Local Rule 3.14 - Trusteeship Regulations

  1. Trusteeships for the equitable distribution of non-exempt personal earnings of debtors among their creditors will be established and governed by the provisions of the Revised Code Section 2329.70 and these rules.

  2. An applicant must reside in the territory of this Court, and at the time of making application for appointment of trustee he shall exhibit to the Clerk a 15 day legal demand for payment of debt and notice of garnishment proceedings, received by him from a creditor listed in his statement.

    Trusteeship Application Form

  3. The application shall contain:

    1. An accurate statement of debtor's name, address, phone number, marital status, and names of his dependents;
    2. Name and address of debtor's employer or employers; and
    3. Amount or amounts of his gross and net earnings for the previous two pay periods;

    It shall be accompanied by the sworn statement, disclosing names and addresses of all creditors holding liquidated claims, both secured, and unsecured, with amount due each.

  4. Upon the filing of such application and payment of a filing fee of $35.00, the Clerk will be designated to act as trustee, without additional compensation, and without bond other than his official bond, to receive and distribute to those creditors of the debtor at the time of filing, his non-exempt personal earnings and such other funds as he may voluntarily pay over or assign to said trustee.

  5. The filing of such application shall stay all proceedings against applicant's personal earnings unless the proceeds under attachment or proceedings in aid of execution are already in the possession of the Court.

  6. At time of application, Debtor shall present to the Clerk a copy of most recent pay stub. Applicant shall sign a wage withholding order directing applicant's employer to pay to the Court the non-exempt portion of applicant's wages (currently 25% of disposable income). It is the applicant's responsibility to make required payments until employer makes payments on applicant's behalf. Failure to make such payment or payments will be cause for termination of trusteeship.

  7. Work stoppages without pay, for any reason, and change of employment, MUST be reported to the trustee on or before payment days. Failure to do so will be grounds for termination of trusteeship.

  8. If the debtor fails to make a scheduled payment for a period in excess of 30 days, the Court shall terminate the trusteeship, unless, based on motion from applicant, the Court directs otherwise.

  9. When a trusteeship is dismissed for non-payment, it shall not be reinstated and the debtor shall not be permitted to file a new trusteeship, for six (6) months from date of dismissal, unless upon motion supported by affidavit the debtor proves to the satisfaction of the Court, that failure to maintain the trusteeship agreement was not due to willful neglect. Revised Code Section 2329.70. Before reinstatement will be made, all amounts required by law must be paid.

  10. List of creditors filed by debtor shall show:

    1. Name of creditor with the account number.
    2. Creditor's business address
    3. Total amount due to creditor.

  11. The Clerk shall cause Notice of Trusteeship to be forwarded to each creditor with request to verify account. No distribution or apportionment shall be made to any creditor until verification of account is filed with Clerk.

  12. If a claim listed by debtor varies substantially in amount from that verified by creditor, the Clerk shall notify debtor of the discrepancy and require him to appear and amend his schedule, or to request a hearing for determination of true amount due. Notice of hearing shall be given to each party and hearing had and judgement rendered as in other civil cases.

  13. No trusteeship will be opened by the Court unless the applicant has disclosed more than one (1) creditor.

  14. Voluntary payments in excess of the legal obligation may be made.

  15. Debtor may list additional creditors omitted from his original statement through inadvertence, by application to the Court, with notice to such creditors, to list them in the trusteeship. If such application is made by a creditor, notice must be given to the debtor.

  16. Any person who becomes a creditor AFTER the appointment of a trustee, may be listed in such trusteeship and share in any distribution made by the trustee AFTER the next ensuing distribution. Revised Code Section 2329.70.

  17. False statements to the trustee by any creditor will be cause for disallowance of claim; false statements to the trustee by the debtor will be cause for dismissal.

  18. The trustee shall make no distribution to anyone except a creditor or any Attorney for a creditor.

  19. The trustee shall make periodic distribution to creditors as te trustee deems reasonable. The trustee shall distribute two (2%) percent of gross receipts to the City as a fee for collecting and dispensing funds.

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