Houston Bankruptcy Court issues Hurricane Harvey Order

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
Posted on Sep 06, 2017

If you are currently in chapter 13 bankruptcy in the Corpus Christi, Galveston, Houston, or Victoria areas and were impacted by Hurricane Harvey, the bankruptcy court has issued a Fourth General Order which may help you. I've pasted the full content of it below. 

It gives chapter 13 trustees discretion to not file motions to dismiss for non-payment through November 1, 2017 in the Corpus Christi, Galveston, Houston, and Victoria Divisions. The bankruptcy court discourages motions to suspend or put a moratorium on payments, but if someone has gotten behind on payments during the period of August 28 through October 31, 2017, the court encourages the filing of motions to modify plans to catch up the delinquent payments. This could increase the amount of your plan payments.

The court states that it will consider emergency motions to suspend wage orders, but debtors must maintain their chapter 13 payments if they are able to do so. 

Finally, default provisions in agreed orders that require that debtors make all payments due to the chapter 13 trustee after the date of this order, are modified. If the failure to make a payment to the chapter 13 trustee is due to Hurricane Harvey's substantial and adverse effect on a debtor, missed payments for the period from August 28, 2017 through October 31, 2017 will be a default only if the Court determines that it is, after notice and hearing.

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

CORPUS CHRISTI, GALVESTON, HOUSTON AND VICTORIA DIVISIONS

INRE: § HURRICANE HARVEY § GENERAL ORDER 2017-6

§ FOURTH GENERAL ORDER CONCERNING HURRICANE HARVEY

The Court recognizes that some chapter 13 debtors may be unable to make required plan payments to chapter 13 trustees. The Court therefore orders: 1. Bankruptcy Local Rule 1017 -2(b) requires chapter 13 trustees to file motions to dismiss chapter 13 cases if a debtor is two monthly payments in arrears. That rule is suspended through November 1, 2017 in the Corpus Christi, Galveston, Houston, and Victoria Divisions. 2. If a debtor is unable to make required payments to the chapter 13 trustee because the debtor was substantially and adversely affected by Hurricane Harvey, the Court will consider the appropriate method of addressing those missed payments at a hearing on a motion to modify a chapter 13 plan. The Court encourages motions to modify plans for missed payments for the period August 28, 2017 through October 31, 2017 be filed not later than November 17, 2017. 3. Motions seeking a payment moratorium are discouraged. The Court will consider motions to suspend wage orders on an emergency basis. 4. The Court's standard forms of agreed orders conditioning the automatic stay contain default provisions that mandate that a debtor must "[m]ake all payments due to the chapter 13 trustee after the date of this Order." Similar provisions are in non-standard orders. The Court modifies all such provisions. If the failure to make a payment to the chapter 13 trustee is due to Hurricane Harvey's substantial and adverse effect on a debtor, missed payments for the period from August 28, 2017 through October 31, 2017 will be a default only if the Court so determines after notice and hearing. 5. Debtors who are able to maintain their payments must do so.

SIGNED: September 1, 2017. DAVID R.JONES CHIEF UNITED STATES NKRUPTCY JUDGE 

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