Motion to Incur Debt
MOTION TO INCUR DEBT
Before you use this: Identify the bankruptcy district's current borrowing rule, order or trustee procedure. Confirm whether this transaction requires court authorization, trustee approval, both, or a different filing. Section 1305 addresses certain postpetition claims; it does not by itself authorize a Chapter 13 debtor to borrow.
| Party | Role |
|---|---|
| In re [DEBTOR NAME(S)], | Debtor(s) |
United States Bankruptcy Court: [DISTRICT]
Case number: [NUMBER] Chapter: 13
Debtor(s) [NAME(S)] move for limited authorization to enter the borrowing transaction described below under [EXACT CURRENT LOCAL RULE, STANDING ORDER, PLAN PROVISION OR CASE ORDER].
Case and request
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The petition was filed [DATE]. The operative plan is [DOCKET AND CONFIRMATION OR MODIFICATION DATE]. The plan payment is $[AMOUNT] [FREQUENCY] and the remaining plan obligation is [TERMS]. Payment status through [DATE] is [CURRENT / ARREARS, AMOUNT AND EXPLANATION] according to [TRUSTEE LEDGER OR RECORD].
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Debtor(s) request permission to [BORROW / LEASE / REFINANCE] for [SPECIFIC PURPOSE]. The need arose [DATE AND FACTS]. Available alternatives considered were [REPAIR, CASH, OTHER CREDIT OR NONE, WITH COSTS]. The proposed transaction is supported by [CONTRACT OR WRITTEN QUOTE, EXHIBIT].
| Transaction term | Actual proposal |
|---|---|
| Lender or lessor and address | [NAME / ADDRESS] |
| Borrower and any separately consenting obligor | [EXACT NAMES] |
| Principal or financed amount | $[AMOUNT] |
| Cash price, down payment and trade-in credit | $[AMOUNTS OR NONE] |
| Interest rate and variable-rate formula, if any | [RATE / INDEX / MARGIN / CAPS] |
| Fees and total expected cost | [ITEMIZED AMOUNTS] |
| Number, frequency and amount of payments | [TERMS] |
| Maturity and any balloon | [DATE / AMOUNT OR NONE] |
| Collateral and lien priority, if any | [IDENTIFIER / EXISTING LIENS / PROPOSED SECURITY] |
| Prepayment and default terms | [SUMMARY / CONTRACT SECTION] |
| Offer expiry and conditions | [DATE / CONDITIONS] |
- The financed property or service is [EXACT DESCRIPTION]. Its price and value are supported by [QUOTE OR VALUATION, EXHIBIT]. Any estate property disposition, lien, guaranty, plan treatment, or separate approval required by [ACTUAL AUTHORITY] is [IDENTIFIED REQUEST OR SEPARATE FILING]; this motion does not grant rights beyond the order's express terms.
Budget and plan effect
| Monthly item | Before transaction | After transaction | Evidence |
|---|---|---|---|
| Net household income | $[AMOUNT] | $[AMOUNT] | [RECORD] |
| Necessary living expenses, including insurance | $[AMOUNT] | $[AMOUNT] | [RECORD] |
| Existing plan payment | $[AMOUNT] | $[AMOUNT] | [LEDGER / PLAN] |
| Existing debt payment replaced, if any | $[AMOUNT] | $[AMOUNT] | [RECORD] |
| Proposed new payment | $0 | $[AMOUNT] | [OFFER] |
| Remaining monthly cash | $[AMOUNT] | $[AMOUNT] | [CALCULATION] |
-
The proposed payment can be made while complying with the operative plan because [SPECIFIC NUMBERS, TIMING AND FACTS]. A plan modification [IS NOT REQUESTED / IS FILED SEPARATELY AT DOCKET NUMBER]; any inconsistency with the plan is [EXPLAINED AND RESOLVED OR NONE].
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The Chapter 13 trustee's position is [APPROVAL ATTACHED / NO OBJECTION / OBJECTION / NOT YET KNOWN] as of [DATE]. If trustee approval is required or practicable for a qualifying § 1305(a)(2) consumer claim, the record of the request and response is [EXHIBIT / DATES]. The lender's knowledge of any required approval is [FACTS OR UNKNOWN]. No outcome for claim allowance or discharge is requested here.
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Notice and hearing are requested under [SELECTED LOCAL RULE / ORDER]. Debtor(s) request an order authorizing only the transaction terms stated above, subject to [SPECIFIC CONDITIONS], with any material change requiring further approval under the same procedure.
Dated: [__/__/____]
Debtor or counsel signature: [SIGNATURE]
Printed name and capacity: [NAME / CAPACITY]
Address, telephone, email and bar number if counsel: [CONTACT]
Exhibits and service
| Exhibit | Record |
|---|---|
| [NUMBER] | Written financing offer and purchase or lease terms |
| [NUMBER] | Current income and expense records |
| [NUMBER] | Operative plan and trustee payment record |
| [NUMBER] | Need, value, alternatives and trustee communication |
I certify that on [DATE] I served this motion, proposed order, notice and exhibits on [RECIPIENTS AND ADDRESSES] by [METHOD] under [CURRENT FEDERAL AND LOCAL RULE OR ORDER]. The hearing or objection date is [DATE].
Service declarant signature: [SIGNATURE] Date: [__/__/____]
Proposed order for court completion
| Party | Role |
|---|---|
| In re [DEBTOR NAME(S)], | Debtor(s) |
Case number: [NUMBER] Chapter: 13
ORDER ON MOTION TO INCUR DEBT
After review of [RECORD AND HEARING], and findings under [SELECTED LOCAL RULE OR ORDER], the motion is [GRANTED / DENIED / CONTINUED]. If granted, debtor(s) may enter the specific transaction with [LENDER] on the terms in [EXHIBIT / FINAL SCHEDULE], subject to [CONDITIONS]. This order does not determine claim allowance, dischargeability, lien priority, or any separate plan modification.
Dated: [__/__/____] United States Bankruptcy Judge: [SIGNATURE]
About this template
- Last updated
- September 26, 2026
- Jurisdiction
- All states
- Category
- Financial & Banking
Financial and banking documents govern loans, security interests, account agreements, and commercial transactions between lenders, borrowers, and financial institutions. Promissory notes, guaranties, security agreements, and UCC filings have precise legal requirements, and mistakes can leave a lender unsecured or a borrower on the hook for more than they agreed to. Well-drafted finance paperwork protects both sides and keeps the deal enforceable if something goes wrong later.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
The statutes this template relies on are listed under Legal authority.
11 U.S.C. § 1305(a)(2), (c) (checked September 26, 2026): "A claim filed under subsection (a)(2) of this section shall be disallowed if the holder of such claim knew or should have known that prior approval by the trustee of the debtor's incurring the obligation was practicable and was not obtained."
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