought, and how the new obligation affects the feasibility of the plan; the last requirement may require amended Schedules I and J and recent paystubs. If the debtors are trying to purchase a replacement vehicle, the Trustee and the Court will want to know what efforts the debtors have made to ensure the lowest possible interest rate and monthly payment. A sample motion is attached. [Form#31: PDF / RTF]
p. Paragraph 10 of the plan: Incurring new debt
(1) No Court permission needed to incur a total of $5,000 (principal amount) in new debt during the Plan; this amount is cumulative, and applies to unsecured or secured debt.
(2) Notice required to Trustee, any creditor who has requested notice, and anyone else required by the Court’s Local Rules.
Turns out - I was correct. Had I not looked over every single thing and just based it on our confirmation order alone, we would've thought like many others, believing we could incur debt up to $5K without seeking approval. The key wording isnt in the actual sub-paragraphs (nor on our order) - but just a simple little "Note" at the beginning as well as the way (1) is written:
No Court permission needed...
Many may infer that the trustee is part of the court, so therefore, no need to ask their approval - when in fact, that is incorrect.
Something to think about - and to go look for on your Trustee's website (or simply call and ask). They should put it directly on every confirmation order what exactly they mean as it can be confusing. Always pay attention to the wording and read EVERYTHING.
Saturday our washing machine stopped working suddenly - putting me into a state of panic as we've had unexpected bills come up recently, so the "extra $" we set aside for ER purposes has been mostly depleted. After researching what the issue could be for the washer (turns out we fixed it for less than $2 -
- gotta love the internet ), I went back and re-read our confirmation order because DH thought we could incur debt up to $5K w/out permission (and he proceeded to get the "if looks could kill me" glare from me for even thinking about incuring debt).on our confirmation order, it states:
Motion to incur debt: If the debtors need to incur debt in excess of the $5,000 limit allowed by the form plan (see paragraph 10), they must obtain prior approval from the Court. The $5,000 figure is the principal amount of new debt, and is a cumulative figure for the entire duration of the plan.
Now - I've read on here a million times over many others' confirmation orders that have the exact same language, which results in us believing that we can incur upwards of $5K in debt w/out permission. I kept telling hubby that its all in the "wording", i.e., "approval from the Court...doesnt say anything about not getting the Trustee's approval." After much bantering, I decided to find out who was right - me or hubby - and here is what I found.
Upon pulling up my trustee's website and reviewing the POST CONFIRMATION area of "How To's / Form Letters / Explanations" I found the following:
V. POST-CONFIRMATION (Note: The Court requires the Trustee's endorsement of any and all of the orders described below. Send any such proposed order as an attachment to e-mail to: ******@ntelos.net)
K. Motion to incur debt: If the debtors need to incur debt in excess of the $5,000 limit allowed by the form plan (see paragraph 10), they must obtain prior approval from the Court. The $5,000 figure is the principal amount of new debt, and is a cumulative figure for the entire duration of the plan.
The Trustee will want to know the reason for the motion, the terms of the loan being sought, and how the new obligation affects the feasibility of the plan; the last requirement may require amended Schedules I and J and recent paystubs. If the debtors are trying to purchase a replacement vehicle, the Trustee and the Court will want to know what efforts the debtors have made to ensure the lowest possible interest rate and monthly payment. A sample motion is attached. [Form#31: PDF / RTF]
p. Paragraph 10 of the plan: Incurring new debt
(1) No Court permission needed to incur a total of $5,000 (principal amount) in new debt during the Plan; this amount is cumulative, and applies to unsecured or secured debt.
(2) Notice required to Trustee, any creditor who has requested notice, and anyone else required by the Court’s Local Rules.
Turns out - I was correct. Had I not looked over every single thing and just based it on our confirmation order alone, we would've thought like many others, believing we could incur debt up to $5K without seeking approval. The key wording isnt in the actual sub-paragraphs (nor on our order) - but just a simple little "Note" at the beginning as well as the way (1) is written:
No Court permission needed...
Many may infer that the trustee is part of the court, so therefore, no need to ask their approval - when in fact, that is incorrect.
Something to think about - and to go look for on your Trustee's website (or simply call and ask). They should put it directly on every confirmation order what exactly they mean as it can be confusing. Always pay attention to the wording and read EVERYTHING.
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