By Kitty J. Lin
The Chapter 13 Plans for the Oakland and San Francisco Divisions of the Northern District of California have undergone a significant makeover. The Oakland and San Francisco Divisions are using a new Model Chapter 13 Plan effective August 1, 2013. The Oakland Division’s Chapter 13 Plan went from being a one page plan to a five page plan. Oakland is the division with the biggest change in terms of the way the plan looks, but the way the Chapter 13 plans are administered have not significantly changed. The San Francisco Division has about the same amount of pages but the Chapter 13 plan has been reorganized.
The new Model Chapter 13 Plans for the Oakland and San Francisco Divisions are laid out and organized by classes. Class 1 is for secured claims that have arrears. This is where you would include your mortgage arrears if you want to pay them back in your Chapter 13 plan. Class 2 is for secured claims that are being modified in your Chapter 13 plan. This is where you would include a vehicle that you are “cramming down” to its fair market value or junior liens that are wholly unsecured. You should consult with bankruptcy attorneys if do not know what this means and you think that this may be beneficial to you. Class 3 claims are for secured claims in which you are surrendering the collateral. If you want to surrender your vehicle or house for whatever reason this is where you would include that claim. Class 4 claims are for secured claims that you are current on and what to pay directly to the creditor. A bankruptcy lawyer can explain to you the significance of either paying the claim through the Chapter 13 plan or paying the claim directly to the creditor outside the plan. The benefits of each one are dependent on your particular circumstances. Class 4 is also where you would include claims you are trying to obtain a loan modification for. If you are in the process of obtaining a loan modification for your mortgage and you want the arrears to be taken care of as part of your loan modification, then you would include them in Class 4. Class 5 is for unsecured priority claims. This is where you would include the claims you owe to the taxing authorities like the Internal Revenue Service and Franchise Tax Board. These are the taxes that are non-dischargeable. You would also include any child support or alimony arrears or other claims that are considered a priority claim. If you do not know what is considered a priority claim, contact an experienced bankruptcy attorney for guidance. Class 6 claims are designated for unsecured claims that would be pain in full even if the other nonpriority unsecured debts are not. You are essentially saying that the creditors in Class 6 deserve special treatment and you would need to indicate why they should have special treatment. Lastly, Class 7 claims are for all other unsecured nonpriority debt. This is where the claims for your credit card debt, medical bills, personal loans, and other unsecured debt would be listed.
The new Model Chapter 13 Plans for the Oakland and San Francisco Divisions may take some getting used to, but be sure to use the correct plan or it can be rejected by the court and you would need to file a new one. Chapter 13 bankruptcies are normally more complicated and it is highly recommended that you retain experienced bankruptcy attorneys to help you through the process.