Top 10 Things You Must Know About Your Chapter 13 Case with Judge Johnson

Judge Johnson

“Thus the best laid plans of mice and [attorneys] oft go astray.”

Because Judge Wayne Johnson of the Riverside, CA Bankruptcy Court knows this, he does his best to keep us on our toes. Of course, that’s a good thing. Attorneys who don’t stay on their toes will eventually wish they had.

He’s reviewed the local rules and procedures. He’s done a comparison of those with the Federal Rules of Bankruptcy Procedure and the Bankruptcy Code and found them to be conflicting and confusing.

In his Guidelines for Chapter 13 cases, he’s done his best to resolve the conflicts in a way that will comply with the law and allow for maximum success for chapter 13 cases.

This article is in no way a substitute for reading Judge Johnson’s Guidelines. You must Read them if he is the judge assigned to your case.

Read Them Here: Judge Johnson’s Guidelines for Chapter 13 Cases

Number 1

Deadlines is Deadlines. Miss a deadline and you’re dead, Judge Johnson will dismiss your case. Even simple ones such as turning in your tax returns and employment and income information at least 7 days prior to the hearing date.

In my office, my requirement is at most 7 days after the filing date. So, if you think his is bad, mine is worse. Besides, how could I prepare your case without your taxes and income information in the first place.  

So you have to bring that to your first meeting with me unless your taxes were extended and you haven’t prepared them yet. In that case, if you can, bring everything you’re going to have to use to prepare your taxes with you to my office.

Think of it this way, if you turn your taxes into your attorney on the 7th day before the hearing date, how is he going to mail it to the Trustee so that it arrives at the Trustee’s Office 7 days prior to the hearing?

Then there are deadlines that your attorney must comply with, such as serving your chapter 13 plan on your creditors. She or he must do it 28 days prior to your hearing date. Your hearing will in most cases be at least 45 days after your filing date, but not always. The form which must be used is HERE, and your chapter 13 plan must be attached. The form was recently updated, review it.

If your attorney misses the deadline, Judge Johnson will dismiss your case.

UPDATE The Local Rules Have Changed Again:  We used to have the confirmation on the same date as the 341a meeting of creditors hearing. However, recently the Central District of California changed the local rules to conform to the Federal Rules which state that the confirmation hearing is to be scheduled at least 20 days after the meeting of creditors. Per the new local rules, the Chapter 13 Plan must be served by the attorney for the Debtor(s) on all creditors and interested parties 14 days prior to the 341a meeting of creditors. Also under the local rules, the Chapter 13 plan must be served on all creditors at least 35 days prior to the confirmation hearing. Almost all judges set the confirmation hearing at least 20 days after the 341a meeting of creditors. Judge Wayne Johnson on the other hand, schedules all confirmation hearings only 14 days after the 341a meeting of creditors, which we colloquially refer to as your hearing. Yet the chapter 13 plan must still be served on all creditors 35 days prior to the confirmation hearing which means that the chapter 13 plan must be served 21 days prior to the 341a meeting of creditors or your hearing.

Number 2

See Number 1. If you are allowed to pay your mortgage payments directly to your mortgage lender, remember that your mortgage payment is a payment made “under the plan” and as such, it must be made on time. In other words you must pay it early from now on.

“Either the due date for all post-petition mortgages payments should be the original due date in the loan documents or the last date on which the payment may be made without penalty (i.e. at the end of the grace period). In cases governed by this standing order, the former shall apply and not the latter . . .”
                          ~Judge Johnson, Standing Order, page 33.

The Payment History Declaration, must be filled out if you are attempting to modify any debt secured by any real estate. “The “Payment History Declaration” should be completed, filed and served between seven to fourteen days prior to the confirmation hearing. It should be served upon the chapter 13 trustee and all creditors holding consensual liens against the property identified in the declaration. As set forth in the form, the Payment History Declaration must provide information regarding the amount of any and all monthly payments covering the period from (1) January 1st of the calendar year preceding the year in which the bankruptcy case is filed to (2) the date of the filing of the declaration.”
                          ~Judge Johnson, Standing Order, page 34.

If you miss the mortgage deadline, Judge Johnson will “generally” dismiss your case, although he could require conduit payments instead, see below.

Number 3

I’m tempted to say see Number 1 again, but there’s a lot more. For instance, many chapter 13 bankruptcies are filed to get caught up on your mortgage. You pay a payment to the bankruptcy trustee and he pays your mortgage arrears to the bank for you.

However, chez Judge Johnson, if you are more than 3 months behind in your mortgage payments, then you must also pay your regular mortgage payment to your bankruptcy trustee. Called a conduit payment, when you pay your regular payment to the bankruptcy trustee, you are less likely to get behind again because of the oversight. So, you are more likely to succeed in your chapter 13 case.

Because your payment will go up 5%, you may not want to do this. However, if you don’t want to pay your regular mortgage payment to the Trustee, Judge Johnson will dismiss your case.

Number 4

Appearance at your creditor meeting hearings is required, it is not optional.

If you’re one of these people who files a chapter 13 in order to stop a foreclosure while attempting a loan modification or short sale, and then you don’t show up to your hearing, Judge Johnson will dismiss your case and order that you are prohibited from refiling another case for 180 days.

So, if you find yourself in a similar situation 8 weeks later and you want to file again, you’re toast. But hey, that’s just what the rules and cannons of ethics require anyway.

Number 5

If you file an emergency case or bare bones case which doesn’t have all the schedules and statements because well, it was an emergency, you have 14 days to file the rest of those statements.

If you can’t get it done, then you might consider asking for an extension on those 14 days. However, if you do, then you will blow out the other deadlines such as serving the plan 28 days prior to the hearing. So, if you’re thinking of asking for that extension, don’t bother.

My office’s policy is to simply stay late and do the whole petition front to back and file the whole thing the first time. If it turns out that something must later be amended, then at least you’ve filed the whole thing on time.

If you file a bare bones emergency case and then file your balance of schedules after the 14 day deadline, Judge Johnson will dismiss your case.

Number 6

Your income schedule, called Schedule I, must match your proof of income. Trustee Danielson uses a Julian Calendar to calculate your income. We use them to determine how much money you will be making moving forward. In chapter 7, the means test looks backwards, but in chapter 13s we are looking forward.

Assuming that your weekly paycheck times 4 is your monthly income is an error. There are 4.33 weeks in a month. But more accurate is to use the Julian Calendar. That calendar shows how many pay periods you’ve had, then divide that into the gross income for that pay date. Then once you have the pay per pay period, multiply by 26 or 52. Then you divide by 12 to get your monthly income.

If you have to amend your income schedule, or schedule I, then it must be amended, filed and served, 7 days prior to your hearing, or Judge Johnson will dismiss your case.

If your income and your proof of income don’t match, Judge Johnson will dismiss your case.

Number 7

Your Attorney’s appearance at the Confirmation Hearing is required, and is not optional. That’s the hearing where the judge gives his or her final approval of your case. If your attorney does not show up to the confirmation hearing, Judge Johnson will dismiss your case. 

If you do not have an attorney, then you must show up, or Judge Johnson will dismiss your case.

However, even if you have an attorney, you should plan on being at the confirmation hearing as well. If your attorney has a car accident on the way there, then at least you were there, and you’d have a fighting chance.

Number 8

You MUST Read Judge Johnson’s Guidelines for Lien Strip Motions. Motions to Value Real Property also known as Lien Stripping Motions must be filed and served in time for the hearing on the motion to occur either before or during the confirmation hearing. If you miss the deadline, Judge Johnson will dismiss your case.

Motions to Avoid Judgment Liens on your real estate, also known as Lien Stripping Motions must also be filed and served in time for the hearing on the motion to occur either before or during the confirmation hearing. If you miss the deadline, Judge Johnson will dismiss your case.

Motions to to Value Personal Property also known as Cram Down Motions such as when you’re trying to reduce the balance on a car to its value must also be filed and served in time for the hearing on the motion to occur either before or during the confirmation hearing. If you miss the deadline, Judge Johnson will dismiss your case.

Number 9

The Motions to value in Number 8 are granted only conditional status and can only be made unconditional at the end of the case after you have completely performed all of your plan obligations and you have obtained a discharge. An adversary proceeding is required to obtain the final unconditional order.
Review Judge Johnson’s guidelines before you file your request as a motion or as an adversary proceeding. An adversary proceeding in bankruptcy is fancy way of saying lawsuit.

Number 10

So, let’s say you or your attorney blows a deadline and figures it out at the last minute the day before the hearing. You know that the case is going to be dismissed. Your attorney, bright guy that he is says, “Hey let’s just file a voluntary dismissal and then we can skip the hearing tomorrow. And then we’ll refile the case next week and not make any mistakes or get anything wrong this time!”

Nope, voluntary dismissals are not immediately effective. It takes a day or even a few for the judge assigned to your case to be told that it is there by his clerks, and to act on it.

Next day at your hearing, your trustee and your judge probably won’t even know that you’ve filed the voluntary dismissal. If you don’t show up to your hearing, SAY IT WITH ME! Judge Johnson will dismiss your case and order that you are prohibited from refiling another case for 180 days.

“Thus the best laid plans of mice and attorneys go oft astray.”

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San Bernardino Bankruptcy

Is a Riverside Bankruptcy looming on the horizon for Riverside?  In the wake of Stockton’s Bankruptcy Chapter 9 and the San Bernardino Bankruptcy filed just this morning, also a chapter 9, who’s next? 

You Can’t Squeeze Blood From a Turnip.

My inquiry is simple, if Riverside’s next door neighbor, San Bernardino, can file a bankruptcy and restructure its debts and contracts, how much does it owe to Riverside as a creditor?  Riverside Bankruptcies are about to start flowing like opening a vein.  You’ve heard that you can’t squeeze blood from a turnip, but I’ve learned from my bankruptcy practice of 16 years, sometimes you eat the turnip.

If you’re a turnip, how do you prevent creditors from eating you?  Bankruptcy is your pesticide.  Now that San Bernardino is going to refuse to pay many of its vendors, contractors and creditors, many of them are going to have to file bankruptcy.  People who did contract work for the city installing infrastructure on a contract basis or who work for San Bernardino but live in Riverside are going to feel the pinch.

City workers are going to be the biggest losers in this. Even though they do most of the best work for the city, who else does the city have to cut.  Furlough days are coming, pay cuts and pension restructuring as much as they can get away with.  However, there is good news, Chapter 9 Bankruptcy is not nearly as nice as the other chapters are to individuals.  Bankruptcy gives individuals fresh starts but a city / municipality, how much of a fresh start do they need?  Not as much.  This is a case where you can fight city hall.  Thankfully the unions will do most of that fighting for you and you’ll be happier you’re in a union than ever.  Still the ultimate defaults will be rampant.

If you end up having to file bankruptcy because you were owed money by San Bernardino and/or you work for San Bernardino and San Bernardino’s Bankruptcy cuts your pay or your job, call me, David L Nelson, Bankruptcy Attorney and I’ll make sure to give you my widows and orphans price for your bankruptcy.

Cities in California are losing tons of State Money which means they’re having to default on their obligations.  If you’re an general contractor or an independent contractor or a sub-contractor working for any City in California, make sure you get paid on time or in advance.

Never do work if the city you’re working for is late paying you.

Remember, Union Employees have contracts that will be largely enforceable when that city files chapter 9 bankruptcy, but you, you’re going to be out of luck.

If you’re a contractor working for a city, don’t work for free, and don’t think if someone else gets the job that they’re the lucky ones.  If the city never pays, you’ll be the lucky one who didn’t spend tons of money and resources on a job with NO Pay Day!

Bankruptcy Attorney David Nelson


I have been a Bankruptcy Attorney since the very beginning. Having graduated in the top 15% of my class I passed bar the first time and in June of 1994 I opened my law office.  Back then there was a recession and it was just natural to open a bankruptcy practice.  I saw a need and was able to fill it.

I’m an expert in the field of bankruptcy.  Since 1994, I have been passionate about getting my clients out of the troubles they find themselves in.  Certainly many of us might think that if we’d just planned better, we would have been able to avoid the challenges facing the country right now.  While it might be true, it’s probably more accurate to say that there was no way to plan our way out of the whole economy crashing down on us.

I’ve seen first hand the blessing that Bankruptcy can bring to individuals and families.  Think about this for a moment:  What is it that you fight about the most?  Is it too much money, “Dang what are we going to do with all these 20s honey?”  No, it’s the lack of money.

But what if we could cut the arguments in half?  What if we could at least take the arguments from: which debts do we pay this month with the little bit of money we have? and transform those to: how do we set up a savings for the little that we have?  That’s what Bankruptcy can do for you.

If you could start the day knowing that your credit cards, medical bills, repossessed cars, 2nd mortgages, and so on were all going to just disappear, how would you feel the rest of the day?

Wouldn’t you treat your spouse better?  Wouldn’t you be kinder to your children and co-workers?  Wouldn’t you have a better marriage, family, career?

I’ve probably saved more marriages than most marriage counselors over the same time period. You don’t need to know how to talk to each other about money, you must do something about it.

What if you could go back to paying your tithing or your favorite charity again?

Do something about it.  Make the Call Right now to set the Appointment that will change your lives.  Call 800 FILE AWAY or 800 345 3292, call right now.

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