HOW CHAPTER 13
When an individual files a chapter 13
petition, an impartial trustee is appointed to administer the
case. 11 U.S.C. § 1302. In some districts, the U.S. trustee or
bankruptcy administrator2 appoints a standing trustee to serve in
all chapter 13 cases. 28 U.S.C. § 586(b). The chapter 13 trustee
both evaluates the case and serves as a disbursing agent,
collecting payments from the debtor and making distributions to
creditors. 11 U.S.C. § 1302(b).
Filing the petition under chapter 13 “automatically
stays” (stops) most collection actions against the debtor or the
debtor’s property. 11 U.S.C. § 362. Filing the petition does
not, however, stay certain types of actions listed under 11 U.S.C.
§ 362(b), and the stay may be effective only for a short time in
some situations. The stay arises by operation of law and requires
no judicial action. As long as the stay is in effect, creditors
generally may not initiate or continue lawsuits, wage
garnishments, or even make telephone calls demanding payments. The
bankruptcy clerk gives notice of the bankruptcy case to all
creditors whose names and addresses are provided by the debtor.