B-4001-3. OBTAINING CREDIT IN CHAPTER 13 CASES

(a)   Dollar Limits

(1)     One Thousand Dollars ($1,000.00) or Less

The Debtor may incur non-emergency consumer debt up to one thousand dollars ($1,000.00), including the refinancing of real property debt, without written approval of the trustee or order of the Court.

 (2)     Greater than One Thousand Dollars ($1,000.00)

The Debtor must seek approval of the trustee or an order from the Court before incurring non-emergency consumer debt of more than one thousand dollars ($1,000.00) using the procedures set out in subparagraphs (b) through (d) of this rule.

 (b)   Request Directed to Trustee

If the proposed debt is unsecured or to be secured by personal property, the Debtor shall first request approval to incur debt by written application to the trustee. Such request shall not be filed with the Clerk. If approved by the trustee, the Debtor may incur the debt in accordance with the terms and conditions approved by the trustee. If the trustee has not directed use of a specific form, the application shall include the following information:

(1)     a statement in support of the feasibility of the request;

(2)     a description of the item to be purchased or the collateral affected by the credit to be obtained;

(3)     a description of the interest held by any other entity in any collateral affected by the credit;

(4)     the reasons for which the Debtor has the need for the credit;

(5)     the terms of any financing involved, including the interest rate;

(6)     a description of any method or proposal by which the interest held by any other entity in the collateral affected by the credit may be protected; and

(7)     copies of all documents by which the interest of all entities in the collateral affected by the credit was created or perfected, or, if any of those documents are unavailable, the reason for the unavailability.

(c)   Filing Approved Request with the Court

If the Debtor seeks an order from the Court on a request that has been approved by the trustee, the Debtor may file the approved request with the Court and provide an order. If the pleading is filed without documentation showing the trustee’s approval, it will be treated as a Motion to Incur Debt filed under subparagraph (d). The trustee’s approval can be documented by reference to same within the motion or by attaching a document signed by the trustee.  

 (d)   Motion Directed to Court

If the proposed debt is greater than one thousand dollars ($1000.00) and is to be secured by real property or if Debtor's request under subparagraph (b) is not approved by the trustee, the Debtor may file a motion to incur such debt. The motion shall contain all of the information required for the request by subparagraph (b) and be served on the trustee. If the new debt will replace an existing obligation secured by the debtor’s property, then the motion shall also include the principal loan balance of the original debt, the rate of interest, the amount of any monthly escrow for taxes or insurance, the monthly payment, and the maturity date. The Court shall give the trustee 14 days’ notice of the opportunity to object to the Motion to Incur Debt.