MOTION TO INCUR DEBT

Chapter 13 Post-Petition Credit Approval

UNITED STATES BANKRUPTCY COURT

[DISTRICT NAME]

In re:

[DEBTOR NAME(S)],

Debtor(s).

Case No.: _________________
Chapter: 13

DEBTOR'S MOTION FOR AUTHORIZATION TO INCUR DEBT

[DEBTOR NAME(S)] ("Debtor(s)"), by and through undersigned counsel, respectfully move(s) this Court for authorization to incur new debt during the pendency of this Chapter 13 case, and in support thereof state(s) as follows:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. Sections 157 and 1334.

2. This is a core proceeding under 28 U.S.C. Section 157(b)(2).

3. Venue is proper in this District pursuant to 28 U.S.C. Section 1409.

II. BACKGROUND

4. On [FILING DATE], the Debtor(s) filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code.

5. On [CONFIRMATION DATE], this Court entered an Order confirming the Debtor(s)' Chapter 13 Plan.

6. The Debtor(s) are making all plan payments as required. Current plan payment: $[AMOUNT] per month.

7. The Debtor(s) are current on all:
   ☐ Plan payments
   ☐ Post-petition mortgage payments
   ☐ Post-petition domestic support obligations
   ☐ Tax filings

III. REASON FOR INCURRING DEBT

8. The Debtor(s) seek authorization to incur debt for the following reason:

A. Type of Debt Requested

☐ Vehicle Purchase/Financing
- Current vehicle situation: _________________________________
- Reason vehicle needed: _________________________________

☐ Vehicle Lease

☐ Real Property Purchase
- Reason for purchase: _________________________________

☐ Real Property Refinance
- Reason for refinance: _________________________________

☐ Home Repair/Improvement Financing
- Nature of repair: _________________________________
- Why necessary: _________________________________

☐ Medical Expenses Financing
- Nature of medical need: _________________________________

☐ Educational Loan
- Purpose: _________________________________

☐ Other:
- Type: _________________________________
- Purpose: _________________________________

B. Necessity of Debt

9. The proposed debt is necessary because:

☐ Debtor(s)' current vehicle is not operational / is unsafe
- Year/Make/Model: _________________________________
- Mileage: _________________________________
- Condition issues: _________________________________
- Estimated repair cost: $_____________
- Vehicle value: $_____________

☐ Debtor(s) need reliable transportation for:
☐ Employment
☐ Medical appointments
☐ Child transportation (school, childcare)
☐ Other essential purposes: _________________________________

☐ Current housing situation requires change because:
_________________________________

☐ Other necessity:
_________________________________

IV. PROPOSED DEBT TERMS

A. Creditor Information

B. Debt Terms

C. Collateral (if secured)

V. DEBTOR'S ABILITY TO PAY

A. Current Monthly Budget

B. Feasibility Analysis

10. The Debtor(s) can afford the new debt payment because:

☐ There is sufficient surplus in the current budget
- Current monthly surplus: $_____________
- New payment amount: $_____________
- Remaining surplus: $_____________

☐ Existing expense will be eliminated/reduced
- Current expense being replaced: $_____________
- New expense: $_____________
- Net change: $_____________ (savings/increase)

☐ Income has increased since confirmation
- Income at confirmation: $_____________
- Current income: $_____________
- Increase: $_____________

11. The Debtor(s) confirm they will be able to continue making all plan payments.

VI. IMPACT ON CHAPTER 13 PLAN

A. Plan Payment Impact

12. ☐ No change to plan payment is required
    ☐ Plan modification will be filed to account for:
    _________________________________

B. Plan Completion

13. This debt will not interfere with the Debtor(s)' ability to complete the Chapter 13 Plan because:

_____________________________________________________________________________

VII. TRUSTEE'S POSITION

14. The Chapter 13 Trustee:

☐ Has been contacted and consents to this Motion
☐ Has been contacted and objects (see response)
☐ Will be contacted; position unknown at filing
☐ Other: _________________________________

15. Documentation of Trustee communication:

☐ Letter/email from Trustee attached as Exhibit ___
☐ Trustee stipulation attached as Exhibit ___

VIII. COMPLIANCE WITH LOCAL RULES

16. This Motion complies with the following local requirements:

☐ [LOCAL RULE CITE] - Threshold amount requiring court approval: $_____________
☐ [LOCAL RULE CITE] - Trustee pre-approval obtained
☐ [LOCAL RULE CITE] - Required documentation attached
☐ [LOCAL RULE CITE] - Other: _________________________________

IX. LEGAL STANDARD

A. Authority

17. Section 1305 of the Bankruptcy Code permits the filing of post-petition claims for consumer debts that are:
    - For property or services necessary for the debtor's performance under the plan, AND
    - Where Trustee approval was obtained if practicable

B. Court Discretion

18. Courts generally consider the following factors in ruling on motions to incur debt:

☐ Whether the debt is necessary
☐ Whether the debtor can afford the new payment
☐ Whether the debt will jeopardize plan completion
☐ Whether the terms are reasonable
☐ The trustee's position

X. RELIEF REQUESTED

WHEREFORE, the Debtor(s) respectfully request that this Court:

1. Authorize the Debtor(s) to incur debt in the amount of $[PRINCIPAL] from [LENDER] with monthly payments of $[PAYMENT] for [TERM] months at [RATE]% interest;

2. Authorize the Debtor(s) to sign all necessary loan documents;

3. Grant such other and further relief as the Court deems just and proper.

Dated: ____/____/________

Respectfully submitted,

_________________________________
[ATTORNEY NAME]
[STATE BAR NUMBER]
[FIRM NAME]
[ADDRESS]
[TELEPHONE]
[EMAIL]
Attorney for Debtor(s)

EXHIBITS

☐ Exhibit A: Pre-approval letter or loan terms from lender
☐ Exhibit B: Purchase agreement / Bill of sale
☐ Exhibit C: Documentation of necessity (repair estimates, etc.)
☐ Exhibit D: Updated Schedule I (Income)
☐ Exhibit E: Updated Schedule J (Expenses)
☐ Exhibit F: Recent pay stubs (60 days)
☐ Exhibit G: Trustee consent/stipulation (if obtained)
☐ Exhibit H: Vehicle valuation (KBB/NADA) for used vehicles

PROPOSED ORDER

[COURT HEADER]

ORDER AUTHORIZING DEBTOR TO INCUR DEBT

Upon consideration of the Debtor(s)' Motion for Authorization to Incur Debt, and the Court finding that:

1. The proposed debt is necessary for the Debtor(s);
2. The Debtor(s) have demonstrated the ability to make the new debt payments while continuing plan payments;
3. The proposed debt will not jeopardize the Debtor(s)' ability to complete the Chapter 13 Plan;
4. The terms are reasonable;
5. [The Chapter 13 Trustee has consented / does not object];

IT IS HEREBY ORDERED:

1. The Motion is GRANTED.

2. The Debtor(s) are authorized to incur debt from [LENDER] in the principal amount of $[AMOUNT] at an interest rate of [RATE]% with monthly payments of $[PAYMENT] for a term of [TERM] months.

3. The Debtor(s) are authorized to execute all documents necessary to consummate this transaction.

4. The Debtor(s) shall continue to make all Chapter 13 Plan payments as required.

5. [Any additional conditions]

Dated: ____/____/________

_________________________________
United States Bankruptcy Judge

CERTIFICATE OF SERVICE

I certify that on [DATE], I served the foregoing Motion on:

☐ Chapter 13 Trustee
☐ Office of the U.S. Trustee
☐ All creditors via CM/ECF and/or U.S. Mail per matrix

_________________________________
[ATTORNEY NAME]

Template Version 1.0 - Updated January 2026
References: 11 U.S.C. Sections 363, 1305; Fed. R. Bankr. P. 4001(c); Local Rules