OBTAINING CREDIT IN CHAPTER 13 CASES

(a) Dollar Limits (1) $2,500.00 or Less The Debtor may incur non-emergency consumer debt up to $2,500.00 without the trustee’s written approval or Court order. 38 | P a g e (2) Greater than $2,500.00 The Debtor shall seek the trustee’s approval or a Court order under subparagraphs (b) and (c) of this rule before incurring non-emergency consumer debt of more than $2,500.00. (b) Request Directed to Trustee The Debtor’s request to incur debt, other than debt to be secured by real estate, shall first be made to the trustee. If approved by the trustee, the Debtor may incur the debt.

If the trustee has not directed use of a specific form, the request shall include the following information: (1) a statement in support of the feasibility of the request; (2) (3) a description of the item to be purchased or the collateral affected by the credit to be obtained; a description of the interest held by another entity in collateral affected by the credit; (4) the reasons why the Debtor needs the credit; (5) the terms of the proposed financing, including the interest rate; and (6) the protection proposed for the interest held by another entity in the collateral. (c) Obtaining a Court Order (1) When Required The Debtor shall file a Motion to Incur Debt if: (A) (B) (C) the proposed debt is greater than $2,500.00 and is to be secured by real estate; the Debtor’s request under subparagraph (b) of this rule has not been approved by the trustee; or the Debtor seeks a Court order on a request that has been approved by the trustee. (2) Contents The motion shall include all the information required by subparagraph (b) of this rule. If the new debt will replace an existing obligation secured by the Debtor’s property, the motion shall also include the principal loan balance of the original debt, the rate of interest, the amount of monthly escrow for taxes and insurance, the monthly payment, and the maturity date.

Unless the motion states or documents the trustee’s approval, the Court shall give the trustee 14 days to object to the motion. 39 | P a g e B-4001-4. MOTIONS TO MODIFY SECURED DEBT: MORTGAGES The Debtor in a Chapter 13 case shall file a Motion to Modify Secured Debt to obtain approval of a modification of a debt secured by real estate that includes the following loan information both immediately before and after the proposed modification: the principal loan balance, the rate of interest, the maturity date of the proposed modified note, and the estimated total monthly payment, which shall include mortgage insurance, property insurance, and real estate taxes. A sample motion is available on the Court’s website.